Merger Control News
Mylan/Abbott Laboratories deal notified to the Commission (M.7379 Mylan/Abbott Laboratories)
Mylan has notified to the Commission a $5.3 billion transaction under which Mylan will acquire Abbott Laboratories' portfolio of non-US branded generic drugs. The transaction will strengthen Mylan's presence in Europe with the drugs to be acquired falling into five therapeutic areas: cardio and metabolic, gastrointestinal, anti-infective and respiratory, central nervous system and pain, and women's and men's health. The Commission is set to issue a decision by 14 January 2015.
Acquisition of Biomet Inc by Zimmer Holdings (M.7265 Zimmer/Biomet)
In October we reported that Zimmer Holdings' proposed acquisition of Biomet would face an in depth Phase II investigation by the Commission (see here). The Commission recently extended its review of the transaction by five working days, moving the deadline for a decision back to 18 March 2015. However, on 2 December 2014, the Commission stopped the clock on its administrative timetable under Article 11(3) of the Merger Regulation. This indicates that the Commission has issued an information request to Zimmer under a decision. The timetable will only start to run again when the requested information has been submitted.
Novartis/GSK deals notified to the Commission (M.7275 Novartis/GSK oncology business, M.7276 GSK/Novartis vaccines business/Novartis consumer health business)
Swiss pharmaceutical company Novartis and UK-based GlaxoSmithKline ("GSK") have submitted two separate notifications to the Commission for approval of their three-part inter-conditional deal under the EU merger control regime. Under the transaction Novartis has agreed to acquire GlaxoSmithKline's oncology products, while GlaxoSmithKline will acquire Novartis' global vaccines business. In addition, the parties will create a new consumer healthcare business in which GSK will have majority control with an equity interest of 63.5%. The Commission decision in both cases is expected by 14 January 2015.
Commitments offered in IMS Health's acquisition of Cegedim businesses (M.7337 IMS Health/Cedegim Business)
On 4 November, IMS Health, Inc. submitted a merger notification to the Commission in respect of its proposed acquisition of sole control of the major part of Cegedim S.A.'s customer relationship management and strategic data businesses (the "Cegedim Business"). According to IMS Health's notification, IMS Health and the Cegedim Business are information and technology services companies that provide companies active in the pharmaceutical, biotech, life sciences and healthcare sectors with solutions to measure and improve their performance. IMS Health submitted proposed remedies to the Commission on 2 December which means that the deadline for a decision has moved back to 9 January 2015.
Conditional approval for Medtronic's acquisition of Covidien (M.7326 Medtronic/Covidien)
On 28 November 2014, the Commission announced its decision to grant conditional approval to the acquisition of Covidien plc by US medical technology company Medtronic Inc. The competition concerns identified by the Commission were in the market for drug coated balloons, which are used in the treatment of diseases caused by cholesterol-containing fat or blood clots accumulated in the vessels. Covidien's new drug coated balloon product, Stellarex, is expected to be launched as a rival to Medtronic's product in late 2014 or early 2015. The Commission considered that the removal of the potentially competitive Stellarex was likely to remove innovation in this market. Consequently, in order to avoid an in-depth phase II review, Medtronic agreed to sell Covidien's worldwide Stellarex business.
CMA decision on acquisition by ProStrakan Group of Archimedes Pharma
On 14 November 2014, the CMA announced its decision not to refer the completed acquisition by ProStrakan Group PLC of Archimedes Pharma Limited for a Phase II investigation. The CMA decided that Archimedes' weak position in the UK market for the supply of fast-acting fentanyl products did not materially constrain ProStrakan pre-merger. There are other credible suppliers of fast-acting fentanyl products, who will continue to constrain the merged entity. The CMA concluded therefore that there is no realistic prospect that the merger will result in a substantial lessening of competition.
- Actavis has agreed to acquire Allergan, a transaction which will require EU and US merger control approval. The transaction is valued at $66 billion and will create one of the top 10 global pharmaceutical companies by sales revenues. Actavis reports that Allergan's specialised products in ophthalmology, neurosciences and medical aesthetics/dermatology/plastic surgery will complement Actavis' portfolio of CNS, gastroenterology and women's health pharmaceuticals.
EU General Court publishes summary of actions against Commission's Perindopril decision
In October we reported that Les Laboratoires Servier and five generic drug manufacturers have appealed against the July 2014 Commission decision which found them to have breached EU competition law by entering into a series of agreements to delay market entry of cheaper versions of the cardiovascular drug Perindopril (see here).
The Court has now published in the official journal summaries of the actions brought by Niche/Unichem, Mylan, Krka and Teva. Each of the parties is appealing on both the substantive issues and on the level of fine imposed. Teva's appeal alleges,inter alia, that the Commission erred legally and factually in characterising the agreement entered into by Teva and Servier as a restriction by object. Teva contends that the circumstances that prevailed when the Agreement was negotiated, in particular the genuine intellectual property risks that Teva faced, demonstrate that Teva entered into the Agreement to secure a timely market entry and not to receive an inducement in exchange for a delayed entry.
UK CMA issues supplementary Statements of Objections in paroxetine investigation
On 21 October the CMA issues a supplementary statement of objections ("SSO") to all parties to its investigation into agreements relating to the supply of antidepressant drug paroxetine (see here). The SSO relates to a limited number of aspects of the CMA's case. The parties will have the opportunity to make written and oral representations before any decision is taken.
The initial Statement of Objections was sent by the OFT (the CMA's predecessor) in April 2013 to GlaxoSmithKline and a number of generic manufacturers (Alpharma Limited, Generics (UK) Limited and IVAX LLC). The allegations relate to "pay for delay" agreements concerning the supply of the drug paroxetine in the UK. In the relevant period, the branded paroxetine drug Seroxat was one of GSK's best selling medicines. A final decision is expected in early 2015.
Investigations around the EU
National competition authorities around the EU are focussing more and more on anti-competitive practices in the life sciences sector. Recent examples include:
- Italy's competition authority has opened an investigation into South African company Aspen, looking at whether it has abused a dominant market position in respect of the pricing of its cancer drugs, Alkeran, Leukeran, Purinethol and Tioguanina;
- A Belgian consumer group has filed a complaint with the Belgian competition authority alleging that Roche and Novartis have blocked the use of Avastin for treating eye diease in order to support the more expensive product, Lucentis. The two pharmaceutical companies have already been fined in Italy for similar practices and recently the fines were upheld by an Italian court.
- The Danish competition authority has ordered Denmark's largest pharmaceutical companies Nomeco and Tjellsen Max Jenne to cease the coordination of prices for pharmacies and suppliers.
- The Dutch competition regulator hasclosed an investigation into AstraZeneca's pricing practices in relation to its heartburn drug Nexium. The regulator was unable to establish that AstraZeneca held a position of dominance in the relevant market.
Increased transparency for private patients in the UK
In October we reported that the CMA had made the Private Healthcare Investigation Order 2014 which aims to address adverse effects on competition identified in the CMA's final report on the private healthcare market investigation (see here). Among the measures introduced by the Order was a requirement for increased transparency on performance and fees. This has now moved a step closer with the appointment of the Private Healthcare Information Network to make private healthcare information available via an independent public website. The Order requires that the information service be made available by April 2015 (although note that there is an on-going appeal in relation to the publication of consultants' fees).