FTC ORDERS DIVESTITURE IN TEVA’s ACQUISITION OF BARR

On December 19, 2008, Teva Pharmaceuticals Industries Ltd.’s settled charges that its proposed $8.9 billion acquisition of rival generic drug maker Barr Pharmaceuticals Inc. would be anticompetitive. The consent order required Teva and Barr to sell assets in 29 relevant markets, including generic drugs commonly used to treat acid reflux disease, various types of cancer, bacterial infections, diabetes, and depression.
According to the complaint, Teva’s acquisition of Barr as proposed would lessen competition in each of the following U.S. generic drug markets: 1) tetracycline hydrochloride (HCl) capsules; 2) chlorzoxazone tablets; 3) desmopressin acetate tablets; 4) metoclopramide HCl tablets; 5) carboplatin injection; 6) tamoxifen citrate tablets; 7) metronidazole tablets; 8) trazodone HCl tablets; 9) glipizide/metformin HCl tablets; 10) cyclosporine liquid; 11) cyclosporine capsules; 12) flutamide capsules; 13) mirtazapine orally disintegrating tablets (ODT) ; 14) deferoxamine injection; 15) epoprostenol sodium (freeze-dried powder) injection (epop); 16) weekly fluoxetine capsules; and 17) 13 generic oral contraceptive markets.

Under the terms of the proposed consent agreement, the companies would be required to assign and divest to Watson, Teva’s rights and assets for generic: 1) chlorzoxazone tablets; 2) deferoxamine injection; 3) fluoxetine weekly capsules; 4) carboplatin injection; and 5) metronidazole tablets. The consent agreement also requires the companies to assign and divest to Watson all of Barr’s rights and assets for generic: 1) metoclopramide HCl tablets; 2) cyclosporine liquid; 3) cyclosporine capsules; 4) desmopressin acetate tablets; 5) epop; 6) flutamide capsules; 7) glipizide/metformin HCl tablets; 8) mirtazapine ODT; 9) tamoxifen citrate tablets; and 10) tetracycline HCl capsules. In addition, the companies must divest rights and assets related to trazodone HCl tablets and the 13 oral contraceptive products to Qualitest.

If the parties do not sell the assets within six months, the FTC may appoint a trustee to oversee the assets’ sale. The order also contains several provisions to ensure the assets are successfully divested, including requiring Teva and Barr to provide transitional services to enable the buyers to obtain necessary FDA approvals. The FTC also has appointed William Rahe of Quantic Regulatory Services, LLC to oversee the asset transfer and to ensure Teva and Barr comply with the terms of the order. The Commission vote to accept the complaint and consent order was 4-0.

Robert Doyle
(202) 589-1834
rdoyle@dbmlawgroup.com