Legal Library: Cases and Proceedings

Ball Corporation has agreed to sell to Ardagh Group S.A. eight U.S. aluminum can plants and associated assets in order to settle charges that its proposed $8.4 billion acquisition of Rexam PLC is likely anticompetitive. According to the complaint, the acquisition would eliminate direct competition in the United States between Ball and Rexam, which are the first and second largest manufacturers of aluminum beverage cans in both the United States and the world. The complaint alleges without a divestiture, it is likely that the proposed merger would substantially lessen competition for standard 12-ounce aluminum cans in three regional U.S. markets – the South and Southeast, the Midwest, and the West. The complaint also alleges that the proposed merger would substantially lessen competition for specialty aluminum cans nationwide. Ball and Rexam produce specialty aluminum cans that range in size from 7.5 ounces to 24 ounces, come in different shapes, and are used to market a wide variety of different products such as portioncontrolled drinks and energy drinks. Under the terms of the consent agreement, Ball and Rexam are required to divest eight aluminum can plants and related assets in the United States to Ardagh, one of the world’s largest producers of glass bottles for the beverage industry and metal cans for the food industry. Ardagh will acquire aluminum can body plants in Fairfield, Calif., Chicago, Ill., Whitehouse, Ohio, Fremont, Ohio, Winston-Salem, N.C., Bishopville, S.C., and Olive Branch, Miss., and Rexam’s aluminum can end plant located in Valparaiso, Ind.. Ardagh also will acquire Rexam’s U.S. headquarters in Chicago, Ill., and Rexam’s U.S. Technical Center in Elk Grove, Ill.

Invibio agreed to settle charges that it used long-term supply contracts to exclude rivals and maintain its monopoly in implant-grade polyetheretherketone, known as PEEK, which is sold to medical device makers. The FTC’s complaint alleges that two other companies,Solvay Specialty Polymers LLC and Evonik Corporation, later entered the implant-grade PEEK market, but Invibio’s anticompetitive tactics impeded them from effectively competing for customers. Through these exclusive contracting practices, the complaint alleges that Invibio has been able to maintain high prices for PEEK, despite entry from Solvay and Evonik; to prevent its customers from using more than one source of supply, despite their business preference to do so; and to impede Solvay and Evonik from developing into fully effective competitors. Under the consent order, Invibio, Inc. and Invibio Limited, along with their corporate parent, Victrex plc, are generally prohibited from entering into exclusive supply contracts and from preventing current customers from using an alternate source of PEEK in new products. In addition, the companies must allow current customers meeting certain conditions to modify existing contracts to eliminate the requirement that the customer purchase PEEK for existing products exclusively from Invibio.

Drug manufacturer Hikma Pharmaceuticals PLC agreed to sell the rights and assets for two generic drugs, and relinquish its U.S. marketing rights to a third generic drug, in order to settle FTC charges that its proposed $2 billion acquisition of Roxane would likely be anticompetitive. The merger would have combined two of five firms marketing prednisone tablets and two of four firms marketing lithium carbonate capsules. In the market for flecainide tablets, Roxane is currently one of only two firms with significant market share. Absent the merger, Hikma was expected to market flecainide tablets in the U.S. following FDA approval, which its partner, Unimark, is currently seeking. The order preserves competition by requiring the companies to divest to Pennsylvania-based Renaissance Pharma, Inc., three strengths of anti-inflammatory and immunosuppressant prednisone tablets and all strengths of lithium carbonate capsules, used to treat bipolar disorder. The order also requires Hikma to relinquish to its drug development partner, India-based Unimark Remedies Ltd., its equity interest as well as the rights to market flecainide acetate tablets in the United States, a drug used to prevent and treat abnormally fast heart rhythms.

Generic drug manufacturers Lupin Ltd. and Gavis Pharmaceuticals LLC agreed to sell the rights and assets for two generic drugs, in order to settle FTC charges that Lupin’s proposed $850 million acquisition of Gavis would likely be anticompetitive.The merger would have combined two of only four companies that currently market generic doxycycline monohydrate capsules in two dosage strengths, used to treat bacterial infections, likely resulting in higher prices. The merger also would have eliminated one of only a few companies likely to enter the market for  generic mesalamine extended release capsules, used to treat ulcerative colitis, in the near future, thereby delaying beneficial competition and the prospect of price decreases. Under the terms of the order, Lupin is required to transfer to G&W Laboratories all of Gavis’s rights and assets related to generic doxycycline monohydrate capsules no later than ten days after the acquisition is consummated. The order also requires that Gavis divest its rights and assets related to generic mesalamine capsules to G&W before the acquisition takes place.

The Commission challenged Pfizer Inc.’s proposed $68 billion acquisition of Wyeth and required significant divestitures to preserve competition in multiple U.S. markets for animal pharmaceuticals and vaccines. The proposed consent order remedies the anticompetitive effects the Commission believes are likely to result from the transaction in numerous markets for animal vaccines and animal pharmaceutical products. After a thorough investigation, the Commission concluded that the transaction does not raise anticompetitive concerns in any human health product markets.

Generic drug marketer Hikma Pharmaceuticals PLC agreed to divest its rights and interests in five generic injectable pharmaceuticals to settle charges that its $5 million acquisition of the rights to various drug products and related assets from Ben Venue Laboratories, Inc. would likely be anticompetitive. According to the complaint, without a remedy, Hikma’s purchase of certain generic injectables would likely harm future competition in the U.S. markets for (1) Acyclovir sodium injection: an antiviral drug used to treat chicken pox, herpes, and other related infections, (2) Diltiazem hydrochloride injection: a calcium channel  blocker and antihypertensive used to treat hypertension, angina, and arrhythmias, (3) Famotidine injection: a treatment for ulcers and gastroesophageal reflux disease, (4) Prochlorperazine edisylate injection: an antipsychotic drug used to treat schizophrenia and nausea, and (5) Valproate sodium injection: a treatment for epilepsy, seizures, bipolar disorder, anxiety, and migraine headaches. Hikma is required to divest the five generic injectable drug assets to Amphastar Pharmaceuticals, Inc., a California-based specialty pharmaceutical company that sells generic injectable and inhalation products.

To settle charges that its acquisition of DSI Renal would substantially lessen competition for outpatient dialysis services in Laredo, Texas, U.S. Renal agreed to divest three clinics to Satellite Healthcare, Inc.