What happened
The Federal Trade Commission said Aurobindo Pharma Limited must divest four generic drug products to Quagen Pharmaceuticals LLC to complete its $250 million acquisition of Lannett Company Inc., resolving agency concerns that the deal could raise prices for patients who rely on the medicines.
The agency said the acquisition would combine two of a limited number of competitors in markets for four generic pharmaceutical products. The products to be divested are mycophenolate mofetil oral suspension, niacin extended release tablets, pilocarpine tablets and rabeprazole sodium delayed release tablets.
The FTC alleged the acquisition would eliminate competition between Aurobindo and Lannett and reduce the number of independent significant competitors for each of the four generic drugs. Without divestitures, the agency said, the deal would increase the likelihood that Aurobindo could exercise unilateral market power, while remaining competitors could engage in coordinated interaction that could raise generic drug costs.
The proposed order also requires Aurobindo and Lannett to provide transition services so Quagen can operate the divested assets immediately, according to the FTC. The companies will also be subject to a monitor overseeing compliance obligations.
The Commission voted 2-0 to issue the administrative complaint and accept the consent agreement for public comment. The public will have 30 days to submit comments on the proposed consent agreement package, and the order would carry the force of law only if issued on a final basis.