Barr Pharmaceuticals, Inc.
Volume 142 · 142 F.T.C. 1204
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Barr Pharmaceuticals, Inc., 142 F.T.C. 1204 (2006). Consumer Law Library, https://consumerlawlibrary.org/decisions/v142-0010
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IN THE MATTER OF BARR PHARMACEUTICALS, INC.
CONSENT ORDER, ETC., IN REGARD TO ALLEGED VIOLATIONS OF SEC. 7 OF THE CLAYTON ACT AND SEC. 5 OF THE FEDERAL TRADE COMMISSION ACT Docket C-4171, File No. 061 0217 Complaint, October 19, 2006 – Decision, November 22, 2006 This consent order addresses the acquisition of Pliva d.d. by Barr Pharmaceuticals, Inc. Both companies are engaged in the research, development, manufacture, and sale of generic pharmaceutical products. Barr’s acquisition of Pliva would reduce the number of current or future competing generic suppliers of three pharmaceutical products: trazodone hydrochloride tablets, triamterene with hydrochlorathiazide tablets, and nimodipine soft-gel capsules. The order requires Barr to divest to Apotex, Inc., or another Commission-approved buyer, Barr’s generic trazodone and triamterene with hydrochlorothiazide businesses. The order also requires that Barr return marketing rights to Pliva’s generic nimodipine product in development to its joint venture partner, Banner Pharmacaps, Inc., or alternatively, that Barr return marketing rights to its nimodipine product in development to its development partner, Cardinal Health, Inc. Finally, the order requires Barr to divest Pliva’s branded organ preservation solution, Custodiol, to New Custodiol LLC, a company formed for the purpose of marketing and selling this product. The assets for each of the divestitures include all of the relevant intellectual property, customer lists, research and development information, and regulatory materials. If Barr fails to divest within the specified time frame, the Commission may appoint a trustee to divest the assets. Participants For the Commission: Stephanie C. Bovee, Elizabeth A. Jex, Christine Naglieri, David von Nirschl, and Kari A. Wallace. For the Respondent: Mark L. Kovner and Marimichael O. Skubel, Kirkland & Ellis LLP; and Mary N. Lehner and Thomas A. McGrath III, Linklaters.
BARR PHARMACEUTICALS, INC. 1205 Complaint COMPLAINT Pursuant to the Clayton Act and the Federal Trade Commission Act, and its authority thereunder, the Federal Trade Commission (“Commission”), having reason to believe that Respondent Barr Pharmaceuticals, Inc., a corporation subject to the jurisdiction of the Commission, has agreed to acquire Pliva, d.d., a corporation subject to the jurisdiction of the Commission, in violation of Section 7 of the Clayton Act, as amended, 15 U.S.C. § 18, and Section 5 of the Federal Trade Commission Act (“FTC Act”), as amended, 15 U.S.C. § 45, and it appearing to the Commission that a proceeding in respect thereof would be in the public interest, hereby issues its Complaint, stating its charges as follows:
I. DEFINITIONS 1. “Commission” means the Federal Trade Commission. 2. “FDA” means the United States Food and Drug Administration.
3. “Respondent” means Barr.
4. “Generic nimodipine” means all formulations containing nimodipine.
5. “Generic trazodone” means all formulations of generic trazodone hydrochloride, excluding the 300 mg formulation. 6. “Generic triamterene/HCTZ” means all formulations of generic triamterene with hydrochlorathiazide. 7. “Organ Preservation Solutions” means any product which is used for the preservation of organs intended for transplantation. VOLUME 142 Complaint II. RESPONDENTS 8. Respondent Barr Pharmaceuticals, Inc. (“Barr”) is a corporation organized, existing and doing business under and by virtue of the laws of the State of Delaware, with its headquarters address at 400 Chestnut Ridge Road, Woodcliff Lake, New Jersey 07677. Barr is engaged in the research, development, manufacture and sale of, among other things, generic pharmaceutical products.
9. Pliva d.d. (“Pliva”) is a corporation organized, existing and doing business under and by virtue of the laws of the Republic of Croatia, having its headquarters address at Ulica grad Vukovara 49, 10000 Zagreb, Croatia. Pliva is engaged in the research, development, manufacture and sale of, among other things, generic pharmaceutical products. 10. Respondent is, and at all times relevant herein has been, engaged in commerce, as “commerce” is defined in Section 1 of the Clayton Act as amended, 15 U.S.C. § 12, and is a corporation whose business is in or affects commerce, as “commerce” is defined in Section 4 of the Federal Trade Commission Act, as amended, 15 U.S.C. § 44.
III. THE PROPOSED ACQUISITION 11. On June 27, 2006, Barr announced its intention to acquire all of the issued and outstanding shares of Pliva in a transaction valued at approximately $2.3 billion (the “Acquisition”). IV. THE RELEVANT MARKETS 12. For the purposes of this Complaint, the relevant lines of commerce in which to analyze the effects of the Acquisition are the manufacture and sale of the following pharmaceutical products:
BARR PHARMACEUTICALS, INC. 1207 Complaint a. Generic trazodone tablets;
b. Generic triamterene/HCTZ tablets;
c. Organ preservation solutions; and d. Generic nimodipine soft-gel capsules. 13. For the purposes of this Complaint, the United States is the relevant geographic area in which to analyze the effects of the Acquisition in the relevant lines of commerce. V. THE STRUCTURE OF THE MARKETS 14. Trazodone hydrochloride is an antidepressant. Currently, Barr, Pliva, Watson Pharmaceuticals, Inc. (“Watson”), Teva Pharmaceutical Industries Ltd. (“Teva”), and United Research Laboratories/Mutual Pharmaceutical Company (“URL/Mutual”) are the only active suppliers of generic trazodone in the United States. Although there are five suppliers of generic trazodone, not all suppliers are capable of supplying all formulations. For instance, Barr and Pliva are two of only three suppliers of the 150 mg formulation of generic trazodone. The Acquisition would reduce the number of suppliers of generic trazodone from five to four, and increase Barr’s market share to 58 percent. The Herfindahl-Hirschman Index (“HHI”) would increase by 1,272 points, resulting in a post-acquisition HHI of 3,857 points. 15. Triamterene with hydrochlorothiazide is a combination product used to treat high blood pressure. Currently, Barr, Pliva, Watson, Mylan and Sandoz are the only active suppliers of various formulations of generic triamterene/HCTZ tablets in the United States. The Acquisition would reduce the number of suppliers from five to four, and increase Barr’s market share to about 35 percent for all formulations. The HHI would increase by 520 points, resulting in a post-acquisition HHI of 2,961 points. VOLUME 142 Complaint 16. Organ preservation solutions are used during the harvesting of donor organs to flush and preserve the viability of the donor organs prior to transplantation. The market for organ preservation solutions in the United States is highly concentrated. Barr and Pliva have market shares of approximately 60 and 30 percent, respectively, in the $17 million U.S. market. The rest of the market is divided among several smaller, niche players. The Acquisition would significantly increase concentration in this market, and would leave Barr with a near monopoly share of the organ preservation solution market. The post-acquisition HHI would increase to approximately 8,100 points. 17. Nimodipine is used to treat symptoms resulting from a ruptured blood vessel in the brain. The branded version of this product, Nimotop, is manufactured and sold by Bayer, and the patents for the branded product have already expired. Currently, there are no generic suppliers of nimodipine on the market. Barr, in conjunction with Cardinal Health Inc., plans to introduce generic nimodipine in the fall of 2006. Pliva also plans to introduce generic nimodipine with its partner, Banner Pharmaceuticals Inc. in the same time frame. Pliva and Barr are the only two firms seeking approval to offer generic nimodipine and the only suppliers capable of entering this market in a timely manner. Accordingly, the Acquisition would eliminate potential competition in the generic nimodipine market. VI. ENTRY CONDITIONS 18. Entry into each of the relevant product markets identified in Paragraph 10 would not be timely, likely, or sufficient in its magnitude, character, and scope to deter or counteract the anticompetitive effects of the Acquisition. Developing the products and obtaining the necessary FDA approval for the manufacture and sale of these products takes at least two years due to substantial regulatory, technological, and intellectual property barriers.
BARR PHARMACEUTICALS, INC. 1209 Complaint VII. EFFECTS OF THE ACQUISITION 19. The effects of the Acquisition, if consummated, may be to substantially lessen competition and to tend to create a monopoly in the relevant markets in violation of Section 7 of the Clayton Act, as amended, 15 U.S.C. § 18, and Section 5 of the FTC Act, as amended, 15 U.S.C. § 45, in the following ways, among others: a. by eliminating actual, direct, and substantial competition between Barr and Pliva, and reducing the number of competitors, in the markets for the manufacture and sale of generic trazodone tablets, generic triamterene/HCTZ tablets, and organ preservation solutions, thereby: (i) increasing the likelihood that Barr will be able to unilaterally exercise market power in these markets; (ii) increasing the likelihood and degree of coordinated interaction between or among competitors; and (iii) increasing the likelihood that customers would be forced to pay higher prices; and b. by eliminating potential competition between Barr and Pliva in the market for the manufacture and sale of generic nimodipine capsules, thereby increasing the likelihood that Barr would forego or delay the launch of one of the parties’ generic nimodipine capsules and increasing the likelihood that Barr would delay or eliminate the substantial additional price competition that would have resulted from one party’s independent entry into the future market for generic nimodipine capsules.
VIII. VIOLATIONS CHARGED 20. The Acquisition described in Paragraph 7, if consummated, would constitute a violation of Section 7 of the Clayton Act, as amended, 15 U.S.C. § 18, and Section 5 of the FTC Act, as amended, 15 U.S.C. § 45.
VOLUME 142 Order to Maintain Assets WHEREFORE, THE PREMISES CONSIDERED, the Federal Trade Commission on this nineteenth day of October, 2006, issues its Complaint against said Respondent. By the Commission.
ORDER TO MAINTAIN ASSETS The Federal Trade Commission (“Commission”), having initiated an investigation of the proposed acquisition by Respondent Barr Pharmaceuticals, Inc. (“Barr”), hereinafter referred to as “Respondent,” of PLIVA d.d. (“PLIVA”) and Respondent having been furnished thereafter with a copy of a draft Complaint that the Bureau of Competition proposed to present to the Commission for its consideration and that, if issued by the Commission, would charge Respondent with violations of Section 7 of the Clayton Act, as amended, 15 U.S.C. § 18, and Section 5 of the Federal Trade Commission Act, as amended, 15 U.S.C. § 45; and Respondent, its attorneys, and counsel for the Commission having thereafter executed an Agreement Containing Consent Orders (“Consent Agreement”), containing an admission by Respondent of all the jurisdictional facts set forth in the aforesaid draft of Complaint, a statement that the signing of said Consent Agreement is for settlement purposes only and does not constitute an admission by Respondent that the law has been violated as alleged in such Complaint, or that the facts as alleged in such Complaint, other than jurisdictional facts, are true, and waivers and other provisions as required by the Commission’s Rules; and The Commission having thereafter considered the matter and having determined to accept the executed Consent Agreement and BARR PHARMACEUTICALS, INC. 1211 Order to Maintain Assets to place such Consent Agreement on the public record for a period of thirty (30) days for the receipt and consideration of public comments, now in further conformity with the procedure described in Commission Rule 2.34, 16 C.F.R. § 2.34, the Commission hereby issues its Complaint, makes the following jurisdictional findings and issues this Order to Maintain Assets: 1. Respondent Barr Pharmaceuticals, Inc. is a corporation organized, existing and doing business under and by virtue of the laws of the State of Delaware, with its headquarters address at 400 Chestnut Ridge Road, Woodcliff Lake, New Jersey 07677.
2. PLIVA d.d. is a corporation organized, existing and doing business under and by virtue of the laws of the Republic of Croatia, with its headquarters address at Ulica grad Vukovara 49, 10000 Zagreb, Croatia, and the address of the principal place of business of its United States subsidiaries at 72 Eagle Rock Avenue, P.O. Box 371, East Hanover, New Jersey 07936.
3. The Commission has jurisdiction of the subject matter of this proceeding and of Respondent, and the proceeding is in the public interest.
ORDER I.
IT IS ORDERED that, as used in this Order to Maintain Assets, the following definitions and the definitions used in the Consent Agreement and the proposed Decision and Order (and when made final, the Decision and Order), which are attached hereto as Appendix A and incorporated herein by reference and made a part hereof, shall apply:
VOLUME 142 Order to Maintain Assets A. “Barr” means Barr Pharmaceuticals, Inc., its directors, officers, employees, agents, representatives, predecessors, successors, and assigns; and its joint ventures, subsidiaries, divisions, groups and affiliates in each case controlled by Barr (including, but not limited to, Barr Laboratories, Inc.), and the respective directors, officers, employees, agents, representatives, predecessors, successors, and assigns of each. After the Acquisition, Barr shall include PLIVA.
B. “PLIVA” means PLIVA d.d., its directors, officers, employees, agents, representatives, predecessors, successors, and assigns; and its joint ventures, subsidiaries, divisions, groups and affiliates in each case controlled by PLIVA (including, but not limited to, its United States subsidiaries, i.e., PLIVA Inc., PLIVA USA, and Odyssey Pharmaceuticals, Inc.), and the respective directors, officers, employees, agents, representatives, predecessors, successors, and assigns of each. C. “Respondent” means Barr.
D. “Commission” means the Federal Trade Commission. E. “Divestiture Assets” means the Custodiol Product Assets, the Nimodipine (Barr) Product Assets, the Nimodipine (PLIVA) Product Assets, the Trazodone Hydrochloride Product Assets, the Triamterene and Hydrochlorothiazide Product Assets and the ViaSpan Product Assets, as defined in the attached Decision and Order.
F. “Divestiture Product Business(es)” means the Respondent’s business within the Geographic Territory specified in the Decision and Order related to each of the Divestiture Products, including the research, Development, manufacture, distribution, marketing, and sale of each Divestiture Product and the assets related to BARR PHARMACEUTICALS, INC. 1213 Order to Maintain Assets such business, including, but not limited to, the Divestiture Assets.
G. “Divestiture Product Core Employees” means the Product Research and Development Employees and the Product Manufacturing Employees related to each Divestiture Product(s), individually and collectively. H. “Interim Monitor” means any monitor appointed pursuant to Paragraph III of this Order to Maintain Assets or Paragraph V of the Decision and Order. I. “Orders” means the Decision and Order and this Order to Maintain Assets.
J. “Pre-Acquisition Marketing Plan” means any marketing or sales plan that was planned or implemented within the period immediately prior to the Acquisition and without consideration of the influence of the pending Acquisition for the Divestiture Product Businesses. II.
IT IS FURTHER ORDERED that from the date this Order to Maintain Assets becomes final:
A. Respondent shall take such actions as are necessary to maintain the full economic viability, marketability and competitiveness of the Divestiture Product Businesses, to minimize any risk of loss of competitive potential for the Divestiture Product Businesses, and to prevent the destruction, removal, wasting, deterioration, or impairment of the Divestiture Product Businesses except for ordinary wear and tear. Respondent shall not sell, transfer, encumber or otherwise impair the Divestiture Assets (other than in the manner prescribed in the Decision and Order) nor take any action that lessens the full economic VOLUME 142 Order to Maintain Assets viability, marketability or competitiveness of the Divestiture Product Businesses.
B. Respondent shall maintain the operations of the Divestiture Product Businesses in the regular and ordinary course of business and in accordance with past practice (including regular repair and maintenance of the assets of such businesses) and/or as may be necessary to preserve the marketability, viability, and competitiveness of the Divestiture Product Businesses and shall use its best efforts to preserve the existing relationships with the following: suppliers; vendors and distributors, including, but not limited to, the High Volume Accounts; customers; Agencies; employees; and others having business relations with the Divestiture Product Businesses. Respondent’s responsibilities shall include, but are not limited to, the following:
1. providing the Divestiture Product Businesses with sufficient working capital to operate at least at current rates of operation, to meet all capital calls with respect to such businesses and to carry on, at least at their scheduled pace, all capital projects, business plans and promotional activities for the Divestiture Product Businesses;
2. continuing, at least at their scheduled pace, any additional expenditures for the Divestiture Product Businesses authorized prior to the date the Consent Agreement was signed by Respondent including, but not limited to, all research, Development, manufacture, distribution, marketing and sales expenditures; 3. provide such resources as may be necessary to respond to competition against the Divestiture Products and/or to prevent any diminution in sales of the Divestiture BARR PHARMACEUTICALS, INC. 1215 Order to Maintain Assets Products during and after the Acquisition process and prior to divestiture of the related Divestiture Assets; 4. provide such resources as may be necessary to maintain the competitive strength and positioning of the Divestiture Products at the High Volume Accounts; 5. making available for use by the Divestiture Product Businesses funds sufficient to perform all routine maintenance and all other maintenance as may be necessary to, and all replacements of, the assets related to such business, including the Divestiture Assets; 6. providing the Divestiture Product Businesses with such funds as are necessary to maintain the full economic viability, marketability and competitiveness of the Divestiture Product Businesses; and 7. providing such support services to the Divestiture Product Businesses as were being provided to these businesses by Respondent or PLIVA (whichever party is relevant to such Divestiture Product(s)) as of the date the Consent Agreement was signed by Respondent.
C. Respondent shall maintain a work force at least equivalent in size, training, and expertise to what has been associated with the Divestiture Products for the relevant Divestiture Product’s most recent Pre-Acquisition Marketing Plan. D. Until the Closing Date for each respective set of Divestiture Assets, Respondent shall provide all the related Divestiture Core Employees with reasonable financial incentives to continue in their positions and to research, Develop, and manufacture the relevant Divestiture Products consistent with past practices and/or as may be necessary to preserve the marketability, VOLUME 142 Order to Maintain Assets viability and competitiveness of such Divestiture Products pending divestiture and to ensure successful execution of the Pre-Acquisition Marketing Plans related to the relevant Divestiture Products. Such incentives shall include a continuation of all employee benefits offered by Respondent or PLIVA (whichever party is relevant to such Divestiture Product(s)) until the Closing Date for the divestiture of the respective Divestiture Assets has occurred, including regularly scheduled raises, bonuses, vesting of pension benefits (as permitted by Law), and additional incentives as may be necessary to prevent any diminution of the relevant Divestiture Product’s competitiveness.
E. Respondent shall:
1. for each Paragraph II Divestiture Product (as defined in the Decision and Order), for a period of at least twelve (12) months from the relevant Closing Date or upon the hiring of ten (10) Divestiture Product Core Employees by the relevant Commission-approved Acquirer, whichever occurs earlier, provide the relevant Commission-approved Acquirer with the opportunity to enter into employment contracts with the Divestiture Product Core Employees related to such Divestiture Products and assets acquired by such Commission-approved Acquirer. Each of these periods is hereinafter referred to as the “Divestiture Product Employee Access Period(s)”; and 2. not later than the earlier of the following dates: (1) ten (10) days after notice by staff of the Commission to Respondent to provide the Product Employee Information; or (2) ten (10) days after the relevant Closing Date, provide the relevant Commissionapproved Acquirer or the relevant Proposed Acquirer with the Product Employee Information related to the BARR PHARMACEUTICALS, INC. 1217 Order to Maintain Assets relevant Divestiture Product Core Employees. Failure by Respondent to provide the Product Employee Information for any Divestiture Product Core Employee within the time provided herein shall extend the Divestiture Product Employee Access Period(s) with respect to that employee in an amount equal to the delay.
3. during the Divestiture Product Employee Access Period, not interfere with the hiring or employing by the relevant Commission-approved Acquirer of Divestiture Product Core Employees, and shall remove any impediments within the control of Respondent that may deter these employees from accepting employment with such Commission-approved Acquirer, including, but not limited to, any noncompete provisions of employment or other contracts with Respondent or PLIVA (whichever party is relevant to such Divestiture Product(s)) that would affect the ability or incentive of those individuals to be employed by such Commission-approved Acquirer. In addition, Respondent shall not make any counteroffer to a Divestiture Product Core Employee who receives a written offer of employment from the relevant Commission-approved Acquirer;
provided, however, that this Paragraph II.E.3. shall not prohibit Respondent or PLIVA from continuing to employ any Divestiture Product Core Employee (subject to the conditions of continued employment prescribed in the Decision and Order).
F. Pending divestiture of the relevant Divestiture Assets, Respondent shall:
1. not use, directly or indirectly, any such Confidential Business Information related to the research, VOLUME 142 Order to Maintain Assets Development, manufacturing, marketing, or sale of the relevant Divestiture Product(s) other than as necessary to comply with the following: (1) the requirements of the Orders; (2) Respondent’s obligations to the Commission-approved Acquirer under the terms of any Remedial Agreement related to relevant Divestiture Product(s); or (3) applicable Law; 2. not disclose or convey any such Confidential Business Information, directly or indirectly, to any person except the relevant Commission-approved Acquirer; 3. not provide, disclose or otherwise make available, directly or indirectly, any such Confidential Business Information related to the marketing or sales of the relevant Divestiture Products to the employees associated with business related to those Retained Products that are approved by the FDA for the same or similar indications as the relevant Divestiture Products; and 4. institute procedures and requirements to ensure that the above-described employees:
a. do not provide, disclose or otherwise make available, directly or indirectly, any Confidential Business Information in contravention of this Order to Maintain Assets; and b. do not solicit, access or use any Confidential Business Information that they are prohibited under this Order to Maintain Assets from receiving for any reason or purpose.
G. Not later than thirty (30) days following the Effective Date, Respondent shall provide to all of Respondent’s employees and other personnel who may have access to BARR PHARMACEUTICALS, INC. 1219 Order to Maintain Assets Confidential Business Information related to each of the respective Divestiture Products written or electronic notification of the restrictions on the use of such information by Respondent’s personnel. At the same time, if not provided earlier, Respondent shall provide a copy of such notification by e-mail with return receipt requested or similar transmission, and keep an electronic file of such receipts for one (1) year after the Closing Date. Respondent shall provide a copy of the form of such notification to the Commission-approved Acquirer, the Interim Monitor(s), and the Commission. Respondent shall also obtain from each employee covered by this Paragraph II.G. an agreement to abide by the applicable restrictions. Respondent shall maintain complete records of all such agreements at Respondent’s corporate headquarters and shall provide an officer’s certification to the Commission stating that such acknowledgment program has been implemented and is being complied with. Respondent shall monitor the implementation by its employees and other personnel of all applicable restrictions, and take corrective actions for the failure of such employees and personnel to comply with such restrictions or to furnish the written agreements and acknowledgments required by this Order to Maintain Assets. Respondent shall provide the Commissionapproved Acquirer with copies of all certifications, notifications and reminders sent to Respondent’s employees and other personnel.
H. Respondent shall adhere to and abide by the Remedial Agreements (which agreements shall not vary or contradict, or be construed to vary or contradict, the terms of the Orders, it being understood that nothing in the Orders shall be construed to reduce any obligations of Respondent under such agreement(s)), which are incorporated by reference into this Order to Maintain Assets and made a part hereof.
VOLUME 142 Order to Maintain Assets I. The purpose of this Order to Maintain Assets is to maintain the full economic viability, marketability and competitiveness of the Divestiture Product Businesses through their respective transfer to the Commissionapproved Acquirer(s), to minimize any risk of loss of competitive potential for the Divestiture Product Businesses, and to prevent the destruction, removal, wasting, deterioration, or impairment of any of the Divestiture Assets except for ordinary wear and tear. III.
IT IS FURTHER ORDERED that:
A. At any time after Respondent signs the Consent Agreement in this matter, the Commission may appoint an Interim Monitor to assure that Respondent expeditiously complies with all of its obligations and performs all of its responsibilities as required by the Orders and the Remedial Agreements. The Commission may appoint one or more Interim Monitors to assure Respondent’s compliance with the requirements of the Orders, and the related Remedial Agreements.
B. The Commission shall select the Interim Monitor, subject to the consent of Respondent which consent shall not be unreasonably withheld. If Respondent has not opposed, in writing, including the reasons for opposing, the selection of a proposed Interim Monitor within ten (10) Days after notice by the staff of the Commission to Respondent of the identity of any proposed Interim Monitor, Respondent shall be deemed to have consented to the selection of the proposed Interim Monitor.
C. Not later than ten (10) Days after the appointment of the Interim Monitor, Respondent shall execute an agreement BARR PHARMACEUTICALS, INC. 1221 Order to Maintain Assets that, subject to the prior approval of the Commission, confers on the Interim Monitor all the rights and powers necessary to permit the Interim Monitor to monitor Respondent’s compliance with the relevant requirements of the Orders in a manner consistent with the purposes of the Orders.
D. If one or more Interim Monitors are appointed pursuant to this Paragraph or pursuant to the relevant provisions of the Decision and Order in this matter, Respondent shall consent to the following terms and conditions regarding the powers, duties, authorities, and responsibilities of each Interim Monitor:
1. The Interim Monitor shall have the power and authority to monitor Respondent’s compliance with the divestiture and asset maintenance obligations and related requirements of the Orders, and shall exercise such power and authority and carry out the duties and responsibilities of the Interim Monitor in a manner consistent with the purposes of the Orders and in consultation with the Commission;
2. The Interim Monitor shall act in a fiduciary capacity for the benefit of the Commission;
3. The Interim Monitor shall serve until the later of: a. the completion by Respondent of:
(1) the divestiture of all Divestiture Assets in a manner that fully satisfies the requirements of the Orders; and (2) notification by each of the relevant Commission-approved Acquirers to the Interim Monitor that such Commission-approved VOLUME 142 Order to Maintain Assets Acquirer is: (1) approved by the FDA to manufacture the Trazodone Hydrochloride Products and the Triamterene Products, and (2) able to manufacture such Divestiture Products in commercial quantities, in a manner consistent with cGMP, independently of Respondent and PLIVA; and b. the completion by Respondent of the last obligation under the Orders pertaining to the Interim Monitor’s service;
provided, however, that the Commission may extend or modify this period as may be necessary or appropriate to accomplish the purposes of the Orders. E. Subject to any demonstrated legally recognized privilege, the Interim Monitor shall have full and complete access to Respondent’s personnel, books, documents, records kept in the normal course of business, facilities and technical information, and such other relevant information as the Interim Monitor may reasonably request, related to Respondent’s compliance with its obligations under the Orders, including, but not limited to, its obligations related to the relevant assets. Respondent shall cooperate with any reasonable request of the Interim Monitor and shall take no action to interfere with or impede the Interim Monitor’s ability to monitor Respondent’s compliance with the Orders.
F. The Interim Monitor shall serve, without bond or other security, at the expense of Respondent on such reasonable and customary terms and conditions as the Commission may set. The Interim Monitor shall have authority to employ, at the expense of Respondent, such consultants, accountants, attorneys and other representatives and BARR PHARMACEUTICALS, INC. 1223 Order to Maintain Assets assistants as are reasonably necessary to carry out the Interim Monitor’s duties and responsibilities. G. Respondent shall indemnify the Interim Monitor and hold the Interim Monitor harmless against any losses, claims, damages, liabilities, or expenses arising out of, or in connection with, the performance of the Interim Monitor’s duties, including all reasonable fees of counsel and other reasonable expenses incurred in connection with the preparations for, or defense of, any claim, whether or not resulting in any liability, except to the extent that such losses, claims, damages, liabilities, or expenses result from misfeasance, gross negligence, willful or wanton acts, or bad faith by the Interim Monitor.
H. Respondent shall report to the Interim Monitor in accordance with the requirements of this Order to Maintain Assets and/or as otherwise provided in any agreement approved by the Commission. The Interim Monitor shall evaluate the reports submitted to the Interim Monitor by Respondent, and any reports submitted by the Commission-approved Acquirer with respect to the performance of Respondent’s obligations under the Orders or the Remedial Agreement. Within one (1) month from the date the Interim Monitor receives these reports, the Interim Monitor shall report in writing to the Commission concerning performance by Respondent of its obligations under the Orders.
I. Respondent may require the Interim Monitor and each of the Interim Monitor’s consultants, accountants, attorneys and other representatives and assistants to sign a customary confidentiality agreement;
provided, however, that such agreement shall not restrict the Interim Monitor from providing any information to the Commission.
VOLUME 142 Order to Maintain Assets J. The Commission may, among other things, require the Interim Monitor and each of the Interim Monitor’s consultants, accountants, attorneys and other representatives and assistants to sign an appropriate confidentiality agreement related to Commission materials and information received in connection with the performance of the Interim Monitor’s duties. K. If the Commission determines that the Interim Monitor has ceased to act or failed to act diligently, the Commission may appoint a substitute Interim Monitor in the same manner as provided in this Paragraph or the relevant provisions of the Decision and Order in this matter. L. The Commission may on its own initiative, or at the request of the Interim Monitor, issue such additional orders or directions as may be necessary or appropriate to assure compliance with the requirements of the Orders. M. The Interim Monitor appointed pursuant to this Order to Maintain Assets or the relevant provisions of the Decision and Order in this matter may be the same person appointed as a Divestiture Trustee pursuant to the relevant provisions of the Decision and Order.
IV.
IT IS FURTHER ORDERED that within thirty (30) Days after the date this Order to Maintain Assets becomes final, and every thirty (30) Days thereafter until Respondent has fully complied with its obligations to assign, grant, license, divest, transfer, deliver or otherwise convey relevant assets as required by Paragraphs II.A., II.B., and III.A. of the related Decision and Order in this matter, Respondent shall submit to the Commission a verified written report setting forth in detail the manner and form in which it intends to comply, is complying, and has complied with this Order to Maintain Assets and the related BARR PHARMACEUTICALS, INC. 1225 Order to Maintain Assets Decision and Order; provided, however, that, after the Decision and Order in this matter becomes final, the reports due under this Order to Maintain Assets may be consolidated with, and submitted to the Commission at the same time as, the reports required to be submitted by Respondent pursuant to Paragraph VIII of the Decision and Order.
V.
IT IS FURTHER ORDERED that Respondent shall notify the Commission at least thirty (30) Days prior to any proposed (1) dissolution of Respondent, (2) acquisition, merger or consolidation of Respondent, or (3) any other change in Respondent that may affect compliance obligations arising out of the order, including, but not limited to, assignment, the creation or dissolution of subsidiaries, or any other change in Respondent. VI.
IT IS FURTHER ORDERED that, for purposes of determining or securing compliance with this Order to Maintain Assets, and subject to any legally recognized privilege, and upon written request and upon five (5) days notice to Respondent made to its principal United States offices or it headquarters address, Respondent shall, without restraint or interference, permit any duly authorized representative of the Commission: A. access, during business office hours of Respondent and in the presence of counsel, to all facilities and access to inspect and copy all books, ledgers, accounts, correspondence, memoranda and all other records and documents in the possession or under the control of Respondent related to compliance with this Order, which copying services shall be provided by Respondent at the request of the authorized representative(s) of the Commission; and VOLUME 142 Order to Maintain Assets B. to interview officers, directors, or employees of Respondent, who may have counsel present, regarding such matters.
VII.
IT IS FURTHER ORDERED that this Order to Maintain Assets shall terminate on the earlier of: A. Three (3) Days after the Commission withdraws its acceptance of the Consent Agreement pursuant to the provisions of Commission Rule 2.34, 16 C.F.R. § 2.34; or B. The latter of:
1. The day after the divestiture of all of the Divestiture Assets, as required by and described in the Decision and Order, has been completed and each Interim Monitor, in consultation with Commission staff and the Commission-approved Acquirer(s), notifies the Commission that all assignments, conveyances, deliveries, grants, licenses, transactions, transfers and other transitions related to such divestitures are complete, or the Commission otherwise directs that this Order to Maintain Assets is terminated; or 2. the day the related Decision and Order becomes final. By the Commission.
BARR PHARMACEUTICALS, INC. 1227 Order to Maintain Assets PUBLIC APPENDIX A TO THE ORDER TO MAINTAIN ASSETS AGREEMENT CONTAINING CONSENT ORDER AND PROPOSED DECISION AND ORDER VOLUME 142 Decision and Order DECISION AND ORDER The Federal Trade Commission (“Commission”), having initiated an investigation of the proposed acquisition by Respondent Barr Pharmaceuticals, Inc. of PLIVA d.d., and Respondent having been furnished thereafter with a copy of a draft Complaint that the Bureau of Competition proposed to present to the Commission for its consideration and that, if issued by the Commission, would charge Respondent with violations of Section 7 of the Clayton Act, as amended, 15 U.S.C. § 18, and Section 5 of the Federal Trade Commission Act, as amended, 15 U.S.C. § 45; and Respondent, its attorneys, and counsel for the Commission having thereafter executed an Agreement Containing Consent Orders (“Consent Agreement”), containing an admission by Respondent of all the jurisdictional facts set forth in the aforesaid draft of Complaint, a statement that the signing of said Consent Agreement is for settlement purposes only and does not constitute an admission by Respondent that the law has been violated as alleged in such Complaint, or that the facts as alleged in such Complaint, other than jurisdictional facts, are true, and waivers and other provisions as required by the Commission’s Rules; and The Commission having thereafter considered the matter and having determined that it had reason to believe that Respondent has violated the said Acts, and that a Complaint should issue stating its charges in that respect, and having thereupon issued its Complaint and an Order to Maintain Assets (attached to this Order as Appendix I), and having accepted the executed Consent Agreement and placed such Consent Agreement on the public record for a period of thirty (30) days for the receipt and consideration of public comments, now in further conformity with the procedure described in Commission Rule 2.34, 16 C.F.R. § 2.34, the Commission hereby makes the following jurisdictional findings and issues the following Decision and Order (“Order”): BARR PHARMACEUTICALS, INC. 1229 Decision and Order 1. Respondent Barr Pharmaceuticals, Inc. is a corporation organized, existing and doing business under and by virtue of the laws of the State of Delaware, with its headquarters address at 400 Chestnut Ridge Road, Woodcliff Lake, New Jersey 07677. 2. PLIVA d.d. is a corporation organized, existing and doing business under and by virtue of the laws of the Republic of Croatia, with its headquarters address at Ulica Graden Vukovara 49, 10000 Zagreb, Croatia, and the address of the principal place of business of its United States subsidiaries at 72 Eagle Rock Avenue, P.O. Box 371, East Hanover, New Jersey 07936.
3. The Commission has jurisdiction of the subject matter of this proceeding and of Respondent, and the proceeding is in the public interest.
ORDER I.
IT IS ORDERED that, as used in the Order, the following definitions shall apply:
A. “Barr” means Barr Pharmaceuticals, Inc., its directors, officers, employees, agents, representatives, predecessors, successors, and assigns; and its joint ventures, subsidiaries, divisions, groups and affiliates in each case controlled by Barr (including, but not limited to, Barr Laboratories, Inc.) and the respective directors, officers, employees, agents, representatives, predecessors, successors, and assigns of each. After the Acquisition, Barr shall include PLIVA.
B. “PLIVA” means PLIVA d.d., its directors, officers, employees, agents, representatives, predecessors, successors, and assigns; and its joint ventures, VOLUME 142 Decision and Order subsidiaries, divisions, groups and affiliates in each case controlled by PLIVA (including, but not limited to, its United States subsidiaries, i.e., PLIVA, Inc., PLIVA USA, and Odyssey Pharmaceuticals, Inc.), and the respective directors, officers, employees, agents, representatives, predecessors, successors, and assigns of each. C. “Respondent” means Barr.
D. “Commission” means the Federal Trade Commission. E. “Acquisition” means the Respondent’s acquisition of fifty percent (50%) or more of the voting securities of PLIVA. F. “Agency(ies)” means any government regulatory authority or authorities in the world responsible for granting approval(s), clearance(s), qualification(s), license(s), or permit(s) for any aspect of the research, Development, manufacture, marketing, distribution, or sale of a Product. The term “Agency” includes, but is not limited to, the United States Food and Drug Administration (“FDA”). G. “Apotex” means Apotex, Inc., a corporation organized, existing, and doing business under and by virtue of the laws of Canada, with its headquarters address at 200 Barmac Drive, Toronto ON M9L2Z7 and its United States subsidiary Apotex Corp, a corporation organized, existing, and doing business under and by virtue of the laws of State of Delaware.
H. “Application(s)” means all of the following: “New Drug Application” (“NDA”), “Abbreviated New Drug Application” (“ANDA”), “Supplemental New Drug Application” (“SNDA”), or “Marketing Authorization Application” (“MAA”) means the applications for a Product filed or to be filed with the FDA pursuant to 21 C.F.R. Part 314, and all supplements, amendments, and BARR PHARMACEUTICALS, INC. 1231 Decision and Order revisions thereto, any preparatory work, drafts and data necessary for the preparation thereof, and all correspondence between Respondent and the FDA related thereto. The term “Application” also includes an “Investigational New Drug Application” (“IND”) for a Product filed or to be filed with the FDA pursuant to 21 C.F.R. Part 312, and all supplements, amendments, and revisions thereto, any preparatory work, drafts and data necessary for the preparation thereof, and all correspondence between Respondent and the FDA related thereto.
I. “Banner” means Banner Pharmacaps Inc., a corporation organized, existing and doing business under and by virtue of the laws of the State of Delaware, with its headquarters address at 4125 Premier Drive, High Point, NC 27265- 8144.
J. “Cardinal” means Cardinal Health, Inc., a corporation organized, existing and doing business under and by virtue of the laws of the State of Ohio, with its headquarters address at 7000 Cardinal Place, Dublin, OH 43017. K. “Categorized Assets” means the following assets related to the specified Divestiture Product(s):
1. all Product Intellectual Property related to such Divestiture Product(s);
2. perpetual, fully paid-up and royalty-free license(s) with rights to sublicense to all Product Licensed Intellectual Property to use, make, distribute, offer for sale, promote, advertise, sell, import, export, or have used, made, distributed, offered for sale, promoted, advertised, sold, imported, or exported the Divestiture Product(s) within the specified Geographic Territory; VOLUME 142 Decision and Order 3. all Product Registrations related to such Divestiture Product(s);
4. all Product Manufacturing Technology related to such Divestiture Product(s);
5. all Product Marketing Materials related to such Divestiture Product(s);
6. a list of all of the NDC Numbers related to such Divestiture Product(s), and rights, to the extent permitted by Law:
a. to require Respondent to discontinue the use of those NDC Numbers in the sale or marketing of Products other than with respect to returns, rebates, allowances, and adjustments for Divestiture Products sold prior to the Effective Date; b. to prohibit Respondent from seeking from any customer any type of cross- referencing of those NDC Numbers with any Retained Product(s); c. to seek to change any cross-referencing by a customer of those NDC Numbers with the Retained Product(s) (including the right to receive notification from Respondent of any such crossreferencing that is discovered by Respondent); d. to seek cross-referencing from a customer of those NDC Numbers with the relevant Commissionapproved Acquirer’s NDC Numbers related to the Divestiture Product(s);
e. to approve the timing of Respondent’s discontinued use of those NDC Numbers in the sale or marketing of Products other than with BARR PHARMACEUTICALS, INC. 1233 Decision and Order respect to returns, rebates, allowances, and adjustments for Divestiture Products sold prior to the Effective Date;
f. to approve any notification(s) from Respondent to any customer(s) regarding the use or discontinued use of such numbers by Respondent prior to such notification(s) being disseminated to the customer(s);
7. all rights to all of Respondent’s Applications related to such Divestiture Product(s);
8. Right of Reference or Use to the Drug Master Files related to the above-described Applications including, but not limited to, the pharmacology and toxicology data contained in all Application(s);
9. for each Divestiture Product that is a medical device, all rights to all of Respondent’s or PLIVA’s (whichever party is relevant to such Divestiture Product(s)) Premarket Approvals and Premarket Notifications related to such Divestiture Product(s); 10. for each Divestiture Product that is a medical device, all rights to all of Respondent’s or PLIVA’s (whichever party is relevant to such Divestiture Product(s)) medical device reports, i.e., all submissions to and correspondence from the FDA related to the Divestiture Product made pursuant to 21 C.F.R. § 803;
11. all Product Development Reports related to such Divestiture Product(s);
12. at the relevant Commission-approved Acquirer’s option, all Product Assumed Contracts related to such VOLUME 142 Decision and Order Divestiture Product(s) (copies to be provided to the relevant Commission-approved Acquirer on or before the Closing Date);
13. all strategic safety program(s) submitted to the FDA related to such Divestiture Product(s) that is designed to decrease product risk by using one or more interventions or tools beyond the package insert; 14. all patient registries related to such Divestiture Product(s), and any other systematic active postmarketing surveillance program to collect patient data, laboratory data and identification information required to be maintained by the FDA to facilitate the investigation of adverse effects related to such Divestiture Product(s);
15. a list of all customers and/or targeted customers for such Divestiture Product(s) and the net sales (in either units or dollars) of such Divestiture Products to such customers on either an annual, quarterly, or monthly basis including, but not limited to, a separate list specifying the above-described information for the High Volume Accounts and including the name of the employee(s) for each High Volume Account that is or has been responsible for the purchase of such Divestiture Products on behalf of the High Volume Account and his or her business contact information; 16. at the relevant Commission-approved Acquirer’s option and to the extent approved by the Commission in the relevant Remedial Agreement, all inventory in existence as of the Closing Date including, but not limited to, raw materials, packaging materials, workin-process and finished goods related to such Divestiture Product(s);
BARR PHARMACEUTICALS, INC. 1235 Decision and Order 17. copies of all unfilled customer purchase orders for such Divestiture Product(s) as of the Closing Date, to be provided to the relevant Commission-approved Acquirer not later than two (2) days after the Closing Date;
18. at the relevant Commission-approved Acquirer’s option, subject to any rights of the customer, all unfilled customer purchase orders for such Divestiture Products; and 19. all of the Respondent’s or PLIVA’s (whichever party is relevant to such Divestiture Product(s)) books, records, and files directly related to the foregoing or to such Divestiture Product(s);
provided, however, that “Categorized Assets” shall not include documents relating to Respondent’s or PLIVA’s general business strategies or practices relating to research, development, manufacture, marketing or sales of generic pharmaceutical Products, where such documents do not discuss with particularity the Divestiture Products; provided further, the “Categorized Assets” shall not include administrative, financial, and accounting records;
provided further, Respondent may exclude from the “Categorized Assets” quality control records that are determined by the Interim Monitor or the Commissionapproved Acquirer not to be material to the manufacture of the Divestiture Product(s); provided further, that in cases in which documents or other materials included in the relevant assets to be divested contain information: (1) that relates both to VOLUME 142 Decision and Order such Divestiture Product(s) and to other Products or businesses of the Respondent or PLIVA and cannot be segregated in a manner that preserves the usefulness of the information as it relates to such Divestiture Product(s); or (2) for which the relevant party has a legal obligation to retain the original copies, the relevant party shall be required to provide only copies or relevant excerpts of the documents and materials containing this information. In instances where such copies are provided to the relevant Commissionapproved Acquirer, the relevant party shall provide such Commission-approved Acquirer access to original documents under circumstances where copies of documents are insufficient for evidentiary or regulatory purposes. The purpose of this proviso is to ensure that Respondent provides the relevant Commission-approved Acquirer with the abovedescribed information without requiring Respondent completely to divest itself of information that, in content, also relates to Retained Product(s). L. “cGMP” means current Good Manufacturing Practice as set forth in the United States Federal, Food, Drug, and Cosmetic Act, as amended, and includes all rules and regulations promulgated by the FDA thereunder. M. “Closing Date” means, as to each Divestiture Product, the date on which Respondent (or a Divestiture Trustee) consummates a transaction to assign, grant, license, divest, transfer, deliver, or otherwise convey assets related to such Divestiture Product to a Commission-approved Acquirer pursuant to this Order.
N. “Commission-approved Acquirer” means the following: 1. an entity specified by name in this Order to acquire particular assets or rights that Respondent is required BARR PHARMACEUTICALS, INC. 1237 Decision and Order to assign, grant, license, divest, transfer, deliver, or otherwise convey pursuant to this Order and that has been approved by the Commission to accomplish the requirements of this Order in connection with the Commission’s determination to make this Order final; or 2. an entity approved by the Commission to acquire particular assets or rights that Respondent is required to assign, grant, license, divest, transfer, deliver, or otherwise convey pursuant to this Order. O. “Confidential Business Information” means all information owned by, or in the possession or control of, Respondent or PLIVA that is not in the public domain and that is directly related to the research, Development, manufacture, marketing, commercialization, importation, exportation, cost, supply, sales, sales support or use of the Divestiture Product(s); provided however, that the restrictions contained in this Order regarding the use, conveyance, provision or disclosure of “Confidential Business Information” shall not apply to the following: 1. information that subsequently falls within the public domain through no violation of this Order or breach of confidentiality or non-disclosure agreement with respect to such information by Respondent; 2. information related to the Nimodipine (Barr) Products, Trazodone Hydrochloride Products, the Triamterene and Hydrochlorothiazide Products or the ViaSpan Products that PLIVA can demonstrate it obtained without the assistance of Respondent prior to the Acquisition;
3. information related to the Custodiol Products or the Nimodipine (PLIVA) Products that Respondent can VOLUME 142 Decision and Order demonstrate it obtained without the assistance of PLIVA prior to the Acquisition;
4. information related to the Trazodone Hydrochloride Tablets USP 300 mg;
5. information that is required by Law to be publicly disclosed;
6. information that does not directly relate to the Divestiture Product(s);
7. information relating to Respondent or PLIVA’s general business strategies or practices relating to research, development, manufacture, marketing or sales of generic pharmaceutical Products that does not discuss with particularity the Divestiture Product(s); or 8. information specifically excluded from the Categorized Assets.
P. “Contract Manufacture” means the manufacture of a Divestiture Product to be supplied by Respondent or a Designee to a Commission-approved Acquirer. Q. “Custodiol Product(s)” means all Products that contain Histidine, Tryptophan, Potassium hydrogen 2- Ketoglutarate and Mannitol, researched, Developed, in Development, manufactured, marketed or sold by PLIVA on or before the Effective Date. The term “Custodiol Products” includes, but is not limited to, all Products in Development, manufactured, marketed or sold by PLIVA on or before the Effective Date that are planned to be marketed for use in the preservation or cleansing of human organs during transplantation and/or for use in cardioplegia.
BARR PHARMACEUTICALS, INC. 1239 Decision and Order R. “Custodiol Product Assets” means all of PLIVA’s rights, title and interest in and to all assets related to PLIVA’s business within the United States of America (including all of the territories within its jurisdiction or control) and Canada related to the Custodiol Products to the extent legally transferable, including the research, Development, manufacture, distribution, marketing, and sale of the Custodiol Products, including, without limitation, the Categorized Assets related to the Custodiol Products. S. “Custodiol Product Divestiture Agreements” means the “Asset Purchase Agreement” by and between Odyssey Pharmaceuticals, Inc. and New Custodiol LLC dated as of August 2, 2006, and all amendments, exhibits, attachments, agreements, and schedules thereto, related to the Custodiol Products that have been approved by the Commission to accomplish the requirements of this Order. The Custodiol Product Divestiture Agreements are attached to this Order and contained in non-public Appendix II.B.
T. “Designee” means any entity other than Respondent or PLIVA that will manufacture a Divestiture Product for a Commission-approved Acquirer.
U. “Development” means all preclinical and clinical drug development activities (including formulation), including test method development and stability testing, toxicology, formulation, process development, manufacturing scaleup, development-stage manufacturing, quality assurance/quality control development, statistical analysis and report writing, conducting clinical trials for the purpose of obtaining any and all approvals, licenses, registrations or authorizations from any Agency necessary for the manufacture, use, storage, import, export, transport, promotion, marketing, and sale of a Product (including any government price or reimbursement approvals), VOLUME 142 Decision and Order Product approval and registration, and regulatory affairs related to the foregoing. “Develop” means to engage in Development.
V. “Direct Cost” means a cost not to exceed the cost of labor, material, travel and other expenditures to the extent the costs are directly incurred to provide the relevant assistance or service. “Direct Cost” to the Commissionapproved Acquirer for its use of any of Respondent’s employees’ labor shall not exceed the average hourly wage rate for such employee.
W. “Divestiture Product(s)” means the following Products: the Custodiol Products, the Nimodipine (Barr) Products, the Nimodipine (PLIVA) Products, the Trazodone Hydrochloride Products, the Triamterene and Hydrochlorothiazide Products, and the ViaSpan Products, individually and collectively.
X. “Divestiture Product Core Employees” means the Product Research and Development Employees and the Product Manufacturing Employees related to each Divestiture Product.
Y. “Divestiture Product Releasee(s)” means the Commissionapproved Acquirer for the assets related to a particular Divestiture Product or any entity controlled by or under common control with such Commission-approved Acquirer, or any licensees, sublicensees, manufacturers, suppliers, distributors, and customers of such Commission-approved Acquirer, or of such Commissionapproved Acquirer-affiliated entities. Z. “Divestiture Trustee” means the trustee appointed by the Commission pursuant to the relevant provisions of this Order.
BARR PHARMACEUTICALS, INC. 1241 Decision and Order AA. “Domain Name” means the domain name(s) (universal resource locators), and registration(s) thereof, issued by any entity or authority that issues and maintains the domain name registration. “Domain Name” shall not include any trademark or service mark rights to such domain names other than the rights to the Product Trademarks required to be divested.
BB. “Drug Master Files” means the information submitted to the FDA as described in 21 C.F.R. Part 314.420 related to a Product.
CC. “Effective Date” means the date on which the Acquisition occurs.
DD. “Expiration Date” means the earliest of the following days:
1. the day on which Respondent withdraws its tender offer for the voting securities of PLIVA; 2. the day on which Respondent’s tender offer for the voting securities of PLIVA expires without extension or amendment by Respondent;
3. the day on which an entity other than Respondent acquires fifty (50) percent or more of the voting securities of PLIVA; or 4. the day six (6) months after the day on which this Order becomes final.
EE. “Generic Divestiture Product Agreement(s)” means the “Asset Purchase Agreement” between Barr Laboratories, Inc. and Apotex Corp. dated as of October 2, 2006, and all amendments, exhibits, attachments, agreements, and schedules thereto and the “Interim Supply Agreement” VOLUME 142 Decision and Order between Barr Laboratories, Inc. and Apotex Corp. dated as of October 2, 2006, and all amendments, exhibits, attachments, agreements, and schedules thereto, related to the Trazodone Hydrochloride Product Assets, and the Triamterene and Hydrochlorothiazide Product Assets that have been approved by the Commission to accomplish the requirements of this Order. The Generic Divestiture Product Agreements are attached to this Order and contained in non-public Appendix II.A. FF. “Geographic Territory” shall mean the United States of America (including all of the territories within its jurisdiction or control) unless otherwise specified. GG. “Government Entity” means any Federal, state, local or non-U.S. government, or any court, legislature, government agency, or government commission, or any judicial or regulatory authority of any government. HH. “High Volume Account(s)” means any retailer, wholesaler or distributor whose annual and/or projected annual aggregate purchase amounts (on a company-wide level), in units or in dollars, of a Divestiture Product in the United States from the Respondent or PLIVA (whichever party is relevant to such Divestiture Product) was, is, or is projected to be among the top twenty highest of such purchase amounts by Respondent’s or PLIVA’s (whichever party is relevant to such Divestiture Product) U.S. customers on any of the following dates: (1) the end of the last quarter that immediately preceded the date of the public announcement of the proposed Acquisition; (2) the end of the last quarter that immediately preceded the Effective Date; (3) the end of the last quarter that immediately preceded the Closing Date for the relevant assets; or 4) the end of the last quarter following the Acquisition and/or the Closing Date.
BARR PHARMACEUTICALS, INC. 1243 Decision and Order II. “Interim Monitor” means any monitor appointed pursuant to Paragraph V of this Order or Paragraph III of the related Order to Maintain Assets.
JJ. “Law” means all laws, statutes, rules, regulations, ordinances, and other pronouncements by any Government Entity having the effect of law.
KK. “NDC Numbers” means the National Drug Code number(s), including both the labeler code assigned by the FDA and the additional numbers assigned by the Application holder as a product code for a specific Product.
LL. “New Custodiol” means New Custodiol LLC, a limited liability company organized, existing, and doing business under and by virtue of the laws of the State of Delaware, with its headquarters address at c/o Francis X. Wentworth, Jr., 1776 On The Green, 67 Park Place East, 8th Floor, Morristown, NJ 07960.
MM. “Nimodipine (Barr) Product(s)” means all of the following: all Products in Development, manufactured, marketed or sold by Respondent Barr pursuant to the following of Respondent Barr’s ANDAs:
1. ANDA No. 77-811; and 2. any supplements, amendments, or revisions thereto. NN. “Nimodipine (Barr) Product Assets means all of Respondent Barr’s rights, title and interest in and to all assets related to Respondent Barr’s business within the Geographic Territory related to the Nimodipine (Barr) Products to the extent legally transferable, including the research, Development, manufacture, distribution, marketing, and sale of the Nimodipine (Barr) Products, VOLUME 142 Decision and Order including, without limitation, the Categorized Assets related to the Nimodipine (Barr) Products. OO. “Nimodipine (PLIVA) Product(s)” means all of the following: all Products in Development, manufactured, marketed or sold by PLIVA pursuant to the following of PLIVA’s ANDAs:
1. ANDA No. 76-740; and 2. any supplements, amendments, or revisions thereto. PP. “Nimodipine (PLIVA) Product Agreement” means the “Amended and Restated Joint Venture Agreement” by and between Sidmak Laboratories, Inc. and Banner Pharmacaps, Inc. dated as of May 30, 2002, and all amendments, exhibits, attachments, agreements, and schedules thereto. The Nimodipine (PLIVA) Product Agreement is attached to this Order and contained in nonpublic Appendix III.1.
QQ. “Nimodipine (PLIVA) Product Assets means all of PLIVA’s rights, title and interest in and to all assets related to PLIVA’s business within the Geographic Territory related to the Nimodipine (PLIVA) Products to the extent legally transferable, including the research, Development, manufacture, distribution, marketing, and sale of the Nimodipine (PLIVA) Products, including, without limitation, the Categorized Assets related to the Nimodipine (PLIVA) Products.
RR. “Nimodipine (PLIVA) Product Divestiture Agreement(s)” means the “Asset Purchase Agreement” by and between PLIVA, Inc. and Banner Pharmacaps Inc., dated as of August 2, 2006, and the “Transition Services Agreement” by and between PLIVA, Inc. f/k/a Sidmak Laboratories, Inc. and Banner Pharmacaps Inc., dated as of August 2, BARR PHARMACEUTICALS, INC. 1245 Decision and Order 2006, and all amendments, exhibits, attachments, agreements, and schedules thereto, related to the Nimodipine (PLIVA) Products that have been approved by the Commission to accomplish the requirements of this Order. The Nimodipine (PLIVA) Product Divestiture Agreements are attached to this Order and contained in non-public Appendix III.1.
SS. “Order to Maintain Assets” means the Order to Maintain Assets incorporated into and made a part of the Agreement Containing Consent Orders. The Order to Maintain Assets is attached to this Order and contained in Appendix I. TT. “Ownership Interest” means any and all rights, present or contingent, of Respondent to hold any voting or nonvoting stock, share capital, equity or other interests or beneficial ownership in an entity.
UU. “Paragraph II Divestiture Products” means the following Products: (1) the Trazodone Hydrochloride Products; (2) the Triamterene and Hydrochlorothiazide Products; and (3) the Divestiture Products and the assets related to such Divestiture Products that Respondent divests in accordance with and pursuant to Paragraph II.B., i.e., either the Custodiol Products or the ViaSpan Products. VV. “Paragraph III Divestiture Products” means the Divestiture Products and the assets related to such Divestiture Products that Respondent divests in accordance with and pursuant to Paragraph III.A., i.e., either the Nimodipine (Barr) Products, or the Nimodipine (PLIVA) Products. WW. “Patents” means all patents, patent applications, including provisional patent applications, and statutory invention registrations, in each case existing as of the Closing Date (except where this Order specifies a different time), and includes all reissues, divisions, continuations, VOLUME 142 Decision and Order continuations-in-part, supplementary protection certificates, extensions and reexaminations thereof, all inventions disclosed therein, and all rights therein provided by international treaties and conventions, related to any Product of or owned by Respondent or PLIVA as of the Closing Date (except where this Order specifies a different time).
XX. “Person” means any individual, partnership, joint venture, firm, corporation, association, trust, unincorporated organization, joint venture, or other business or Government Entity, and any subsidiaries, divisions, groups or affiliates thereof.
YY. “Premarket Approval(s)” means the applications for a Product filed or to be filed with the FDA pursuant to 21 C.F.R. § 814, and all supplements, amendments, and revisions thereto, any preparatory work, drafts and data necessary for the preparation thereof, all information submitted with or incorporated by reference, and all correspondence between Respondent(s) and the FDA related thereto. The term “Premarket Approval(s)” includes all orders of approval and all reports and documents submitted to the FDA under postapproval requirements.
ZZ. “Premarket Notification(s)” means a premarketing submission for a Product filed or to be filed with the FDA pursuant to 21 C.F.R. § 807, and all supplements, amendments, and revisions thereto, any preparatory work, drafts and data necessary for the preparation thereof, all information submitted with or incorporated by reference, and all correspondence between Respondent(s) and the FDA related thereto, to demonstrate that a device to be marketed is as safe and effective, that is, substantially equivalent, to a legally marketed device that is not subject to Premarket Approval. The term “Premarket BARR PHARMACEUTICALS, INC. 1247 Decision and Order Notification(s)” includes all notices of registration and all reports and documents required to be submitted to the FDA related to the marketing of such Product. AAA. “Product” means:
1. any pharmaceutical, biological, or genetic composition containing any formulation or dosage of a compound referenced as its pharmaceutically, biologically, or genetically active ingredient; and/or 2. any medical device, i.e., an instrument, apparatus, implement, machine, contrivance, implant, in vitro reagent, or other similar or related article, including a component part, or accessory which is: a. recognized in the official National Formulary of the United States, or the United States Pharmacopoeia, or any supplement to them, b. intended for use in the diagnosis of disease or other conditions, or in the cure, mitigation, treatment, or prevention of disease, in man or other animals, or c. intended to affect the structure or any function of the body of man, and which does not achieve any of its primary intended purposes through chemical action within or on the body of man and which is not dependent upon being metabolized for the achievement of any of its primary intended purposes.
BBB. “Product Assumed Contracts” means all of the following contracts or agreements (copies of each such contract to be provided to the Commission-approved Acquirer on or before the relevant Closing Date and segregated in a VOLUME 142 Decision and Order manner that clearly identifies the purpose(s) of each such contract):
1. that make specific reference to the Divestiture Product(s) and pursuant to which any Third Party is obligated to purchase, or has the option to purchase without further negotiation of terms, the Divestiture Product(s) from Respondent or PLIVA (whichever party is relevant to such Divestiture Product) unless such contract applies generally to the divesting entity’s sales of Products to that Third Party; 2. pursuant to which Respondent or PLIVA (whichever party is relevant to such Divestiture Product) purchases the active pharmaceutical ingredient(s) or other necessary ingredient(s) or had planned to purchase the active pharmaceutical ingredient(s) or other necessary ingredient(s) from any Third Party for use in connection with the manufacture of the Divestiture Product(s);
3. relating to any clinical trials involving the Divestiture Product(s);
4. with universities or other research institutions for the use of the Divestiture Product(s) in scientific research; 5. relating to the particularized marketing of the Divestiture Product(s) or educational matters relating solely to the Divestiture Product(s);
6. pursuant to which a Third Party manufactures the Divestiture Product(s) on behalf of Respondent or PLIVA (whichever party is relevant to such Divestiture Product);
BARR PHARMACEUTICALS, INC. 1249 Decision and Order 7. pursuant to which a Third Party provides the Product Manufacturing Technology or related equipment related to the Divestiture Product(s) to Respondent or PLIVA (whichever party is relevant to such Divestiture Product);
8. constituting confidentiality agreements involving the Divestiture Product(s);
9. involving any royalty, licensing, or similar arrangement involving the Divestiture Product(s); 10. pursuant to which a Third Party provides any specialized services necessary to the research, Development, manufacture or distribution of the Divestiture Products to Respondent or PLIVA (whichever party is relevant to such Divestiture Product) including, but not limited to, consultation arrangements; and/or 11. pursuant to which any Third Party collaborates with Respondent or PLIVA (whichever party is relevant to such Divestiture Product) in the performance of research, Development, marketing, distribution or selling of the Divestiture Product(s) or the Divestiture Product(s) business;
provided, however, that where any such contract or agreement also relates to a Retained Product(s), Respondent shall assign the Commission-approved Acquirer all such rights under the contract or agreement as are related to the Divestiture Product(s), but concurrently may retain similar rights for the purposes of the Retained Product(s).
CCC. “Product Copyrights” means rights to all original works of authorship of any kind directly related to the Divestiture VOLUME 142 Decision and Order Product(s) and any registrations and applications for registrations thereof within the Geographic Territory, including, but not limited to, the following: all such rights with respect to all promotional materials for healthcare providers; all promotional materials for patients; educational materials for the sales force; copyrights in all preclinical, clinical and process development data and reports relating to the research and Development of the Divestiture Product(s) or of any materials used in the research, Development, manufacture, marketing or sale of the Divestiture Product(s), including all raw data relating to clinical trials of the Divestiture Product(s), all case report forms relating thereto and all statistical programs developed (or modified in a manner material to the use or function thereof (other than through user references)) to analyze clinical data, all market research data, market intelligence reports and statistical programs (if any) used for marketing and sales research; customer information, promotional and marketing materials, the Divestiture Product(s) sales forecasting models, medical education materials, sales training materials, and advertising and display materials; all records relating to employees who accept employment with the Commission-approved Acquirer (excluding any personnel records the transfer of which is prohibited by applicable Law); all records, including customer lists, sales force call activity reports, vendor lists, sales data, reimbursement data, speaker lists, manufacturing records, manufacturing processes, and supplier lists; all data contained in laboratory notebooks relating to the Divestiture Product(s) or relating to its biology; all adverse experience reports and files related thereto (including source documentation) and all periodic adverse experience reports and all data contained in electronic databases relating to adverse experience reports and periodic adverse experience reports; all analytical and quality control data; and all correspondence with the FDA. BARR PHARMACEUTICALS, INC. 1251 Decision and Order DDD. “Product Development Reports” means: 1. Pharmacokinetic study reports related to the specified Divestiture Product(s);
2. Bioavailability study reports (including reference listed drug information) related to the specified Divestiture Product(s);
3. Bioequivalence study reports (including reference listed drug information) related to the specified Divestiture Product(s);
4. all correspondence to the Respondent or PLIVA (whichever party is relevant to such Divestiture Product) from the FDA and from the Respondent or PLIVA (whichever party is relevant to such Divestiture Product) to the FDA relating to the Application(s) submitted by, on behalf of, or acquired by, the Respondent or PLIVA (whichever party is relevant to such Divestiture Product) related to the specified Divestiture Product;
5. annual and periodic reports related to the abovedescribed Application(s), including any safety update reports;
6. FDA approved Product labeling related to the specified Divestiture Product(s);
7. currently used product package inserts (including historical change of controls summaries) related to the specified Divestiture Product(s);
8. FDA approved patient circulars and information related to the specified Divestiture Product(s); VOLUME 142 Decision and Order 9. adverse event/serious adverse event summaries related to the specified Divestiture Product(s); 10. summary of Product complaints from physicians related to the specified Divestiture Product(s); 11. summary of Product complaints from customers related to the specified Divestiture Product(s); and 12. Product recall reports filed with the FDA related to the specified Divestiture Product(s).
EEE. “Product Employee Information” means the following, for each Divestiture Product Core Employee, as and to the extent permitted by the Law:
1. a complete and accurate list containing the name of each relevant employee (including former employees who were employed by Respondent within ninety (90) days of the execution date of any Remedial Agreement);
2. with respect to each such employee, the following information:
a. the date of hire and effective service date; b. job title or position held;
c. a specific description of the employee’s responsibilities related to the relevant Divestiture Product; provided, however, in lieu of this description, Respondent may provide the employee’s most recent performance appraisal; d. the base salary or current wages;
BARR PHARMACEUTICALS, INC. 1253 Decision and Order e. the most recent bonus paid, aggregate annual compensation for Respondent’s last fiscal year and current target or guaranteed bonus, if any; f. employment status (i.e., active or on leave or disability; full-time or part-time); and g. any other material terms and conditions of employment in regard to such employee that are not otherwise generally available to similarly situated employees; and 3. at the Commission-approved Acquirer’s option or the Proposed Acquirer’s option (as applicable), copies of all employee benefit plans and summary plan descriptions (if any) applicable to the relevant employees.
FFF. “Product Intellectual Property” means all of the following related to a Divestiture Product (other than Product Licensed Intellectual Property):
1. Patents;
2. Product Copyrights;
3. Product Trademarks, Product Trade Dress, trade secrets, know-how, techniques, data, inventions, practices, methods, and other confidential or proprietary technical, business, research, Development and other information; and 4. rights to obtain and file for patents and copyrights and registrations thereof;
provided, however, “Product Intellectual Property” does not include the names or trade dress of “Barr”, “PLIVA”, VOLUME 142 Decision and Order or the names or trade dress of any other corporations, companies, or brands owned or sold by Respondent or PLIVA or the related logos to the extent used on Respondent’s or PLIVA’s Retained Products. GGG. “Product Licensed Intellectual Property” means the following:
1. Patents that are related to a Divestiture Product that Respondent can demonstrate have been routinely used, prior to the Effective Date, by either Respondent or PLIVA (whichever party is relevant to such Divestiture Product) for a Retained Product(s) that: a. has been marketed or sold on an extensive basis by Respondent or PLIVA (whichever party is relevant to such Divestiture Product) within the two-year period immediately preceding the Acquisition; or b. for which, prior to the announcement of the Acquisition, there was an approved marketing plan to market or sell such a Retained Product on an extensive basis by Respondent or PLIVA; and 2. trade secrets, know-how, techniques, data, inventions, practices, methods, and other confidential or proprietary technical, business, research, Development, and other information, and all rights in any jurisdiction to limit the use or disclosure thereof, that are related to a Divestiture Product and that Respondent or PLIVA can demonstrate have been routinely used, prior to the Effective Date, by either Respondent or PLIVA (whichever party is relevant to such Divestiture Product) for a Retained Product(s) that:
a. has been marketed or sold on an extensive basis by either Respondent or PLIVA (whichever party is BARR PHARMACEUTICALS, INC. 1255 Decision and Order relevant to such Divestiture Product) within the two-year period immediately preceding the Acquisition; or b. for which, prior to the announcement of the Acquisition, there was an approved marketing plan to market or sell such a Retained Product on an extensive basis by Respondent or PLIVA; provided however, that, in cases where the aggregate retail sales in dollars within the two-year period immediately preceding the Acquisition of the Retained Product(s) collectively are less than the aggregate retail sales in dollars within the same period of the Divestiture Product(s) collectively, the abovedescribed intellectual property shall be considered, at the Commission-approved Acquirer’s option, to be Product Intellectual Property and, thereby, subject to assignment to the Commission-approved Acquirer; provided further, however, that in such cases, Respondent may take a license back from the Commission-approved Acquirer for such intellectual property for use in connection with the Retained Products.
HHH. “Product Manufacturing Employees” means all salaried employees of Respondent or PLIVA who have directly participated in the planning, design, implementation or use of the Product Manufacturing Technology of the specified Divestiture Product(s) (irrespective of the portion of working time involved unless such participation consisted solely of oversight of legal, accounting, tax or financial compliance) within the eighteen (18) month period immediately prior to the Closing Date. III. “Product Manufacturing Technology” means all technology, trade secrets, know-how, and proprietary VOLUME 142 Decision and Order information (whether patented, patentable or otherwise) related to the manufacture of the Divestiture Product(s) (including, for those instances in which the manufacturing equipment is not readily available from a Third Party, at the Commission-approved Acquirer’s option, all such equipment used to manufacture the Divestiture Product(s)), including, but not limited to, the following: all product specifications, processes, product designs, plans, trade secrets, ideas, concepts, manufacturing, engineering, and other manuals and drawings, standard operating procedures, flow diagrams, chemical, safety, quality assurance, quality control, research records, clinical data, compositions, annual product reviews, regulatory communications, control history, current and historical information associated with the FDA Application(s) conformance and cGMP compliance, and labeling and all other information related to the manufacturing process, and supplier lists. JJJ. “Product Marketing Materials” means all marketing materials used specifically in the marketing or sale of a Divestiture Product(s) in the Geographic Territory as of the Closing Date, including, without limitation, all advertising materials, training materials, product data, mailing lists, sales materials (e.g., detailing reports, vendor lists, sales data), marketing information (e.g., competitor information, research data, market intelligence reports, statistical programs (if any) used for marketing and sales research), customer information (including customer net purchases information to be provided on the basis of either dollars and/or units for each month, quarter or year), sales forecasting models, educational materials, and advertising and display materials, speaker lists, promotional and marketing materials, Website content and advertising and display materials, artwork for the production of packaging components, television masters and other similar materials related to the Divestiture Product(s); provided however, BARR PHARMACEUTICALS, INC. 1257 Decision and Order “Product Marketing Materials” excludes the pricing of each of the Divestiture Products to customers except for the Custodiol Products and the ViaSpan Products. KKK. “Product Registrations” means all registrations, permits, licenses, consents, authorizations, and other approvals, and pending applications and requests therefor, required by applicable Agencies related to the research, Development, manufacture, distribution, finishing, packaging, marketing, or sale of the Product within the Geographic Territory, including all Applications in existence for the Product as of the Closing Date.
LLL. “Product Research and Development Employees” means all salaried employees of Respondent or PLIVA who directly have participated in the research, Development, or regulatory approval process, or clinical studies of the specified Divestiture Product(s) (irrespective of the portion of working time involved, unless such participation consisted solely of oversight of legal, accounting, tax or financial compliance) within the eighteen (18) month period immediately prior to the Closing Date.
MMM. “Product Trade Dress” means the current trade dress of the Divestiture Product, including but not limited to, Product packaging, and the lettering of the Product trade name or brand name.
NNN. “Product Trademark(s)” means all proprietary names or designations, trademarks, service marks, trade names, and brand names, including registrations and applications for registration therefor (and all renewals, modifications, and extensions thereof) and all common law rights, and the goodwill symbolized thereby and associated therewith, for the Product(s).
VOLUME 142 Decision and Order OOO. “Proposed Acquirer” means an entity proposed by Respondent (or a Divestiture Trustee) to the Commission and submitted for the approval of the Commission as the acquirer for particular assets required to be assigned, granted, licensed, divested, transferred, delivered or otherwise conveyed by Respondent pursuant to this Order. PPP. “Remedial Agreement(s)” means the following: 1. any agreement between Respondent and a Commission-approved Acquirer that is specifically referenced and attached to this Order, including all amendments, exhibits, attachments, agreements, and schedules thereto, related to the relevant assets or rights to be assigned, granted, licensed, divested, transferred, delivered, or otherwise conveyed, and that has been approved by the Commission to accomplish the requirements of the Order in connection with the Commission’s determination to make this Order final; 2. any agreement between Respondent and a Third Party to effect the assignment of assets or rights of Respondent related to a Divestiture Product to the benefit of a Commission-approved Acquirer that is specifically referenced and attached to this Order, including all amendments, exhibits, attachments, agreements, and schedules thereto, that has been approved by the Commission to accomplish the requirements of the Order in connection with the Commission’s determination to make this Order final; 3. any agreement between Respondent and a Commission-approved Acquirer (or between a Divestiture Trustee and a Commission-approved Acquirer) that has been approved by the Commission to accomplish the requirements of this Order, including all amendments, exhibits, attachments, BARR PHARMACEUTICALS, INC. 1259 Decision and Order agreements, and schedules thereto, related to the relevant assets or rights to be assigned, granted, licensed, divested, transferred, delivered, or otherwise conveyed, and that has been approved by the Commission to accomplish the requirements of this Order; and/or 4. any agreement between Respondent and a Third Party to effect the assignment of assets or rights of Respondent related to a Divestiture Product to the benefit of a Commission-approved Acquirer that has been approved by the Commission to accomplish the requirements of this Order, including all amendments, exhibits, attachments, agreements, and schedules thereto.
QQQ. “Retained Product” means any Product(s) other than a Divestiture Product.
RRR. “Right of Reference or Use” means the authority to rely upon, and otherwise use, an investigation for the purpose of obtaining approval of an Application, including the ability to make available the underlying raw data from the investigation for FDA audit.
SSS. “Supply Cost” means a cost not to exceed the manufacturer’s average direct per unit cost of manufacturing the Divestiture Product for the twelve (12) month period immediately preceding the Effective Date. “Supply Cost” shall expressly exclude any intracompany business transfer profit.
TTT. “Third Party(ies)” means any private entity other than the following: (1) Respondent; (2) PLIVA or (3) the relevant Commission-approved Acquirer for the affected assets, rights and Divestiture Product(s).
VOLUME 142 Decision and Order UUU. “Trazodone Hydrochloride Product(s)” means all of the following: all Products in Development, manufactured, marketed or sold by Respondent Barr pursuant to the following of Respondent Barr’s ANDAs:
1. ANDA No. 71-196 (Trazodone Hydrochloride Tablets USP 100 mg, 150 mg, 300 mg);
2. ANDA No. 71-258 (Trazodone Hydrochloride Tablets USP 50 mg); and 3. any supplements, amendments, or revisions thereto. VVV. “Trazodone Hydrochloride Product Assets” means all of Respondent Barr’s rights, title and interest in and to all assets related to Respondent Barr’s business within the Geographic Territory related to the Trazodone Hydrochloride Products to the extent legally transferable, including the research, Development, manufacture, distribution, marketing, and sale of the Trazodone Hydrochloride Products, including, without limitation, the Categorized Assets related to the Trazodone Hydrochloride Products; provided, however, Respondent may receive a non-exclusive license from the Commission-approved Acquirer to market Trazodone Hydrochloride Tablets USP 300 mg.
WWW. “Triamterene and Hydrochlorothiazide Product(s)” means all of the following: all Products in Development, manufactured, marketed or sold by Respondent Barr pursuant to the following of Respondent Barr’s ANDAs: 1. ANDA No. 71-251 (Triamterene/Hydrochlorothiazide Tablets USP 37.5 mg/25 mg); and 2. any supplements, amendments, or revisions thereto. BARR PHARMACEUTICALS, INC. 1261 Decision and Order XXX. “Triamterene and Hydrochlorothiazide Product Assets” means all of Respondent Barr’s rights, title and interest in and to all assets related to Respondent Barr’s business within the Geographic Territory related to the Triamterene and Hydrochlorothiazide Products to the extent legally transferable, including the research, Development, manufacture, distribution, marketing, and sale of the Triamterene and Hydrochlorothiazide Products, including, without limitation, the Categorized Assets related to the Triamterene and Hydrochlorothiazide Products. YYY. “ViaSpan Product(s)” means all of the Products in Development, manufactured, marketed or sold by Respondent Barr pursuant to the following Premarket Notification:
1. 510(k) No. K944866; and 2. any supplements, amendments, or revisions thereto; The term “ViaSpan Products” also includes all Products in Development, manufactured, marketed or sold by Barr on or before the Effective Date that are planned to be marketed for use in the preservation of human organs during transplantation and/or for use in cardioplegia. ZZZ. “ViaSpan Product Assets” means all of Respondent Barr’s rights, title and interest in and to all assets related to Respondent Barr’s business within the Geographic Territory related to the ViaSpan Products to the extent legally transferable, including the research, Development, manufacture, distribution, marketing, and sale of the ViaSpan Products, including, without limitation, the Categorized Assets related to the ViaSpan Products. AAAA. “Website” means the content of the Website(s) located at the Domain Names, the Domain Names, and all copyrights VOLUME 142 Decision and Order in such Website(s), to the extent owned by Respondent; provided, however, “Website” shall not include the following: (1) content owned by Third Parties and other Product Intellectual Property not owned by Respondent that are incorporated in such Website(s), such as stock photographs used in the Website(s), except to the extent that Respondent can convey its rights, if any, therein; or (2) content unrelated to the Product(s). II.
IT IS FURTHER ORDERED that:
A. Not later than ten (10) days after the Effective Date, Respondent shall divest the Trazodone Hydrochloride Product Assets, and the Triamterene Product Assets, absolutely and in good faith, to Apotex pursuant to, and in accordance with, the Generic Divestiture Product Agreements (which agreements shall not vary or contradict, or be construed to vary or contradict, the terms of this Order, it being understood that nothing in this Order shall be construed to reduce any rights or benefits of Apotex or to reduce any obligations of Respondent under such agreements), and each such agreement, if it becomes the Remedial Agreement related to the Trazodone Hydrochloride Product Assets, and the Triamterene Product Assets, respectively, is incorporated by reference into this Order and made a part hereof; provided, however, that if Respondent has divested the Trazodone Hydrochloride Product Assets, and the Triamterene Product Assets to Apotex prior to the date this Order becomes final, and if, at the time the Commission determines to make this Order final, the Commission notifies Respondent that Apotex is not an acceptable purchaser of the Trazodone Hydrochloride Product Assets, or the Triamterene Product Assets then Respondent shall BARR PHARMACEUTICALS, INC. 1263 Decision and Order immediately rescind the transaction with Apotex, in whole or in part, as directed by the Commission, and shall divest the Trazodone Hydrochloride Product Assets, and the Triamterene Product Assets, as is relevant, within one hundred eighty (180) days from the date the Order becomes final, absolutely and in good faith, at no minimum price, to a Commission-approved Acquirer(s) and only in a manner that receives the prior approval of the Commission;
provided further that if Respondent has divested the Trazodone Hydrochloride Product Assets, and the Triamterene Product Assets to Apotex prior to the date this Order becomes final, and if, at the time the Commission determines to make this Order final, the Commission notifies Respondent that the manner in which the divestiture was accomplished is not acceptable, the Commission may direct Respondent, or appoint a Divestiture Trustee, to effect such modifications to the manner of divestiture of the Trazodone Hydrochloride Product Assets, and the Triamterene Product Assets to Apotex (including, but not limited to, entering into additional agreements or arrangements) as the Commission may determine are necessary to satisfy the requirements of this Order.
B. Respondent either:
1. not later than ten (10) days after the Effective Date, shall divest the Custodiol Product Assets, absolutely and in good faith, to New Custodiol pursuant to, and in accordance with, the Custodiol Product Divestiture Agreements (which agreements shall not vary or contradict, or be construed to vary or contradict, the terms of this Order, it being understood that nothing in this Order shall be construed to reduce any rights or benefits of New Custodiol or to reduce any obligations of Respondent under such agreements), and each such VOLUME 142 Decision and Order agreement, if it becomes the Remedial Agreement related to the Custodiol Product Assets, is incorporated by reference into this Order and made a part hereof; provided, however, that if Respondent has divested the Custodiol Product Assets to New Custodiol prior to the date this Order becomes final, and if, at the time the Commission determines to make this Order final, the Commission notifies Respondent that New Custodiol is not an acceptable purchaser of the Custodiol Product Assets then Respondent shall immediately rescind the transaction with New Custodiol, in whole or in part, as directed by the Commission, and shall divest either the Custodiol Product Assets or the ViaSpan Product Assets within one hundred eighty (180) days from the date the Order becomes final, absolutely and in good faith, at no minimum price, to a Commission-approved Acquirer and only in a manner that receives the prior approval of the Commission;
provided further that if Respondent has divested the Custodiol Product Assets to New Custodiol prior to the date this Order becomes final, and if, at the time the Commission determines to make this Order final, the Commission notifies Respondent that the manner in which the divestiture was accomplished is not acceptable, the Commission may direct Respondent, or appoint a Divestiture Trustee, to effect such modifications to the manner of divestiture of the Custodiol Product Assets to New Custodiol (including, but not limited to, entering into additional agreements or arrangements) as the Commission may determine are necessary to satisfy the requirements of this Order; or 2. not later than ninety (90) days from the date on which this Order becomes final, shall divest the ViaSpan Product Assets, absolutely and in good faith, at no BARR PHARMACEUTICALS, INC. 1265 Decision and Order minimum price, to a Commission-approved Acquirer and only in a manner that receives the prior approval of the Commission.
C. Any Remedial Agreement related to the Paragraph II Divestiture Products shall be deemed incorporated into this Order, and any failure by Respondent to comply with any term of such Remedial Agreement shall constitute a failure to comply with this Order. Respondent shall include in each Remedial Agreement related to each of the Paragraph II Divestiture Products a specific reference to this Order, and the remedial purpose thereof. D. Respondent shall do the following and, in addition, include the following among the provisions in the Remedial Agreement(s) related to each of the Paragraph II Divestiture Products:
1. upon reasonable notice and request from the Commission-approved Acquirer to Respondent, Respondent shall provide in a timely manner at no greater than Direct Cost the following: a. assistance and advice to enable the Commissionapproved Acquirer (or the Designee of the Commission-approved Acquirer) to obtain all necessary permits and approvals from any Agency or Government Entity to manufacture and sell the relevant Divestiture Products;
b. assistance to the Commission-approved Acquirer (or the Designee of the Commission-approved Acquirer) to manufacture the relevant Divestiture Product(s) in substantially the same manner, quality, and quantity(ies) employed or achieved by either Respondent or PLIVA for the relevant Divestiture Product(s); and VOLUME 142 Decision and Order c. consultation with knowledgeable employees of Respondent and training, at the request of the Commission-approved Acquirer and at a facility chosen by the Commission-approved Acquirer, until the Commission-approved Acquirer (or the Designee of the Commission-approved Acquirer) obtains all FDA approvals necessary to manufacture in commercial quantities, and in a manner consistent with cGMP, the relevant Divestiture Product(s) independently of Respondent and PLIVA and sufficient to satisfy management of the Commission-approved Acquirer that its personnel (or the Designee’s personnel) are adequately trained in the manufacture of the relevant Divestiture Product(s); d. personnel, assistance and training as the Commission-approved Acquirer might reasonably need to transfer the assets related to the Divestiture Products;
e. the foregoing provisions, II.D.1.a. - e., shall remain in effect until the relevant Commission-approved Acquirer (or the Designee(s) of such Commissionapproved Acquirer) is: (1) approved by the FDA to manufacture each of the relevant Divestiture Products, and (2) able to manufacture such Divestiture Products in commercial quantities, in a manner consistent with cGMP, independently of Respondent and PLIVA;
2. provide an organized, comprehensive, complete, useful, timely, and meaningful transfer of information related to the Product Manufacturing Technology, and, as a part of such transfer, shall designate employees of Respondent knowledgeable with respect to such BARR PHARMACEUTICALS, INC. 1267 Decision and Order Product Manufacturing Technology and experienced in such transfers to a committee for the purposes of communicating directly with the Commissionapproved Acquirer and the Interim Monitor (if applicable) for the purposes of effecting such transfer; 3. include in the Remedial Agreement a representation from the relevant Commission-approved Acquirer that such Commission-approved Acquirer shall use commercially reasonable efforts to secure the FDA approval(s) necessary to manufacture, or to have manufactured by a Third Party, in commercial quantities, each such Divestiture Product and to have any such manufacture to be independent of Respondent and PLIVA, all as soon as reasonably practicable;
4. upon reasonable notice and request from the Commission-approved Acquirer to Respondent, Respondent shall provide, in a timely manner, at no greater than Direct Cost, assistance of knowledgeable employees of Respondent to assist the Commissionapproved Acquirer to defend against, respond to, or otherwise participate in any litigation related to the Product Intellectual Property related to the relevant Divestiture Product(s);
5. for any patent infringement suit in which Respondent or PLIVA is a party prior to the Closing Date or for which Respondent or PLIVA has prepared or is preparing as of the Closing Date to be a party, and where such a suit would have the potential to interfere with the Commission-approved Acquirer’s freedom to practice in the research, Development, manufacture, use, import, export, distribution or sale of the relevant Divestiture Product(s), Respondent shall: VOLUME 142 Decision and Order a. cooperate with the Commission-approved Acquirer and provide any and all necessary technical and legal assistance, documentation and witnesses from Respondent in connection with obtaining resolution of any pending patent litigation involving a Divestiture Product;
b. waive conflicts of interest, if any, to allow Respondent’s or PLIVA’s outside legal counsel to represent the Commission-approved Acquirer in any ongoing patent litigation involving a Divestiture Product; and c. permit the transfer to the Commission-approved Acquirer of all of the litigation files and any related attorney work-product in the possession of Respondent’s or PLIVA’s outside counsel relating to such Divestiture; and 6. Respondent shall not seek pursuant to any dispute resolution mechanism incorporated in any Remedial Agreement a decision the result of which would be inconsistent with the terms of this Order and/or the remedial purposes thereof.
E. Respondent shall do the following and, in addition, shall include the following among the provisions in the Remedial Agreement(s) related to each of the following Divestiture Products: Trazodone Hydrochloride Product(s) and Triamterene and Hydrochlorothiazide Product(s):
1. upon reasonable notice and request from the Commission-approved Acquirer to Respondent, Respondent shall Contract Manufacture and deliver to the Commission-approved Acquirer, in a timely manner and under reasonable terms and conditions, a BARR PHARMACEUTICALS, INC. 1269 Decision and Order supply of each of the relevant Divestiture Products at Respondent’s Supply Cost, for a period of time sufficient to allow the Commission-approved Acquirer (or the Designee of the Commission-approved Acquirer) to obtain all of the relevant Agency approvals necessary to manufacture in commercial quantities, and in a manner consistent with cGMP, the relevant finished drug product independently of Respondent and PLIVA and to secure sources of supply of the relevant active pharmaceutical ingredients, excipients, other ingredients, and/or necessary components specified in the Respondent’s Application(s) for the Product from entities other than Respondent or PLIVA; provided, however, that in each instance where: (1) an agreement to Contract Manufacture is specifically referenced and attached to this Order, and (2) such agreement becomes a Remedial Agreement for a Divestiture Product, Supply Cost shall be determined as specified in such Remedial Agreement;
2. Respondent shall make representations and warranties to the Commission-approved Acquirer that the Product(s) supplied through Contract Manufacture pursuant to the Remedial Agreement meet the relevant Agency-approved specifications. For the Product(s) to be marketed or sold in the Geographic Territory, Respondent shall agree to indemnify, defend and hold the Commission-approved Acquirer harmless from any and all suits, claims, actions, demands, liabilities, expenses or losses alleged to result from the failure of the Product(s) supplied to the Commission-approved Acquirer pursuant to the Remedial Agreement by Respondent to meet cGMP. This obligation may be made contingent upon the Commission-approved Acquirer giving Respondent prompt, adequate notice of such claim and cooperating fully in the defense of VOLUME 142 Decision and Order such claim. The Remedial Agreement shall be consistent with the obligations assumed by Respondent under this Order; provided, however, that Respondent may reserve the right to control the defense of any such litigation, including the right to settle the litigation, so long as such settlement is consistent with Respondent’s responsibilities to supply the ingredients and/or components in the manner required by this Order; provided further that this obligation shall not require Respondent to be liable for any negligent act or omission of the Commission-approved Acquirer or for any representations and warranties, express or implied, made by the Commission-approved Acquirer that exceed the representations and warranties made by Respondent to the Commission-approved Acquirer; provided further that in each instance where: (1) an agreement to divest relevant assets is specifically referenced and attached to this Order, and (2) such agreement becomes a Remedial Agreement for a Divestiture Product, each such agreement may contain limits on Respondent’s aggregate liability resulting from the failure of the Products supplied to the Commission-approved Acquirer pursuant to such Remedial Agreement by Respondent to meet cGMP; 3. Respondent shall make representations and warranties to the Commission-approved Acquirer that Respondent shall hold harmless and indemnify the Commissionapproved Acquirer for any liabilities or loss of profits resulting from the failure by Respondent to deliver the Products in a timely manner as required by the Remedial Agreement unless Respondent can demonstrate that its failure was entirely beyond the control of Respondent and in no part the result of negligence or willful misconduct by Respondent; provided, however, that in each instance where: (1) an agreement to divest relevant assets is specifically BARR PHARMACEUTICALS, INC. 1271 Decision and Order referenced and attached to this Order, and (2) such agreement becomes a Remedial Agreement for a Divestiture Product, each such agreement may contain limits on Respondent’s aggregate liability for such a breach; and 4. during the term of the Contract Manufacture between Respondent and the Commission-approved Acquirer, upon request of the Commission-approved Acquirer or Interim Monitor (if any has been appointed), Respondent shall make available to the Commissionapproved Acquirer and the Interim Monitor (if any has been appointed) all records that relate to the manufacture of the relevant Divestiture Products that are generated or created after the Closing Date. The foregoing provisions, II.E.1. - 4., shall remain in effect until the relevant Commission-approved Acquirer (or the Designee(s) of such Commission-approved Acquirer) is: (1) approved by the FDA to manufacture each of the relevant Divestiture Products, and (2) able to manufacture such Divestiture Products in commercial quantities, in a manner consistent with cGMP, independently of Respondent and PLIVA. F. Respondent shall:
1. submit to the Commission-approved Acquirer, at Respondent’s expense, all Confidential Business Information related to the relevant Divestiture Product(s);
2. deliver such Confidential Business Information as follows:
a. in good faith;
VOLUME 142 Decision and Order b. as soon as practicable, avoiding any delays in transmission of the respective information; and c. in a manner that ensures its completeness and accuracy and that fully preserves its usefulness; 3. pending complete delivery of all such Confidential Business Information to the Commission-approved Acquirer, provide the Commission-approved Acquirer and the Interim Monitor (if any has been appointed) with access to all such Confidential Business Information and employees who possess or are able to locate such information for the purposes of identifying the books, records, and files directly related to the relevant Divestiture Product(s) that contain such Confidential Business Information and facilitating the delivery in a manner consistent with this Order; 4. not use, directly or indirectly, any such Confidential Business Information related to the research, Development, manufacturing, marketing, or sale of the relevant Divestiture Product(s) other than as necessary to comply with the following:
a. the requirements of this Order;
b. Respondent’s obligations to the Commissionapproved Acquirer under the terms of any Remedial Agreement related to relevant Divestiture Product(s); or c. applicable Law;
5. not disclose or convey any such Confidential Business Information, directly or indirectly, to any person except the Commission-approved Acquirer; and BARR PHARMACEUTICALS, INC. 1273 Decision and Order 6. not provide, disclose or otherwise make available, directly or indirectly, any such Confidential Business Information related to the marketing or sales of the relevant Divestiture Products to the employees associated with business related to those Retained Products that are approved by the FDA for the same or similar indications or purposes as the relevant Divestiture Products.
G. Respondent shall not enforce any agreement against a Third Party or the Commission-approved Acquirer to the extent that such agreement may limit or otherwise impair the ability of the Commission-approved Acquirer to acquire the Product Manufacturing Technology related to the relevant Divestiture Product(s) or related equipment from the Third Party. Such agreements include, but are not limited to, agreements with respect to the disclosure of Confidential Business Information related to such Product Manufacturing Technology.
H. Not later than ten (10) days after the Closing Date, Respondent shall grant a release to each Third Party that is subject to an agreement as described in Paragraph II.G. that allows the Third Party to provide the relevant Product Manufacturing Technology or related equipment to the Commission-approved Acquirer. Within five (5) days of the execution of each such release, Respondent shall provide a copy of the release to the Commission-approved Acquirer for the relevant assets.
I. Respondent shall:
1. for each Paragraph II Divestiture Product, for a period of at least twelve (12) months from the relevant Closing Date or upon the hiring of ten (10) Divestiture Product Core Employees by the relevant Commissionapproved Acquirer, whichever occurs earlier, provide VOLUME 142 Decision and Order the relevant Commission-approved Acquirer with the opportunity to enter into employment contracts with the Divestiture Product Core Employees related to the Paragraph II Divestiture Products and assets acquired by such Commission-approved Acquirer. Each of these periods is hereinafter referred to as the “Divestiture Product Employee Access Period(s)”; and 2. not later than the earlier of the following dates: (1) ten (10) days after notice by staff of the Commission to Respondent to provide the Product Employee Information; or (2) ten (10) days after the relevant Closing Date, provide the relevant Commissionapproved Acquirer or the relevant Proposed Acquirer with the Product Employee Information related to the relevant Divestiture Product Core Employees. Failure by Respondent to provide the Product Employee Information for any Divestiture Product Core Employee within the time provided herein shall extend the Divestiture Product Employee Access Period(s) with respect to that employee in an amount equal to the delay.
J. Respondent shall:
1. during the Divestiture Product Employee Access Period(s), not interfere with the hiring or employing by the relevant Commission-approved Acquirer of the Divestiture Product Core Employees related to the particular Divestiture Products and assets acquired by such Commission-approved Acquirer, and remove any impediments within the control of Respondent that may deter these employees from accepting employment with the relevant Commission-approved Acquirer, including, but not limited to, any noncompete or nondisclosure provision of employment with respect to a Divestiture Product or other contracts BARR PHARMACEUTICALS, INC. 1275 Decision and Order with Respondent or PLIVA (whichever party is relevant to such Divestiture Product) that would affect the ability or incentive of those individuals to be employed by the relevant Commission-approved Acquirer. In addition, Respondent shall not make any counteroffer to such a Divestiture Product Core Employee who has received a written offer of employment from the relevant Commission-approved Acquirer;
provided, however, that this Paragraph II.J.1 shall not prohibit Respondent or PLIVA from continuing to employ any Divestiture Product Core Employee during the Divestiture Product Employee Access Period (subject to the conditions of continued employment prescribed in this Order);
2. until the Closing Date, provide all Divestiture Product Core Employees with reasonable financial incentives to continue in their positions and to research, Develop, and manufacture the Divestiture Product(s) consistent with past practices and/or as may be necessary to preserve the marketability, viability and competitiveness of the Divestiture Product(s) and to ensure successful execution of the pre-Acquisition plans for such Divestiture Product(s). Such incentives shall include a continuation of all employee compensation and benefits offered by Respondent or PLIVA (whichever party is relevant to such Divestiture Product) until the Closing Date(s) for the divestiture of the assets related to the Divestiture Product(s) has occurred, including regularly scheduled raises, bonuses, and vesting of pension benefits (as permitted by Law);
provided, however, that nothing in this Order requires or shall be construed to require Respondent to terminate the VOLUME 142 Decision and Order employment of any employee or prevent Respondent from continuing to employ the Divestiture Product Core Employees (other than those conditions of continued employment prescribed in this Order) in connection with the Acquisition; and 3. for a period of one (1) year from the relevant Closing Date, not:
a. directly or indirectly, solicit or otherwise attempt to induce any employee of the Commissionapproved Acquirer with any amount of responsibility related to a Divestiture Product (“Divestiture Product Employee”) to terminate his or her employment relationship with the relevant Commission-approved Acquirer; or b. hire any Divestiture Product Employee; provided, however, Respondent may hire any former Divestiture Product Employee whose employment has been terminated by the relevant Commissionapproved Acquirer or who independently applies for employment with Respondent, as long as such employee was not solicited in violation of the nonsolicitation requirements contained herein; provided, however, Respondent may do the following: (1) advertise for employees in newspapers, trade publications or other media not targeted specifically at the Divestiture Product Employees; or (2) hire a Divestiture Product Employee who contacts Respondent on his or her own initiative without any direct or indirect solicitation or encouragement from Respondent.
K. Prior to the Closing Date, Respondent shall secure all consents and waivers from all Third Parties that are necessary to permit Respondent to divest the assets BARR PHARMACEUTICALS, INC. 1277 Decision and Order required to be divested pursuant to this Order to the relevant Commission-approved Acquirer(s), and/or to permit such Commission-approved Acquirer to continue the research, Development, manufacture, sale, marketing or distribution of the Paragraph II Divestiture Products; provided, however, Respondent may satisfy this requirement by certifying that the relevant Commissionapproved Acquirer has executed all such agreements directly with each of the relevant Third Parties. L. Respondent shall require, as a condition of continued employment post-divestiture of the assets required to be divested pursuant to this Order, that each Divestiture Product Core Employee retained by Respondent, the direct supervisor(s) of any such employee, and any other employee retained by Respondent and designated by the Interim Monitor (if applicable) sign a confidentiality agreement pursuant to which such employee shall be required to maintain all Confidential Business Information related to the Paragraph II Divestiture Products as strictly confidential, including the nondisclosure of such information to all other employees, executives or other personnel of Respondent (other than as necessary to comply with the requirements of this Order). M. Not later than thirty (30) days after the Effective Date, Respondent shall provide written notification of the restrictions on the use of the Confidential Business Information related to the Paragraph II Divestiture Products by Respondent’s personnel to all of Respondent’s employees who:
1. are or were directly involved in the research, Development, manufacturing, distribution, sale or marketing of each of the relevant Divestiture Products; VOLUME 142 Decision and Order 2. are directly involved in the research, Development, manufacturing, distribution, sale or marketing of Retained Products that are approved by the FDA for the same or similar indications as each of the relevant Divestiture Products prior to the Acquisition; and/or 3. may have Confidential Business Information related to the Divestiture Products.
Respondent shall give such notification by e-mail with return receipt requested or similar transmission, and keep a file of such receipts for one (1) year after the relevant Closing Date. Respondent shall provide a copy of such notification to the Commission-approved Acquirer. Respondent shall maintain complete records of all such agreements at Respondent’s corporate headquarters and shall provide an officer’s certification to the Commission stating that such acknowledgment program has been implemented and is being complied with. Respondent shall provide the Commission-approved Acquirer with copies of all certifications, notifications and reminders sent to Respondent’s personnel.
N. Upon reasonable notice and request by the Commissionapproved Acquirer(s), Respondent shall make available to the Commission-approved Acquirer(s), at no greater than Direct Cost (or, in each instance where: (1) an agreement to divest relevant assets is specifically referenced and attached to this Order, and (2) such agreement becomes a Remedial Agreement for a Divestiture Product, then at such cost as may be provided therein) such personnel, assistance and training as the Commission-approved Acquirer(s) might reasonably need to transfer the assets related to the Divestiture Product(s) and shall continue providing such personnel, assistance and training, at the request of the Commission-approved Acquirer(s), until the relevant Commission-approved Acquirer(s) (or the BARR PHARMACEUTICALS, INC. 1279 Decision and Order Designee(s) of such Commission-approved Acquirer(s)) is: (1) approved by the FDA to manufacture each of the relevant Divestiture Products, and (2) able to manufacture such Divestiture Products in commercial quantities, in a manner consistent with cGMP, independently of Respondent and PLIVA.
O. Pending divestiture of the assets required to be divested pursuant to Paragraphs II.A. and II.B. of this Order, Respondent shall take such actions as are necessary to maintain the full economic viability and marketability of the business associated with such assets, to minimize any risk of loss of competitive potential for such business, and to prevent the destruction, removal, wasting, deterioration, or impairment of any of these assets until after their respective transfer to the relevant Commission-approved Acquirer in a manner that ensures that there is no disruption, delay, or impairment of the regulatory approval processes related to such assets. Respondent shall not sell, transfer, encumber or otherwise impair such assets (other than in the manner prescribed in this Order) nor take any action that lessens the full economic viability, marketability, or competitiveness of the above-described businesses.
P. Respondent shall maintain manufacturing facilities necessary to manufacture the Trazodone Hydrochloride Product(s) and Triamterene and Hydrochlorothiazide Product(s) in finished form (suitable for sale to the ultimate consumer/patient) until the relevant Commissionapproved Acquirer (or the Designee of the Commissionapproved Acquirer) is: (1) approved by the FDA to manufacture each of the relevant Divestiture Products, and (2) able to manufacture such Divestiture Products in commercial quantities, in a manner consistent with cGMP, independently of Respondent and PLIVA; VOLUME 142 Decision and Order provided, however, the Commission may eliminate, or limit the duration of, Respondent’s obligation under this provision if the Commission determines that the relevant Commission-approved Acquirer is not using commercially reasonable efforts to secure the FDA approvals necessary to manufacture in commercial quantities each such Divestiture Product in finished form in a facility that is independent of Respondent and PLIVA and to enable itself to manufacture such quantities of each such Divestiture Product independently of Respondent and PLIVA.
Q. Respondent shall not join, file, prosecute or maintain any suit, in law or equity, against the relevant Commissionapproved Acquirer(s) or the Divestiture Product Releasee(s) for the research, Development, manufacture, use, import, export, distribution, or sale of the relevant Paragraph II Divestiture Product(s) under the following: 1. any Patent owned or licensed by Respondent or PLIVA as of the Effective Date that claims a method of making, using, or administering, or a composition of matter, relating to the respective Divestiture Product, or that claims a device relating to the use thereof; 2. any Patents owned or licensed at any time after the Effective Date by Respondent that claim any aspect of the research, Development, manufacture, use, import, export, distribution, or sale of the respective Divestiture Products, other than such Patents that claim inventions conceived by and reduced to practice after the Effective Date;
if such suit would have the potential to interfere with the relevant Commission-approved Acquirer’s freedom to practice the research, Development, manufacture, use, import, export, distribution, or sale of the relevant BARR PHARMACEUTICALS, INC. 1281 Decision and Order Paragraph II Divestiture Products. Respondent shall also covenant to the relevant Commission-approved Acquirer that as a condition of any assignment, transfer, or license to a Third Party of the above-described Patents, the Third Party shall agree to provide a covenant whereby the Third Party covenants not to sue the relevant Commissionapproved Acquirer or the related Divestiture Product Releasee(s) under such Patents, if the suit would have the potential to interfere with the relevant Commissionapproved Acquirer’s freedom to practice in the research, Development, manufacture, use, import, export, distribution, or sale of the relevant Paragraph II Divestiture Products.
Respondent shall include the above-described covenants in the Remedial Agreement(s) with the relevant Commission-approved Acquirer.
R. Respondent shall not, in the Geographic Territory: 1. use the Product Trademarks related to the Divestiture Products or any mark confusingly similar to such Product Trademarks, as a trademark, trade name, or service mark;
2. attempt to register such Product Trademarks; 3. attempt to register any mark confusingly similar to such Product Trademarks;
4. challenge or interfere with the Commission-approved Acquirer(s)’s use and registration of such Product Trademarks; or 5. challenge or interfere with the Commission-approved Acquirer(s)’s efforts to enforce its trademark registrations for and trademark rights in such Product Trademarks against Third Parties;
VOLUME 142 Decision and Order provided however, that nothing in this Order shall preclude Respondent from continuing to use those trademarks, tradenames, or service marks related to the Retained Products as of the Effective Date.
S. The purpose of the divestiture of either the Custodiol Product Assets or the ViaSpan Product Assets is: (1) to ensure the continued use of such assets in the research, Development, manufacture, distribution, sale and marketing of the Custodiol Product or the ViaSpan Products, respectively; (2) to create a viable and effective competitor in the relevant markets alleged in the Commission’s Complaint who is independent of the Respondent and PLIVA; and, (3) to remedy the lessening of competition resulting from the Acquisition as alleged in the Commission’s Complaint in a timely and sufficient manner.
T. The purpose of the divestiture of the Trazodone Hydrochloride Product Assets, and the Triamterene Product Assets is: (1) to ensure the continued use of such assets in the research, Development, manufacture, distribution, sale and marketing of the Trazodone Hydrochloride Products and the Triamterene Products, respectively; (2) to create a viable and effective competitor in the relevant markets alleged in the Complaint who is independent of Respondent and PLIVA; and, (3) to remedy the lessening of competition resulting from the Acquisition as alleged in the Commission’s Complaint in a timely and sufficient manner.
III.
IT IS FURTHER ORDERED that:
A. Respondent either:
BARR PHARMACEUTICALS, INC. 1283 Decision and Order 1. Not later than ten (10) days after the Effective Date, shall divest the Nimodipine (PLIVA) Product Assets (to the extent such assets are not already owned, controlled, or in the possession of Banner), absolutely and in good faith, to Banner pursuant to and in accordance with the Nimodipine (PLIVA) Product Divestiture Agreements (which agreements shall not vary or contradict, or be construed to vary or contradict, the terms of this Order, it being understood that nothing in this Order shall be construed to reduce any rights or benefits of Banner or to reduce any obligations of Respondent under such agreements), and such agreement, if it becomes the Remedial Agreement related to the Nimodipine (PLIVA) Products is incorporated by reference into this Order and made a part hereof;
provided however, that if Respondent has divested the Nimodipine (PLIVA) Product Assets to Banner prior to the date this Order becomes final, and if, at the time the Commission determines to make this Order final, the Commission notifies Respondent that the manner in which the divestiture was accomplished is not acceptable, the Commission may direct Respondent, or appoint a Divestiture Trustee, to effect such modifications to the manner of the divestiture to Banner (including, but not limited to, entering into additional agreements or arrangements) as the Commission may determine are necessary to satisfy the requirements of this Order; or 2. Not later than sixty (60) days from the Effective Date, shall divest the Nimodipine (Barr) Product Assets (to the extent that such assets are not already owned, controlled, or in the possession of Cardinal), absolutely and in good faith, at no minimum price, to Cardinal VOLUME 142 Decision and Order and only in a manner that receives the prior approval of the Commission.
B. Any Remedial Agreement related to the Paragraph III Divestiture Products shall be deemed incorporated into this Order, and any failure by Respondent to comply with any term of such Remedial Agreement shall constitute a failure to comply with this Order. Respondent shall include in each such Remedial Agreement a specific reference to this Order, and the remedial purpose thereof. C. Upon reasonable notice and request from the Commissionapproved Acquirer of assets pursuant to Paragraph III.A. (“Paragraph III.A. Commission-approved Acquirer”), Respondent shall provide, in a timely manner at no greater than Direct Cost, assistance and advice of knowledgeable employees of Respondent as such Commission-approved Acquirer might reasonably need to transfer the assets divested pursuant to Paragraph III.A., and shall continue providing such personnel, assistance and training, at the request of such Commission-approved Acquirer, until such assets are fully transferred to such Commission-approved Acquirer.
D. At the Paragraph III.A. Commission-approved Acquirer’s request, Respondent shall provide, in a timely manner, at no greater than Direct Cost or Supply Cost (whichever is relevant), such assistance and services as may be necessary for such Commission-approved Acquirer to obtain any approvals that were planned or pending prior to the Acquisition related to any Application or planned or pending Application related to the Paragraph III Divestiture Products.
E. After the Closing Date for the divestiture required pursuant to Paragraph III.A., Respondent shall not receive BARR PHARMACEUTICALS, INC. 1285 Decision and Order any payment or other compensation from the Paragraph III.A. Commission-approved Acquirer that is: 1. based on the actual amount of sales or profits of the Paragraph III Divestiture Products realized at any time after the Closing Date, or 2. due upon the realization of any aggregate amount of sales or profits of such Divestiture Products. F. Respondent shall:
1. submit to the Paragraph III.A. Commission-approved Acquirer, at Respondent’s expense, all Confidential Business Information related to the Paragraph III Divestiture Products;
2. deliver such Confidential Business Information as follows:
a. in good faith;
b. as soon as practicable, avoiding any delays in transmission of the respective information; and c. in a manner that ensures its completeness and accuracy and that fully preserves its usefulness; 3. pending complete delivery of all such Confidential Business Information to the Paragraph III.A. Commission-approved Acquirer, provide such Commission Approved Acquirer and the Interim Monitor (if any has been appointed) with access to all such Confidential Business Information and employees who possess or are able to locate such information for the purposes of identifying the books, records, and files directly related to the Paragraph III Divestiture Products that contain such Confidential Business VOLUME 142 Decision and Order Information and facilitating the delivery in a manner consistent with this Order;
4. not use, directly or indirectly, any such Confidential Business Information related to the research, Development, manufacturing, marketing, or sale of the Paragraph III Divestiture Products other than as necessary to comply with the following: a. the requirements of this Order;
b. Respondent’s obligations to the Paragraph III.A. Commission-approved Acquirer under the terms of any Remedial Agreement related to the Paragraph III Divestiture Products; or c. applicable Law;
5. not disclose or convey any such Confidential Business Information, directly or indirectly, to any person except the Paragraph III.A. Commission-approved Acquirer; and 6. not provide, disclose or otherwise make available, directly or indirectly, any such Confidential Business Information related to the marketing or sales related to the Paragraph III Divestiture Products to the employees associated with business related to those Retained Products that are approved by the FDA for the same or similar indications as the Paragraph III Divestiture Products.
G. Respondent shall not enforce any agreement against a Third Party or the Paragraph III.A. Commission-approved Acquirer to the extent that such agreement may limit or otherwise impair the ability of such Commission-approved Acquirer to acquire all Confidential Business Information BARR PHARMACEUTICALS, INC. 1287 Decision and Order related to the Paragraph III Divestiture Products. Not later than ten (10) days after the Closing Date, Respondent shall grant a release to each such Third Party that allows the Third Party to provide all such Confidential Business Information within the Third Party’s possession or control to such Commission-approved Acquirer. This includes, but is not limited to, such releases as may be necessary to permit the transfer to such Commission-approved Acquirer of any attorney work-product related to the Product Intellectual Property related to the Paragraph III Divestiture Products in the possession of Respondent’s outside counsel. Within five (5) days of the execution of each such release, Respondent shall provide a copy of the release to such Commission-approved Acquirer. H. Until all of Respondent’s rights to enforce restrictions on the use, disclosure, conveyance or provision of Confidential Business Information related to the Paragraph III Divestiture Products are fully assigned or conveyed to the Paragraph III.A. Commission-approved Acquirer, Respondent shall enforce any agreement against a Third Party to the extent that such agreement prevents or limits the ability of the Third Party to provide any such Confidential Business Information to any person or entity other than: (1) such Commission-approved Acquirer or (2) any Third Party Consultant authorized by such Commission-approved Acquirer to receive such information.
I. Respondent shall not join, file, prosecute or maintain any suit, in law or equity, against the Paragraph III.A. Commission-approved Acquirer(s) or the related Divestiture Product Releasee(s) for the research, Development, manufacture, use, import, export, distribution, or sale of the Paragraph III Divestiture Product(s) under the following:
VOLUME 142 Decision and Order 1. any Patent owned or licensed by Respondent or PLIVA as of the Effective Date that claims a method of making, using, or administering, or a composition of matter, relating to the respective Divestiture Product, or that claims a device relating to the use thereof; 2. any Patents owned or licensed at any time after the Effective Date by Respondent that claim any aspect of the research, Development, manufacture, use, import, export, distribution, or sale of the respective Divestiture Products, other than such Patents that claim inventions conceived by and reduced to practice after the Effective Date;
if such suit would have the potential to interfere with the Paragraph III.A. Commission-approved Acquirer’s freedom to practice the research, Development, manufacture, use, import, export, distribution, or sale of the Paragraph III Divestiture Products. Respondent shall also covenant to the Paragraph III.A. Commissionapproved Acquirer that as a condition of any assignment, transfer, or license to a Third Party of the above-described Patents, the Third Party shall agree to provide a covenant whereby the Third Party covenants not to sue the Paragraph III.A. Commission-approved Acquirer or the related Divestiture Product Releasee(s) under such Patents, if the suit would have the potential to interfere with the Paragraph III.A. Commission-approved Acquirer’s freedom to practice in the research, Development, manufacture, use, import, export, distribution, or sale of the Paragraph III Divestiture Products. Respondent shall include the above-described covenants in the Remedial Agreement(s) with the Paragraph III.A. Commission-approved Acquirer.
J. Pending divestiture of the assets required to be divested pursuant to Paragraph III.A. of this Order, Respondent BARR PHARMACEUTICALS, INC. 1289 Decision and Order shall take such actions as are necessary to maintain the full economic viability and marketability of the business associated with such assets, to minimize any risk of loss of competitive potential for such business, and to prevent the destruction, removal, wasting, deterioration, or impairment of any of these assets until after their respective transfer to the Paragraph III.A. Commission-approved Acquirer in a manner that ensures that there is no disruption, delay, or impairment of the regulatory approval processes related to such assets. Respondent shall not sell, transfer, encumber or otherwise impair such assets (other than in the manner prescribed in this Order) nor take any action that lessens the full economic viability, marketability, or competitiveness of the above-described businesses. K. The purpose of the divestiture required by Paragraph III is: (1) to ensure the continued use of such assets in the research, Development, manufacture, distribution, sale and marketing of the Paragraph III Divestiture Products; (2) to create a viable and effective competitor in the relevant markets alleged in the Complaint who is independent of Respondent and PLIVA; and, (3) to remedy the lessening of competition resulting from the Acquisition as alleged in the Commission’s Complaint in a timely and sufficient manner.
IV.
IT IS FURTHER ORDERED that:
A. If Respondent does not acquire fifty (50) percent or more of the voting securities of PLIVA on or before the Expiration Date, then Respondent shall divest, absolutely and in good faith, all of its Ownership Interest in PLIVA on the Croatian Stock Exchange, or such other securities exchange as the voting securities of PLIVA are registered to be traded on, within one (1) year of the Expiration Date. VOLUME 142 Decision and Order B. Pending the divestiture described in Paragraph IV.A., Respondent shall not, directly or indirectly: 1. exercise dominion or control over, or otherwise seek to influence, the management, direction or supervision of the business of PLIVA including, but not limited to, any participation in the formulation, determination or direction of any business decisions of PLIVA; 2. propose corporate action requiring the approval of PLIVA shareholders;
3. nominate, or any other way seek to or obtain representation on the Board of Directors of PLIVA; 4. have any of its directors, officers or employees serve simultaneously as an officer or director of PLIVA; 5. exercise any voting rights attached to any Ownership Interest in PLIVA, provided, however, that in any matter to be voted on by the shareholders of PLIVA, Respondent shall cast the votes related to its Ownership Interest in each class of PLIVA stock in an amount and manner proportional to the vote of all other votes cast by other PLIVA shareholders entitled to vote on such matter;
6. seek or obtain access to any confidential, proprietary, or other non-public information of PLIVA relating to the research, Development, manufacture, distribution, sale, and marketing of Products that are approved by the FDA for the same or similar indications as Products researched, Developed, manufactured, distributed, sold, or marketed by Respondent, provided however, that this shall not be construed to prohibit Respondent from seeking or obtaining discovery in BARR PHARMACEUTICALS, INC. 1291 Decision and Order any litigation or other proceeding to resolve a claim between Respondent and PLIVA in accordance with the procedures of the forum before which the dispute is pending. With respect to any such discovery, Respondent shall enter into a protective order to prevent any information from being used for any purpose other than providing legal representation or evidence as to the particular dispute and to prevent any information from being disclosed to any person(s) not necessary to the resolution of such dispute; or 7. take any action or omit to take any action in a manner that would be incompatible with the status of Respondent as a passive investor in PLIVA. The requirements of this Paragraph IV.B. shall continue and remain in effect so long as Respondent retains any Ownership Interest in PLIVA.
C. The purpose of the requirements of Paragraph IV is to ensure that, if the Acquisition does not occur, Respondent will not seek to exert, or exert influence upon, the business operations of PLIVA and shall divest itself of all of its Ownership Interest in PLIVA.
V.
IT IS FURTHER ORDERED that:
A. At any time after Respondent signs the Consent Agreement in this matter, the Commission may appoint a monitor (“Interim Monitor”) to assure that Respondent expeditiously complies with all of its obligations and performs all of its responsibilities as required by this Order, the Order to Maintain Assets and the Remedial Agreements.
VOLUME 142 Decision and Order B. The Commission shall select the Interim Monitor, subject to the consent of Respondent, which consent shall not be unreasonably withheld. If Respondent has not opposed, in writing, including the reasons for opposing, the selection of a proposed Interim Monitor within ten (10) days after notice by the staff of the Commission to Respondent of the identity of any proposed Interim Monitor, Respondent shall be deemed to have consented to the selection of the proposed Interim Monitor.
C. Not later than ten (10) days after the appointment of the Interim Monitor, Respondent shall execute an agreement that, subject to the prior approval of the Commission, confers on the Interim Monitor all the rights and powers necessary to permit the Interim Monitor to monitor Respondent’s compliance with the relevant requirements of the Order in a manner consistent with the purposes of the Order.
D. If an Interim Monitor is appointed, Respondent shall consent to the following terms and conditions regarding the powers, duties, authorities, and responsibilities of the Interim Monitor:
1. The Interim Monitor shall have the power and authority to monitor Respondent’s compliance with the divestiture and asset maintenance obligations and related requirements of the Order, and shall exercise such power and authority and carry out the duties and responsibilities of the Interim Monitor in a manner consistent with the purposes of the Order and in consultation with the Commission.
2. The Interim Monitor shall act in a fiduciary capacity for the benefit of the Commission.
3. The Interim Monitor shall serve until the later of: BARR PHARMACEUTICALS, INC. 1293 Decision and Order a. the completion by Respondent of:
(1) the divestiture of all Divestiture Assets in a manner that fully satisfies the requirements of this Order; and (2) notification by each of the relevant Commission-approved Acquirers to the Interim Monitor that such Commission-approved Acquirer is: (1) approved by the FDA to manufacture the Trazodone Hydrochloride Products and the Triamterene Products, and (2) able to manufacture such Divestiture Products in commercial quantities, in a manner consistent with cGMP, independently of Respondent and PLIVA; and b. the completion by Respondent of the last obligation under the Orders pertaining to the Interim Monitor’s service;
provided, however, that the Commission may extend or modify this period as may be necessary or appropriate to accomplish the purposes of the Orders. 4. Subject to any demonstrated legally recognized privilege, the Interim Monitor shall have full and complete access to Respondent’s personnel, books, documents, records kept in the normal course of business, facilities and technical information, and such other relevant information as the Interim Monitor may reasonably request, related to Respondent’s compliance with its obligations under the Order, including, but not limited to, its obligations related to the relevant assets. Respondent shall cooperate with any reasonable request of the Interim Monitor and VOLUME 142 Decision and Order shall take no action to interfere with or impede the Interim Monitor’s ability to monitor Respondent’s compliance with the Order.
5. The Interim Monitor shall serve, without bond or other security, at the expense of Respondent, on such reasonable and customary terms and conditions as the Commission may set. The Interim Monitor shall have authority to employ, at the expense of Respondent, such consultants, accountants, attorneys and other representatives and assistants as are reasonably necessary to carry out the Interim Monitor’s duties and responsibilities.
6. Respondent shall indemnify the Interim Monitor and hold the Interim Monitor harmless against any losses, claims, damages, liabilities, or expenses arising out of, or in connection with, the performance of the Interim Monitor’s duties, including all reasonable fees of counsel and other reasonable expenses incurred in connection with the preparations for, or defense of, any claim, whether or not resulting in any liability, except to the extent that such losses, claims, damages, liabilities, or expenses result from misfeasance, gross negligence, willful or wanton acts, or bad faith by the Interim Monitor.
7. Respondent shall report to the Interim Monitor in accordance with the requirements of this Order and/or as otherwise provided in any agreement approved by the Commission. The Interim Monitor shall evaluate the reports submitted to the Interim Monitor by Respondent, and any reports submitted by the Commission-approved Acquirer with respect to the performance of Respondent’s obligations under the Order or the Remedial Agreement. Within thirty (30) days from the date the Interim Monitor receives these BARR PHARMACEUTICALS, INC. 1295 Decision and Order reports, the Interim Monitor shall report in writing to the Commission concerning performance by Respondent of its obligations under the Order. 8. Respondent may require the Interim Monitor and each of the Interim Monitor’s consultants, accountants, attorneys and other representatives and assistants to sign a customary confidentiality agreement; provided, however, that such agreement shall not restrict the Interim Monitor from providing any information to the Commission.
E. The Commission may, among other things, require the Interim Monitor and each of the Interim Monitor’s consultants, accountants, attorneys and other representatives and assistants to sign an appropriate confidentiality agreement related to Commission materials and information received in connection with the performance of the Interim Monitor’s duties. F. If the Commission determines that the Interim Monitor has ceased to act or failed to act diligently, the Commission may appoint a substitute Interim Monitor in the same manner as provided in this Paragraph.
G. The Commission may on its own initiative, or at the request of the Interim Monitor, issue such additional orders or directions as may be necessary or appropriate to assure compliance with the requirements of the Order. H. The Interim Monitor appointed pursuant to this Order may be the same person appointed as a Divestiture Trustee pursuant to the relevant provisions of this Order. VOLUME 142 Decision and Order VI.
IT IS FURTHER ORDERED that:
A. If Respondent has not fully complied with the obligations to assign, grant, license, divest, transfer, deliver or otherwise convey relevant assets as required by this Order, the Commission may appoint a trustee (“Divestiture Trustee”) to assign, grant, license, divest, transfer, deliver or otherwise convey the assets required to be assigned, granted, licensed, divested, transferred, delivered or otherwise conveyed pursuant to each of the relevant Paragraphs in a manner that satisfies the requirements of each such Paragraph. In the event that the Commission or the Attorney General brings an action pursuant to § 5(l) of the Federal Trade Commission Act, 15 U.S.C. § 45(l), or any other statute enforced by the Commission, Respondent shall consent to the appointment of a Divestiture Trustee in such action to assign, grant, license, divest, transfer, deliver or otherwise convey the relevant assets. Neither the appointment of a Divestiture Trustee nor a decision not to appoint a Divestiture Trustee under this Paragraph shall preclude the Commission or the Attorney General from seeking civil penalties or any other relief available to it, including a court-appointed Divestiture Trustee, pursuant to § 5(l) of the Federal Trade Commission Act, or any other statute enforced by the Commission, for any failure by Respondent to comply with this Order. B. The Commission shall select the Divestiture Trustee, subject to the consent of Respondent, which consent shall not be unreasonably withheld. The Divestiture Trustee shall be a person with experience and expertise in acquisitions and divestitures. If Respondent has not opposed, in writing, including the reasons for opposing, the selection of any proposed Divestiture Trustee within ten (10) days after notice by the staff of the Commission to BARR PHARMACEUTICALS, INC. 1297 Decision and Order Respondent of the identity of any proposed Divestiture Trustee, Respondent shall be deemed to have consented to the selection of the proposed Divestiture Trustee. C. Not later than ten (10) days after the appointment of a Divestiture Trustee, Respondent shall execute a trust agreement that, subject to the prior approval of the Commission, transfers to the Divestiture Trustee all rights and powers necessary to permit the Divestiture Trustee to effect the divestiture required by this Order. D. If a Divestiture Trustee is appointed by the Commission or a court pursuant to this Paragraph, Respondent shall consent to the following terms and conditions regarding the Divestiture Trustee’s powers, duties, authority, and responsibilities:
1. Subject to the prior approval of the Commission, the Divestiture Trustee shall have the exclusive power and authority to assign, grant, license, divest, transfer, deliver or otherwise convey the assets that are required by this Order to be assigned, granted, licensed, divested, transferred, delivered or otherwise conveyed. 2. The Divestiture Trustee shall have one (1) year after the date the Commission approves the trust agreement described herein to accomplish the divestiture, which shall be subject to the prior approval of the Commission. If, however, at the end of the one (1) year period, the Divestiture Trustee has submitted a plan of divestiture or believes that the divestiture can be achieved within a reasonable time, the divestiture period may be extended by the Commission; provided, however, the Commission may extend the divestiture period only two (2) times.
VOLUME 142 Decision and Order 3. Subject to any demonstrated legally recognized privilege, the Divestiture Trustee shall have full and complete access to the personnel, books, records and facilities related to the relevant assets that are required to be assigned, granted, licensed, divested, delivered or otherwise conveyed by this Order and to any other relevant information, as the Divestiture Trustee may request. Respondent shall develop such financial or other information as the Divestiture Trustee may request and shall cooperate with the Divestiture Trustee. Respondent shall take no action to interfere with or impede the Divestiture Trustee’s accomplishment of the divestiture. Any delays in divestiture caused by Respondent shall extend the time for divestiture under this Paragraph in an amount equal to the delay, as determined by the Commission or, for a court-appointed Divestiture Trustee, by the court. 4. The Divestiture Trustee shall use commercially reasonable efforts to negotiate the most favorable price and terms available in each contract that is submitted to the Commission, subject to Respondent’s absolute and unconditional obligation to divest expeditiously and at no minimum price. The divestiture shall be made in the manner and to an acquirer as required by this Order; provided, however, if the Divestiture Trustee receives bona fide offers from more than one acquiring entity, and if the Commission determines to approve more than one such acquiring entity, the Divestiture Trustee shall divest to the acquiring entity selected by Respondent from among those approved by the Commission; and, provided further, however, that Respondent shall select such entity within five (5) days after receiving notification of the Commission’s approval.
BARR PHARMACEUTICALS, INC. 1299 Decision and Order 5. The Divestiture Trustee shall serve, without bond or other security, at the cost and expense of Respondent, on such reasonable and customary terms and conditions as the Commission or a court may set. The Divestiture Trustee shall have the authority to employ, at the cost and expense of Respondent, such consultants, accountants, attorneys, investment bankers, business brokers, appraisers, and other representatives and assistants as are necessary to carry out the Divestiture Trustee’s duties and responsibilities. The Divestiture Trustee shall account for all monies derived from the divestiture and all expenses incurred. After approval by the Commission of the account of the Divestiture Trustee, including fees for the Divestiture Trustee’s services, all remaining monies shall be paid at the direction of Respondent, and the Divestiture Trustee’s power shall be terminated. The compensation of the Divestiture Trustee shall be based at least in significant part on a commission arrangement contingent on the divestiture of all of the relevant assets that are required to be divested by this Order.
6. Respondent shall indemnify the Divestiture Trustee and hold the Divestiture Trustee harmless against any losses, claims, damages, liabilities, or expenses arising out of, or in connection with, the performance of the Divestiture Trustee’s duties, including all reasonable fees of counsel and other expenses incurred in connection with the preparation for, or defense of, any claim, whether or not resulting in any liability, except to the extent that such losses, claims, damages, liabilities, or expenses result from misfeasance, gross negligence, willful or wanton acts, or bad faith by the Divestiture Trustee.
VOLUME 142 Decision and Order 7. The Divestiture Trustee shall have no obligation or authority to operate or maintain the relevant assets required to be divested by this Order; provided, however, that the Divestiture Trustee appointed pursuant to this Paragraph may be the same Person appointed as Interim Monitor pursuant to the relevant provisions of the Order to Maintain Assets in this matter.
8. The Divestiture Trustee shall report in writing to Respondent and to the Commission every sixty (60) days concerning the Divestiture Trustee’s efforts to accomplish the divestiture.
9. Respondent may require the Divestiture Trustee and each of the Divestiture Trustee’s consultants, accountants, attorneys and other representatives and assistants to sign a customary confidentiality agreement; provided, however, such agreement shall not restrict the Divestiture Trustee from providing any information to the Commission.
E. If the Commission determines that a Divestiture Trustee has ceased to act or failed to act diligently, the Commission may appoint a substitute Divestiture Trustee in the same manner as provided in this Paragraph. F. The Commission or, in the case of a court-appointed Divestiture Trustee, the court, may on its own initiative or at the request of the Divestiture Trustee issue such additional orders or directions as may be necessary or appropriate to accomplish the divestiture required by this Order.
BARR PHARMACEUTICALS, INC. 1301 Decision and Order VII.
IT IS FURTHER ORDERED that:
Respondent shall assure that, in any instance wherein its counsel (including in-house counsel under appropriate confidentiality arrangements) either retains unredacted copies of documents or other materials provided to the Commissionapproved Acquirer(s) or accesses original documents (under circumstances where copies of documents are insufficient or otherwise unavailable) provided to the Commission-approved Acquirer(s), that Respondent’s counsel does so only in order to do the following:
A. comply with any Remedial Agreement, this Order, any Law (including, without limitation, any requirement to obtain regulatory licenses or approvals), any data retention requirement of any applicable Government Entity, or any taxation requirements; or B. defend against, respond to, or otherwise participate in any litigation, investigation, audit, process, subpoena or other proceeding relating to the divestiture or any other aspect of the Divestiture Products or assets and businesses associated with those Products; provided, however, that Respondent may disclose such information as necessary for the purposes set forth in this Paragraph pursuant to an appropriate confidentiality order, agreement or arrangement;
provided, however, that pursuant to this Paragraph VII, Respondent shall: (1) require those who view such unredacted documents or other materials to enter into confidentiality agreements with the relevant Commissionapproved Acquirer (but shall not be deemed to have violated this requirement if the relevant Commissionapproved Acquirer withholds such agreement VOLUME 142 Decision and Order unreasonably); and (2) use its best efforts to obtain a protective order to protect the confidentiality of such information during any adjudication.
VIII.
IT IS FURTHER ORDERED that:
A. Within five (5) days of the Acquisition, Respondent shall submit to the Commission a letter certifying the date on which the Acquisition occurred.
B. Within five (5) days of the Expiration Date, Respondent shall submit to the Commission a letter certifying the date on which the Expiration Date occurred. C. Within five (5) days of the completion of the divestiture described in Paragraph IV.A., Respondent shall submit to the Commission a letter certifying the date on which Respondent completed such divestiture and describing the manner in which Respondent completed such divestiture. D. Within thirty (30) days after the date this Order becomes final, and every sixty (60) days thereafter until Respondent has fully complied with the following: 1. Paragraphs II.A , II.B., III.A. (i.e., has assigned, licensed, divested, transferred, delivered or otherwise conveyed all relevant assets to the relevant Commission-approved Acquirer in a manner that fully satisfies the requirements of the Order); 2. Paragraph IV.A. (if the Acquisition does not occur); 3. Paragraphs II.F., II.H., II.J., II.K., and III.D.; and BARR PHARMACEUTICALS, INC. 1303 Decision and Order 4. and all of its responsibilities to render transitional services to the relevant Commission-approved Acquirer as provided by this Order and the Remedial Agreement(s), Respondent shall submit to the Commission a verified written report setting forth in detail the manner and form in which its intends to comply, is complying, and has complied with this Order. Respondent shall submit at the same time a copy of its report concerning compliance with this Order to the Interim Monitor, if any Interim Monitor has been appointed. Respondent shall include in its reports, among other things that are required from time to time, a full description of the efforts being made to comply with the relevant Paragraphs of the Order, including a full description of all substantive contacts or negotiations related to the divestiture of the relevant assets and the identity of all Persons contacted, including copies of all written communications to and from such Persons, all internal memoranda, and all reports and recommendations concerning completing the obligations. E. One (1) year after the date this Order becomes final, annually for the next nine years on the anniversary of the date this Order becomes final, and at other times as the Commission may require, Respondent shall file a verified written report with the Commission setting forth in detail the manner and form in which it has complied and is complying with the Order.
VOLUME 142 Decision and Order IX.
IT IS FURTHER ORDERED that Respondent shall notify the Commission at least thirty (30) days prior to any proposed (1) dissolution of such Respondent, (2) acquisition, merger or consolidation of Respondent, or (3) any other change in Respondent that may affect compliance obligations arising out of the Order, including, but not limited to, assignment and the creation or dissolution of subsidiaries. X.
IT IS FURTHER ORDERED that, for purposes of determining or securing compliance with this Order, and subject to any legally recognized privilege, and upon written request and upon five (5) days notice to Respondent made to its principal United States offices or its headquarters address, Respondent shall, without restraint or interference, permit any duly authorized representative of the Commission:
A. access, during business office hours of Respondent and in the presence of counsel, to all facilities and access to inspect and copy all books, ledgers, accounts, correspondence, memoranda and all other records and documents in the possession or under the control of Respondent related to compliance with this Order, which copying services shall be provided by Respondent at the request of the authorized representative(s) of the Commission; and B. to interview officers, directors, or employees of Respondent, who may have counsel present, regarding such matters.
BARR PHARMACEUTICALS, INC. 1305 Decision and Order XI.
IT IS FURTHER ORDERED that this Order shall terminate on November 22, 2016.
By the Commission.
PUBLIC APPENDIX I ORDER TO MAINTAIN ASSETSNON-PUBLIC APPENDIX II.A.
GENERIC DIVESTITURE PRODUCT AGREEMENTS [Redacted From the Public Record But Incorporated By Reference] NON-PUBLIC APPENDIX II.B.
AGREEMENTS RELATED TO THE CUSTODIOL PRODUCTS [Redacted From the Public Record But Incorporated By Reference] VOLUME 142 Analysis to Aid Public Comment NON-PUBLIC APPENDIX III.1 AGREEMENTS RELATED TO THE NIMODIPINE (PLIVA) PRODUCTS [Redacted From the Public Record But Incorporated By Reference] NON-PUBLIC APPENDIX III.2.
AGREEMENTS RELATED TO THE NIMODIPINE (BARR) PRODUCTS [Redacted From the Public Record But Incorporated By Reference] ANALYSIS OF CONSENT ORDER TO AID PUBLIC COMMENT I. Introduction The Federal Trade Commission (“Commission”) has accepted, subject to final approval, an Agreement Containing Consent Orders (“Consent Agreement”) from Barr Pharmaceuticals, Inc. (“Barr”), which is designed to remedy the anticompetitive effects of its proposed acquisition of Pliva d.d. (“Pliva”). Under the terms of the Consent Agreement, Barr is required to divest to Apotex, Inc. (“Apotex”) Barr’s generic trazodone and generic triamterene with hydrochlorothiazide (“triamterene/HCTZ”) BARR PHARMACEUTICALS, INC. 1307 Analysis to Aid Public Comment businesses. Further, the Consent Agreement requires Barr to return marketing rights to Pliva’s generic nimodipine product in development to its joint venture partner, Banner Pharmacaps, Inc. (“Banner”), or in the alternative, that Barr return marketing rights to its nimodipine product in development to its development partner, Cardinal Health, Inc. (“Cardinal”). Lastly, the Consent Agreement requires Barr to divest Pliva’s branded organ preservation solution, Custodiol, to New Custodiol LLC, a company formed for the purpose of marketing and selling Custodiol. The assets for each of the divestitures includes all of the relevant intellectual property, customer lists, research and development information, and regulatory materials. With these divestitures the competition that would otherwise be eliminated through the proposed acquisition of Pliva by Barr will be fully preserved.
The proposed Consent Agreement has been placed on the public record for thirty days for receipt of comments by interested persons. Comments received during this period will become part of the public record. After thirty days, the Commission will again review the proposed Consent Agreement and the comments received, and will decide whether it should withdraw from the proposed Consent Agreement, modify it, or make final the Decision and Order (“Order”).
Pursuant to an announcement dated June 27, 2006, Barr intends to acquire all of the outstanding shares of Pliva by cash tender offer for approximately $2.5 billion. Both parties manufacture and sell generic pharmaceuticals in the United States. The Commission’s Complaint alleges that the proposed acquisition, if consummated, would violate Section 7 of the Clayton Act, as amended, 15 U.S.C. § 18, and Section 5 of the FTC Act, as amended, 15 U.S.C. § 45, in the markets for the manufacture and sale of: (1) generic trazodone hydrochloride tablets; (2) generic triamterene/HCTZ tablets; (3) generic nimodipine soft-gel capsules; and (4) organ preservation solutions. The proposed Consent Agreement remedies the alleged VOLUME 142 Analysis to Aid Public Comment violations by replacing in each of these markets the lost competition that would result from the acquisition. II. The Products and Structure of the Markets Barr’s acquisition of Pliva would reduce the number of current or future competing generic suppliers in the following three pharmaceutical products: trazodone hydrochloride tablets, triamterene/HCTZ tablets and nimodipine soft-gel capsules. The number of generic suppliers has a direct and substantial effect on generic pricing, as each additional generic supplier can have a competitive impact on the market. Because there are (or will be) multiple generic equivalents for the three products at issue here, the branded versions do not (or will not) significantly constrain the generics’ pricing.
For each of the three generic products at issue here, Barr and Pliva currently are two of a small number of suppliers offering the product or are the only two future competitors. Trazodone hydrochloride is an antidepressant. The branded product, Desyrel, is manufactured and sold by Apothecon, Inc., and typically sells for fifty times the generic price. Thus, Desyrel does not have a significant effect on pricing for generic trazodone. Sales of generic trazodone were over $53 million in 2005. Currently, Barr, Pliva, Watson Pharmaceuticals, Inc. (“Watson”), Teva Pharmaceutical Industries Ltd. (“Teva”), and United Research Laboratories/Mutual Pharmaceutical Company (“URL/Mutual”) are the only active suppliers of generic trazodone in the United States, although not all five suppliers are capable of supplying all formulations. For instance, Barr and Pliva are two of only three suppliers of the 150 mg formulation. Because many customers prefer to purchase the 50 mg, 100 mg and 150 mg formulations of generic trazodone from one supplier, the competitive significance of the other two suppliers who do not sell these formulations is limited. Moreover, the acquisition would reduce the number of suppliers of generic trazodone from BARR PHARMACEUTICALS, INC. 1309 Analysis to Aid Public Comment five to four, and significantly increase Barr’s market share to over 64 percent in all formulations.
Triamterene/HCTZ is a combination product used to treat high blood pressure. The branded traimterene/HCTZ product, Maxzide, is manufactured and sold by Mylan Laboratories, Inc. (“Mylan”) and is priced more than five times higher than its generic equivalent. Maxzide does not have a significant effect on the pricing of generic triamterene/HCTZ, while the competition between generic producers has a direct and substantial effect on generic triamterene/HCTZ pricing. Currently, Barr, Pliva, Watson, Mylan and Sandoz, Inc. (“Sandoz”) are the only active suppliers of various formulations of generic triamterene/HCTZ tablets in the United States. Furthermore, there is evidence that several of these suppliers may have a more limited competitive significance in the market than Barr and Pliva. The proposed acquisition would reduce the number of suppliers from five to four, and would increase Barr’s market share to about 35 percent. Nimodipine is used to treat symptoms resulting from a ruptured blood vessel in the brain. The branded version of this product, Nimotop, is manufactured and sold by Bayer. Although the patent for the branded version of the drug has already expired, there are no generic suppliers of nimodipine on the market. Barr, in conjunction with Cardinal, plans to introduce generic nimodipine in the Fall of 2006. Pliva also has plans to introduce generic nimodipine with its partner, Banner in the same time frame. Pliva and Barr are the only firms in the process of entering this market. The acquisition would, therefore, eliminate future competition between Barr and Pliva and result in a monopoly in the generic nimodipine market.
Barr’s acquisition of Pliva would also have an impact in one additional market, organ preservation solutions. These solutions are used during the harvesting of donor organs to flush and preserve the viability of the donor organ prior to transplantation. The market for organ preservation solutions in the United States is VOLUME 142 Analysis to Aid Public Comment highly concentrated. Barr and Pliva have market shares of approximately 60 and 30 percent, respectively, in this $17 million market. The rest of the market is divided among several smaller, niche players. The acquisition would significantly increase concentration in this market with Barr achieving near monopoly share with approximately 90 percent of the organ preservation solution market.
III. Entry Entry into manufacture and sale of generic trazodone, generic triamterene/HCTZ, generic nimodipine, and organ preservation solutions would not be timely, likely, or sufficient in its magnitude, character, and scope to deter or counteract the anticompetitive effects of the acquisition. Developing and obtaining FDA approval for the manufacture and sale of each of the relevant products takes at least two years due to substantial regulatory, technological, and intellectual property barriers. In addition to regulatory barriers, penetrating the organ preservation solution market is further hindered by the reluctance of transplant surgeons to switch to a new organ preservation product. IV. Effects of the Acquisition The proposed acquisition would cause significant competitive harm to consumers in the U.S. markets for generic trazodone, generic triamterene/HCTZ, and organ preservation solutions by eliminating actual, direct, and substantial competition between Barr and Pliva, by increasing the likelihood that Barr will be able to unilaterally exercise market power, by increasing the likelihood and degree of coordinated interaction between the few remaining competitors, and by increasing the likelihood that consumers will pay higher prices. In these markets, the evidence shows that consumers have obtained lower prices due to the competitive rivalry that exists between market participants. The evidence also shows that as new rivals have entered the markets, consumers have obtained lower prices. The acquisition would also cause BARR PHARMACEUTICALS, INC. 1311 Analysis to Aid Public Comment significant competitive harm to consumers in the U.S. market for generic nimodipine by eliminating future competition between Barr and Pliva.
V. The Consent Agreement The proposed Consent Agreement preserves competition in the generic trazodone and triamterene/HCTZ markets by requiring that Barr divest all of the Barr assets for these two products to Apotex within ten days after the acquisition. The proposed Consent Agreement contains several provisions designed to ensure these divestitures are successful. Barr must provide various transitional services to enable Apotex to compete against Barr immediately following the divestiture. These services include providing Apotex with existing inventory of generic trazodone and triamterene/HCTZ, supplying Apotex with generic trazodone and triamterene/HCTZ until Apotex secures FDA approval to manufacture the products for itself in its own facility, and providing Apotex with all technical assistance necessary to obtain any FDA approvals. Apotex is a reputable generic manufacturer and is well-positioned to manufacture and market the acquired products and to compete effectively in those markets. In the United States, Apotex is roughly the tenth-largest generic pharmaceutical company with over 50 products. Moreover, the acquisition by Apotex does not present competitive problems in either the generic trazodone market or the generic triamterene/HCTZ market because it does not currently compete in those markets.
The proposed Consent Agreement preserves the actual and potential competition in the generic nimodipine market by requiring Barr to divest the Pliva nimodipine assets to Banner no later than ten days after the acquisition, or to divest its own nimodipine assets to Cardinal no later than sixty days after the acquisition. Banner and Cardinal are both reputable soft-gel capsule manufacturers and particularly well-positioned to manufacture and market generic nimodipine because they are VOLUME 142 Analysis to Aid Public Comment already manufacturing generic nimodipine soft-gel capsules pursuant to their respective joint ventures with Pliva and Barr. The proposed Consent Agreement preserves the competition in the organ preservation solution market by requiring Barr to divest the Pliva organ preservation solution business to New Custodiol LLC no later than ten days after the acquisition. The Custodiol product is currently manufactured by a third party, Dr. Franz Kohler Chemie Gmbh, who will continue to supply the product to new New Custodiol LLC. New Custodiol LLC is a company that was formed by Pliva’s current head of marketing for organ preservation solutions, Mr. Allen Weber, for the purpose of acquiring, marketing and selling Custodiol in the United States. New Custodiol LLC has obtained funding from venture capitalists sufficient to allow it to manufacture and sell Custodiol effectively. The combination of Mr. Allen Weber’s industry experience and venture capital backing makes New Custodiol LLC well positioned to acquire Custodiol and to restore the competition that would be lost if the proposed acquisition were to proceed unremedied. If the sale of Pliva’s Custodiol is not successful, the Consent Agreement requires that Barr divest its organ preservation solution, ViaSpan, to a Commissionapproved acquirer.
If the Commission determines that any of the divestitures or divestees are not acceptable, Barr must rescind the transaction(s) and divest the assets to Commission-approved buyer(s) notlater than six months from the date the Order becomes final. If Barr fails to divest within the six months, the Commission may appoint a trustee to divest the assets.
The proposed remedy also allows for the appointment of an Interim Trustee, experienced in obtaining regulatory approval and the manufacture of pharmaceuticals, to oversee the technology transfer and to assist the divestees in the event of difficulties. As part of the proposed remedy, Barr is required to execute an agreement conferring all rights and powers necessary for the BARR PHARMACEUTICALS, INC. 1313 Analysis to Aid Public Comment Interim Trustee to satisfy his responsibilities under the Order to assure successful divestitures. The Commission has appointed Mr. William Rahe to be the Interim Monitor and the divestees have consented to his selection. The monitor will ensure that the Commission remains informed about the status of the proposed divestitures and asset transfers.
The purpose of this analysis is to facilitate public comment on the proposed Consent Agreement, and it is not intended to constitute an official interpretation of the proposed Consent Agreement or to modify its terms in any way. VOLUME 142 Complaint