2016 A Profile of Bio-pharma Consolidation Activity 57
J. Competition Restrictions
One consent order prohibited former sales employees involved in marketing one product from selling another until a certain date.197
For lack of a unifying theme, the remainder of the consent order requirements fell into the category of miscellaneous. One provided incentives for one party (the acquirer) to proceed with the development of the other party’s specific product.198 Another allowed acquisition except for rights to market or sell a specific product under an existing exclusive distribution agreement with a third party.199 There was also a restriction “from reporting an intra-company transfer price higher than the level set in the order . . . .”200 Subject to product approval, there was a further requirement in this consent order to “report its intra-company transfer price at the lowest of either the level set forth in the order or the lowest price” sold to any customer until the set date.201 Lastly, one required that the divestiture buyer “will be able to enter into employment contracts with key individuals who have experience relating to” the product.202
IV. IMPLICATIONS GOING FORWARD
This article has attempted to examine some of the drivers and impacts of bio-pharma consolidation, and identify and characterize requirements on the industry set forth by the FTC in select consent orders. Recognizing the inherent limitations of the methodology, the three FTC reports consulted for this task nonetheless shed some light on the legal assessments conducted on pre-merger notification submissions to the agency in the bio-pharma realm. Aside from divestiture, the FTC imposes a number of other detailed limitations and conditions on mergers and acquisitions tailored to each individual scenario.
197. See id. (“The order required Warner to end its co-promotion agreement with Forest . . . and prohibited former Warner sales employees involved in marketing Celexa from selling Zoloft until March 2001.”). 198. See id. at 47 (“The order requires Baxter to terminate its co-marketing agreement with Watson and provides incentives for Baxter to proceed with development of Wyeth’s iron gluconate product.”). 199. See id. at 54 (“The consent order permitted IVAX to acquire Zenith except for Zenith’s rights to market or sell verapamil under Zenith’s exclusive distribution agreement with Searle.”). 200. Id. at 63. 201. Id. 202. Id. at 58 (it was required of Allergan to divest the development and distribution rights, ensure confidential business information would not be obtained by Allergan, and that Ipsen would be able to enter into employment contracts with key individuals).