Sun Pharma-Ranbaxy deal: US FTC asks Ranbaxy to divest asset

After Competition Commission of India, US fair trade watchdog FTC has asked Ranbaxy to divest one generic product as a condition for clearing its USD 4 billion deal with Sun Pharma to address monopoly concerns.

Sun Pharma-Ranbaxy deal: US FTC asks Ranbaxy to divest asset

Washington: After Competition Commission of India, US fair trade watchdog FTC has asked Ranbaxy to divest one generic product as a condition for clearing its USD 4 billion deal with Sun Pharma to address monopoly concerns.

The merger deal, once consummated, would create India's largest and world's fifth-biggest drug maker.

To address monopoly concerns, the Federal Trade Commission (FTC) on Friday said Sun Pharmaceutical Industries and Ranbaxy Laboratories have agreed to divest the latter's interests in generic minocycline tablets.

Generic minocycline tablets are used to treat a wide array of bacterial infections, including pneumonia, acne, and urinary tract infections.

The latest development comes more than a month after its Indian counterpart CCI directed both companies to divest seven products as it found that the deal could hit competition in the Indian market.

According to FTC's complaint, the proposed merger would likely harm future competition by reducing the number of suppliers in the US markets for three dosage strengths (50 mg, 75 mg, and 100 mg) of generic minocycline tablets.

Ranbaxy is currently one of three suppliers of the products, while Sun is one of only a limited number of firms likely to sell generic minocycline tablets in the United States in near future.

Sun Pharma's entry would likely have resulted in significantly lowering prices for these drugs, it said.

Under the proposed settlement, Ranbaxy's generic minocycline capsule assets would be acquired by Torrent Pharmaceuticals that markets generic drugs in the US.

In addition, Sun and Ranbaxy must supply generic minocycline tablets and capsules to Torrent until the company establishes its own manufacturing infrastructure.

Sun Pharma, Ranbaxy and Torrent are leading pharmaceutical companies based in India.

FTC has appointed an interim monitor to ensure that Torrent receives the support it needs from Sun and Ranbaxy during the divestiture process.

"The proposed consent agreement effectively remedies the proposed acquisition's anti-competitive effects in relevant markets," FTC said.

"Pursuant to the consent agreement and the order, the parties are required to divest all of Ranbaxy's rights and assets to generic minocycline tablets to Torrent," it added.

Last December, CCI had ordered Ranbaxy to divest six products and Sun Pharma to sell one while giving its clearance to the mega deal.

The Indian watchdog had directed Sun Pharma to divest all products containing 'Tamsulosin + Tolterodine' which are, at present, marketed and supplied under brand name Tamlet.

Ranbaxy was asked to sell all products containing Leuprorelin which are marketed and supplied under brand name Eligard.

The company would also have to divest products such as Terlibax, Rosuvas EZ, Olanex F, Raciper L and Triolvance.

The merged entity would have operations in 65 nations, 47 manufacturing facilities across 5 continents, along with a global portfolio of speciality and generic products.

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