Novartis’ Acquisition of Alcon Gains FTC Approval with Eye Care Drug Divestitures

This posting was written by Jeffrey May, Editor of CCH Trade Regulation Reporter.

Novartis AG has agreed to sell an injectable eye care drug used in cataract surgery as part of a settlement resolving FTC charges that Novartis’s proposed acquisition of Alcon, Inc., would have created a monopoly in the market for injectable miotics.

Novartis and Alcon are the only two U.S. providers of the class of drugs known as injectable miotics.

Injectable miotics are a class of prescription drugs used to induce miosis, or constriction of the pupil. They are used during cataract surgery to shrink the pupil, which helps surgeons determine whether a rupture has occurred in the eye.

Under the terms of a proposed FTC consent order announced today, Novartis has agreed to sell its drug Miochol-E to Bausch & Lomb, Inc. The only other miotics product in the market is Miostat, which is owned by Alcon.

Currently, Swiss-based Novartis owns 25 percent of Alcon, and Swiss-based Nestle holds the controlling interest in Alcon. In January 2010, Novartis proposed to acquire shares that represented approximately 52 percent of the outstanding stock of Alcon for approximately $28.1 billion.

Novartis has reported that closing of its acquisition of 77 percent majority ownership of Alcon should be completed late in the third quarter or in the fourth quarter of 2010.

International Cooperation

The FTC said in an August 16 statement that it cooperated with enforcement counterparts in Australia, Canada, Mexico, and the European Commission (EC) in reviewing the transaction.

Novartis has agreed to a series of divestitures to resolve the Canada Competition Bureau’s concerns over its proposed acquisition of Alcon, according to an August 9 Competition Bureau announcement.

In addition to selling assets and associated licences related to the sale of Miochol-E in Canada, Novartis agreed to divest Solocare Aqua—a multi-purpose contact lens cleaner and disinfecting solution—and Zaditor—an ophthalmic anti-allergy agent.

In Europe, Novartis also agreed to divest several products in the ophthalmological pharmaceutical and consumer vision care areas. The EC’s investigation examined a large number of ophthalmological pharmaceutical markets and consumer vision care markets across Europe.

The EC said in an August 9 announcement that the markets in question were: ophthalmological anti-infective, antiinflammatory/anti-infective combinations, anti-allergics, decongestants, antiseptics, mydriatics and cycloplegics, diagnostic agents, non steroidal anti-inflammatories, injectable miotics, anti-glaucoma products, artificial tears, and multipurpose solutions for contact lenses.

Depending on the product in question, competition concerns arose in either a few or a larger number of EC member states.

The FTC complaint and proposed consent order, In the Matter of Novartis AG, FTC Dkt. C-4296, are available here on the FTC website. Further details will appear in CCH Trade Regulation Reporter.