An American federal trade regulator on Saturday imposed conditions on Sun Pharmaceuticals' acquisition of Ranbaxy on the grounds that the $4 billion proposed deal would likely be anti-competitive.
The Federal Trade Commission (FTC) said pharmaceutical companies Sun Pharmaceutical Industries and Ranbaxy Laboratories have agreed to divest the latter's interests in generic minocycline tablets in order to settle charges that Sun's proposed acquisition of Ranbaxy would likely be anti-competitive.
Torrent Pharmaceuticals, a global drug company based in India that markets generic drugs in the United States, will acquire the divested assets, the FTC said.
Generic minocycline tablets are used to treat a wide array of bacterial infections, including pneumonia, acne, and urinary tract infections.
According to the 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 the near future.
Sun's entry would likely have resulted in significantly lowering prices for these drugs, it said.
Under the proposed settlement, Sun and Ranbaxy must also sell Ranbaxy's generic minocycline capsule assets to Torrent, to enable Torrent to achieve regulatory approval for a change in ingredient suppliers for its minocycline tablets as quickly as Ranbaxy would have been able to do in the absence of the deal.
In addition, Sun and Ranbaxy must supply generic minocycline tablets and capsules to Torrent until the company establishes its own manufacturing infrastructure.
The FTC has appointed an interim monitor to ensure that Torrent receives the support it needs from Sun and Ranbaxy during the divestiture process.