82 FR 46241 - Abbott Laboratories and Alere Inc.; Analysis To Aid Public Comment

FEDERAL TRADE COMMISSION

Federal Register Volume 82, Issue 191 (October 4, 2017)

Page Range		46241-46243
FR Document		2017-21290

The consent agreement in this matter settles alleged violations of federal law prohibiting unfair methods of competition. The attached Analysis to Aid Public Comment describes both the allegations in the complaint and the terms of the consent orders-- embodied in the consent agreement--that would settle these allegations.

Federal Register, Volume 82 Issue 191 (Wednesday, October 4, 2017)

[Federal Register Volume 82, Number 191 (Wednesday, October 4, 2017)]
[Notices]
[Pages 46241-46243]
From the Federal Register Online [www.thefederalregister.org]
[FR Doc No: 2017-21290]

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FEDERAL TRADE COMMISSION

[File No. 161 0084]

Abbott Laboratories and Alere Inc.; Analysis To Aid Public
Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement.

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SUMMARY: The consent agreement in this matter settles alleged
violations of federal law prohibiting unfair methods of competition.
The attached Analysis to Aid Public Comment describes both the
allegations in the complaint and the terms of the consent orders--
embodied in the consent agreement--that would settle these allegations.

DATES: Comments must be received on or before October 30, 2017.

ADDRESSES: Interested parties may file a comment online or on paper, by
following the instructions in the Request for Comment part of the
SUPPLEMENTARY INFORMATION section below. Write: ``In the Matter of
Abbott Laboratories and Alere Inc., File No. 161-0084'' on your
comment, and file your comment online at https://ftcpublic.commentworks.com/ftc/abbottalereconsent by following the
instructions on the web-based form. If you prefer to file your comment
on paper, write ``In the Matter of Abbott Laboratories and Alere Inc.,
File No. 161-0084'' on your comment and on the envelope, and mail your
comment to the following address: Federal Trade Commission, Office of
the Secretary, 600 Pennsylvania Avenue NW., Suite CC-5610 (Annex D),
Washington, DC 20580, or deliver your comment to the following address:
Federal Trade Commission, Office of the Secretary, Constitution Center,
400 7th Street SW., 5th Floor, Suite 5610 (Annex D), Washington, DC
20024.

FOR FURTHER INFORMATION CONTACT: Aylin M. Skroejer, (202-326-2459),
Bureau of Competition, 600 Pennsylvania Avenue NW., Washington, DC
20580.

SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal
Trade Commission Act, 15 U.S.C. 46(f), and FTC Rule 2.34, 16 CFR 2.34,
notice is hereby given that the above-captioned consent agreement
containing a consent order to cease and desist, having been filed with
and accepted, subject to final approval, by the Commission, has been
placed on the public record for a period of thirty (30) days. The
following Analysis to Aid Public Comment describes the terms of the
consent agreement, and the allegations in the complaint. An electronic
copy of the full text of the consent agreement package can be obtained
from the FTC Home Page (for September 28, 2017), on the World Wide Web,
at https://www.ftc.gov/news-events/commission-actions.
You can file a comment online or on paper. For the Commission to
consider your comment, we must receive it on or before October 30,
2017. Write ``In the Matter of Abbott Laboratories and Alere Inc., File
No. 161-0084'' on your comment. Your comment--including your name and
your state--will be placed on the public record of this proceeding,
including, to the extent practicable, on the public Commission Web
site, at https://www.ftc.gov/policy/public-comments.
Postal mail addressed to the Commission is subject to delay due to
heightened security screening. As a result, we encourage you to submit
your comments online. To make sure that the Commission considers your
online comment, you must file it at https://ftcpublic.commentworks.com/ftc/abbottalereconsent by following the instructions on the web-based
form. If this Notice appears at http://www.regulations.gov/#!home, you
also may file a comment through that Web site.
If you prefer to file your comment on paper, write ``In the Matter
of Abbott Laboratories and Alere Inc., File No. 161-0084'' on your
comment and on the envelope, and mail your comment to the following
address: Federal Trade Commission, Office of the Secretary, 600
Pennsylvania Avenue NW., Suite CC-5610 (Annex D), Washington, DC 20580,
or deliver your comment to the following address: Federal Trade
Commission, Office of the Secretary, Constitution Center, 400 7th
Street SW., 5th Floor, Suite 5610 (Annex D), Washington, DC 20024. If
possible, submit your paper comment to the Commission by courier or
overnight service.
Because your comment will be placed on the publicly accessible FTC
Web site at https://www.ftc.gov, you are solely responsible for making
sure that your comment does not include any sensitive or confidential
information. In particular, your comment should not include any
sensitive personal information, such as your or anyone else's Social
Security number; date of birth; driver's license number or other state
identification number, or foreign country equivalent; passport number;
financial account number; or credit or debit card number. You are also
solely responsible for making sure that your comment does not include
any sensitive health information, such as medical records or other
individually identifiable health information. In addition, your comment
should not include any ``trade secret or any commercial or financial
information which . . . is privileged or confidential''--as provided by
Section 6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2),
16 CFR 4.10(a)(2)--including in particular competitively sensitive
information such as costs, sales statistics, inventories, formulas,
patterns, devices, manufacturing processes, or customer names.

[[Page 46242]]

Comments containing material for which confidential treatment is
requested must be filed in paper form, must be clearly labeled
``Confidential,'' and must comply with FTC Rule 4.9(c). In particular,
the written request for confidential treatment that accompanies the
comment must include the factual and legal basis for the request, and
must identify the specific portions of the comment to be withheld from
the public record. See FTC Rule 4.9(c). Your comment will be kept
confidential only if the General Counsel grants your request in
accordance with the law and the public interest. Once your comment has
been posted on the public FTC Web site--as legally required by FTC Rule
4.9(b)--we cannot redact or remove your comment from the FTC Web site,
unless you submit a confidentiality request that meets the requirements
for such treatment under FTC Rule 4.9(c), and the General Counsel
grants that request.
Visit the FTC Web site at http://www.ftc.gov to read this Notice
and the news release describing it. The FTC Act and other laws that the
Commission administers permit the collection of public comments to
consider and use in this proceeding, as appropriate. The Commission
will consider all timely and responsive public comments that it
receives on or before October 30, 2017. For information on the
Commission's privacy policy, including routine uses permitted by the
Privacy Act, see https://www.ftc.gov/site-information/privacy-policy.

Analysis of Agreement Containing Consent Orders To Aid Public Comment

Introduction

The Federal Trade Commission (``Commission'') has accepted, subject
to final approval, an Agreement Containing Consent Orders (``Consent
Agreement'') from Abbott Laboratories (``Abbott'') and Alere Inc.
(``Alere'') designed to remedy the anticompetitive effects resulting
from Abbott's proposed acquisition of Alere. The proposed Decision and
Order (``Order'') contained in the Consent Agreement requires the
parties to divest all rights and assets related to Alere's point-of-
care blood gas testing business to Siemens Aktiengelsellschaft
(``Siemens''), and all rights and assets related to Alere's point-of-
care cardiac marker testing business to Quidel Corporation
(``Quidel'').
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 review the comments received and
decide whether it should withdraw, modify, or make the Consent
Agreement final.
Under the terms of the Amendment to Agreement and Plan of Merger
signed on April 13, 2017, which amends the Agreement and Plan of Merger
signed on January 30, 2016, Abbott will acquire Alere in a transaction
valued at approximately $8.3 billion, which includes Abbott's
assumption of $3.0 billion in debt (the ``Acquisition''). 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 Federal Trade Commission Act, as
amended, 15 U.S.C. 45, by substantially lessening competition in the
U.S. markets for point-of-care blood gas testing systems and point-of-
care cardiac marker testing systems. The proposed Consent Agreement
will remedy the alleged violations by preserving the competition that
otherwise would be lost in these markets as a result of the proposed
Acquisition.

The Parties

Abbott, headquartered in Abbott Park, Illinois, is a global
healthcare company with three business units in the United States:
Diagnostic, nutritional, and vascular. Its diagnostic testing division
provides an expansive portfolio of instruments, tests, software, and
training to hospitals, laboratories, blood banks, and physician
offices.
Alere, headquartered in Waltham, Massachusetts, is a global leader
in rapid diagnostic testing. Alere provides diagnostic equipment,
consumables, and patient self-management tools for cardiometabolic
disease, infectious disease, and toxicology.

The Relevant Products and Structure of the Markets

I. Point-of-Care Blood Gas Testing Systems

Point-of-care blood gas testing systems are small, portable medical
instruments that measure a patient's blood pH, oxygen, carbon dioxide,
and electrolyte levels to assess lung and kidney function, as well as
whether an acute patient requires oxygen or other urgent treatment.
They provide results in less than five minutes at a patient's bedside
or other acute care settings where fast turnaround time is critical,
and rely on single-use, disposable test cartridges. Abbott and Alere
offer the only handheld point-of-care blood gas testing devices, and
other firms offer portable point-of-care models that range up to ten
pounds in weight. Hospitals pay a substantial premium for the
convenience of point-of-care blood gas testing equipment over the
closest alternative, using larger benchtop analyzers that employ multi-
use packs of reagents and are typically located in a hospital
laboratory or other centralized location for analysis. The vast
majority of customers would not switch to benchtop blood gas testing
systems in response to a small but significant increase in the price of
point-of-care blood gas testing systems.
Abbott and Alere are each other's closest competitors and the only
significant suppliers in the U.S. market for point-of-care blood gas
testing systems, accounting for 82% and 15% of 2016 sales,
respectively. While IDEXX Laboratories, Inc. and LifeHealth LLC offer
single-use, portable (but not handheld) systems, they are more distant
competitors to Abbott and Alere and maintain fringe positions in the
market.

II. Point-of-Care Cardiac Marker Testing Systems

Point-of-care cardiac marker testing systems are small, portable
medical instruments that measure specific proteins released into the
blood to assess whether a patient experiencing chest pains is having a
myocardial infarction or congestive heart failure. They allow for quick
initial diagnoses at a patient's bedside, which is critical because the
time between a cardiac event and treatment increases the likelihood the
patient will suffer permanent loss of heart muscle. The convenience of
point-of-care cardiac marker testing systems differentiates them from
larger benchtop models that can only be located in a hospital
laboratory or some other central area of larger emergency departments.
A small but significant increase in the price of point-of-care cardiac
marker testing systems would not cause customers to switch to benchtop
cardiac marker testing systems.
Abbott and Alere are the only significant suppliers of point-of-
care cardiac marker testing systems, accounting for approximately 87%
and 13%, respectively, of the 2016 U.S. market. Abbott offers point-of-
care cardiac marker testing on a handheld analyzer, and Alere on a two-
pound portable analyzer. The next closest competitor to the parties is
Response Biomedical, which offers a more complex technology and
accounts for only a nominal share of the market.

[[Page 46243]]

The Relevant Geographic Market

The relevant geographic market for point-of-care blood gas testing
systems and point-of-care cardiac marker testing systems is the United
States. These products are medical devices regulated by the U.S. Food
and Drug Administration (``FDA''). Medical devices sold outside of the
United States, but not approved for sale in the United States, do not
provide viable competitive alternatives for U.S. consumers.

Competitive Effects of the Acquisition

The proposed Acquisition would likely result in significant
competitive harm to consumers in the markets for point-of-care blood
gas testing systems and point-of-care cardiac marker testing systems.
In each relevant market, customers are able to leverage Abbott and
Alere against each other to obtain better prices and improved products.
By eliminating this direct and substantial head-to-head competition,
the proposed Acquisition likely would allow the combined firm to
exercise market power unilaterally, resulting in higher prices, reduced
innovation, and less choice for consumers.

Entry Conditions

Entry in the relevant markets would not be timely, likely, or
sufficient in magnitude, character, and scope to deter or counteract
the anticompetitive effects of the proposed Acquisition. New entry
would require significant investment of time and money for product
research and development, regulatory approval by the FDA, and
establishment of a U.S. sales and service infrastructure. Such
development efforts are difficult, time-consuming, and expensive, and
often fail to result in a competitive product reaching the market.

The Consent Agreement

The Consent Agreement eliminates the competitive concerns raised by
the proposed Acquisition by requiring Alere to divest: (1) Its point-
of-care blood gas testing business, including its Ottawa, Canada
facilities, to Siemens; and (2) its point-of-care cardiac marker
testing business, including its San Diego, California facility, to
Quidel. Alere must divest all assets and rights to research, develop,
manufacture, market, and sell its point-of-care blood gas testing and
point-of-care cardiac marker testing product lines, including all
related intellectual property and other confidential business
information. Further, Siemens and Quidel intend to hire substantially
all of Alere's employees whose responsibilities primarily relate to the
research, development, manufacture, or sale of the relevant products.
The provisions of the Consent Agreement ensure that Siemens and Quidel
become independent, viable, and effective competitors in the respective
markets in order to maintain the competition that currently exists.
Siemens is a global conglomerate with a healthcare division that is
one of the world's largest suppliers of technology to the healthcare
industry and a leader in medical imaging and laboratory diagnostics.
Siemens currently supplies a benchtop blood gas testing system, and
Alere's handheld system will be highly complementary to Siemens'
portfolio in the United States. Siemens has the expertise, U.S. sales
infrastructure, and resources to restore the competition that otherwise
would have been lost pursuant to the proposed Acquisition.
Based in San Diego, California, Quidel develops, manufactures, and
markets point-of-care diagnostic testing solutions globally. The
company has expertise with immunoassay testing and currently focuses on
infectious diseases, women's and general health, and gastrointestinal
diseases. The acquisition of Alere's point-of-care cardiac marker
testing business will complement Quidel's portfolio of rapid diagnostic
testing solutions. Moreover, Quidel's chairman was co-inventor of
Alere's point-of-care cardiac marker testing system, providing Quidel
with additional understanding and background of the divestiture
business.
The parties must accomplish the divestitures no later than thirty
days after the consummation of the Proposed Acquisition. If the
Commission determines that either Siemens or Quidel is not an
acceptable acquirer, or that the manner of the divestitures is not
acceptable, the proposed Order requires the parties to unwind the sale
of rights to Siemens and/or Quidel and then divest the products to a
Commission-approved acquirer(s) within six months of the date the Order
becomes final.
The Commission has agreed to appoint a Monitor to ensure that
Abbott and Alere comply with all of their obligations pursuant to the
Consent Agreement and to keep the Commission informed about the status
of the transfer of the rights and assets to Siemens and Quidel. The
proposed Order further allows the Commission to appoint a trustee in
the event the parties fail to divest the products as required.
The purpose of this analysis is to facilitate public comment on the
Consent Agreement, and it is not intended to constitute an official
interpretation of the proposed Order or to modify its terms in any way.

By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 2017-21290 Filed 10-3-17; 8:45 am]
BILLING CODE 6750-01-P

Federal Register / Vol. 82, No. 191 / Wednesday, October 4, 2017 / Notices 46243

The Relevant Geographic Market development, manufacture, or sale of interpretation of the proposed Order or
The relevant geographic market for the relevant products. The provisions of to modify its terms in any way.
point-of-care blood gas testing systems the Consent Agreement ensure that By direction of the Commission.
and point-of-care cardiac marker testing Siemens and Quidel become Donald S. Clark,
systems is the United States. These independent, viable, and effective
Secretary.
products are medical devices regulated competitors in the respective markets in
[FR Doc. 2017–21290 Filed 10–3–17; 8:45 am]
by the U.S. Food and Drug order to maintain the competition that
currently exists. BILLING CODE 6750–01–P
Administration (‘‘FDA’’). Medical
devices sold outside of the United Siemens is a global conglomerate with
States, but not approved for sale in the a healthcare division that is one of the
FEDERAL TRADE COMMISSION
United States, do not provide viable world’s largest suppliers of technology
competitive alternatives for U.S. to the healthcare industry and a leader [File No. 162 3128]
consumers. in medical imaging and laboratory
diagnostics. Siemens currently supplies Moonlight Slumber, LLC; Analysis To
Competitive Effects of the Acquisition a benchtop blood gas testing system, Aid Public Comment
The proposed Acquisition would and Alere’s handheld system will be AGENCY: Federal Trade Commission.
likely result in significant competitive highly complementary to Siemens’
ACTION: Proposed consent agreement.
harm to consumers in the markets for portfolio in the United States. Siemens
point-of-care blood gas testing systems has the expertise, U.S. sales SUMMARY: The consent agreement in this
and point-of-care cardiac marker testing infrastructure, and resources to restore matter settles alleged violations of
systems. In each relevant market, the competition that otherwise would federal law prohibiting unfair or
customers are able to leverage Abbott have been lost pursuant to the proposed deceptive acts or practices. The attached
and Alere against each other to obtain Acquisition. Analysis to Aid Public Comment
better prices and improved products. By Based in San Diego, California, Quidel describes both the allegations in the
eliminating this direct and substantial develops, manufactures, and markets complaint and the terms of the consent
head-to-head competition, the proposed point-of-care diagnostic testing order—embodied in the consent
Acquisition likely would allow the solutions globally. The company has agreement—that would settle these
combined firm to exercise market power expertise with immunoassay testing and allegations.
unilaterally, resulting in higher prices, currently focuses on infectious diseases,
reduced innovation, and less choice for women’s and general health, and DATES: Comments must be received on
consumers. gastrointestinal diseases. The or before October 30, 2017.
acquisition of Alere’s point-of-care ADDRESSES: Interested parties may file a
Entry Conditions
cardiac marker testing business will comment online or on paper, by
Entry in the relevant markets would complement Quidel’s portfolio of rapid following the instructions in the
not be timely, likely, or sufficient in diagnostic testing solutions. Moreover, Request for Comment part of the
magnitude, character, and scope to deter Quidel’s chairman was co-inventor of SUPPLEMENTARY INFORMATION section
or counteract the anticompetitive effects Alere’s point-of-care cardiac marker below. Write: ‘‘In the Matter of
of the proposed Acquisition. New entry Moonlight Slumber, LLC, File No.
testing system, providing Quidel with
would require significant investment of 1623128’’ on your comment, and file
additional understanding and
time and money for product research your comment online at https://
background of the divestiture business.
and development, regulatory approval ftcpublic.commentworks.com/ftc/
The parties must accomplish the
by the FDA, and establishment of a U.S. moonlightslumberconsent by following
divestitures no later than thirty days
sales and service infrastructure. Such the instructions on the web-based form.
development efforts are difficult, time- after the consummation of the Proposed
Acquisition. If the Commission If you prefer to file your comment on
consuming, and expensive, and often paper, write ‘‘In the Matter of Moonlight
fail to result in a competitive product determines that either Siemens or
Quidel is not an acceptable acquirer, or Slumber, LLC, File No. 1623128’’ on
reaching the market. your comment and on the envelope, and
that the manner of the divestitures is not
The Consent Agreement acceptable, the proposed Order requires mail your comment to the following
the parties to unwind the sale of rights address: Federal Trade Commission,
The Consent Agreement eliminates
to Siemens and/or Quidel and then Office of the Secretary, 600
the competitive concerns raised by the
divest the products to a Commission- Pennsylvania Avenue NW., Suite CC–
proposed Acquisition by requiring Alere
approved acquirer(s) within six months 5610 (Annex D), Washington, DC 20580,
to divest: (1) Its point-of-care blood gas
of the date the Order becomes final. or deliver your comment to the
testing business, including its Ottawa,
The Commission has agreed to following address: Federal Trade
Canada facilities, to Siemens; and (2) its
appoint a Monitor to ensure that Abbott Commission, Office of the Secretary,
point-of-care cardiac marker testing
business, including its San Diego, and Alere comply with all of their Constitution Center, 400 7th Street SW.,
California facility, to Quidel. Alere must obligations pursuant to the Consent 5th Floor, Suite 5610 (Annex D),
divest all assets and rights to research, Agreement and to keep the Commission Washington, DC 20024.
develop, manufacture, market, and sell informed about the status of the transfer FOR FURTHER INFORMATION CONTACT:
its point-of-care blood gas testing and of the rights and assets to Siemens and Amanda Kostner (202–326–2880) and
point-of-care cardiac marker testing Quidel. The proposed Order further Jock Chung (202–326–2984), Bureau of
sradovich on DSK3GMQ082PROD with NOTICES

product lines, including all related allows the Commission to appoint a Consumer Protection, 600 Pennsylvania
intellectual property and other trustee in the event the parties fail to Avenue NW., Washington, DC 20580.
confidential business information. divest the products as required. SUPPLEMENTARY INFORMATION: Pursuant
Further, Siemens and Quidel intend to The purpose of this analysis is to to Section 6(f) of the Federal Trade
hire substantially all of Alere’s facilitate public comment on the Commission Act, 15 U.S.C. 46(f), and
employees whose responsibilities Consent Agreement, and it is not FTC Rule 2.34, 16 CFR 2.34, notice is
primarily relate to the research, intended to constitute an official hereby given that the above-captioned

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Document Created: 2018-10-25 09:54:21
Document Modified: 2018-10-25 09:54:21

Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Notices
Action		Proposed consent agreement.
Dates		Comments must be received on or before October 30, 2017.
Contact		Aylin M. Skroejer, (202-326-2459), Bureau of Competition, 600 Pennsylvania Avenue NW., Washington, DC 20580.
FR Citation		82 FR 46241