Affected market: Asthma treatments
Full text of the decision (annex 1): ivax.pdf
Undertakings in lieu of reference (annex 2): ivaxannex2.pdf
Undertakings accepted decision
The OFT's decision on reference under section 33 given on 9 January 2004
IVAX International GmbH (IVAX) manufactures and supplies pharmaceutical products including products for treating asthma.
3M Company (3M) also manufactures and supplies pharmaceutical products including those for the treatment of asthma.
On 1 October 2003 IVAX acquired 3M's distribution business for certain asthma treatments operating in the UK, Ireland, Germany, France, the Netherlands, Norway, Sweden, Finland and Denmark.
As a result of this transaction, the distribution businesses of IVAX and 3M for asthma treatments have ceased to be distinct. The parties overlap in the supply of salbutamol sulfate (salbutamol) and beclomethasone dipropionate (BDP) inhalers in the UK and the share of supply test in section 23 of the Enterprise Act 2002 (the Act) is met. The OFT believes that it is or may be the case that a relevant merger situation has been created for the purposes of section 22(1)(a) of the Act.
By way of a decision of 20 October 2003 the OFT announced that, on the evidence available to it, the OFT believes that it is or may be the case that the merger has or may be expected to result in a substantial lessening of competition in the UK market for the supply of salbutamol HFA breath actuated inhalers (the Decision). For the reasons set out in the Decision, as a result of the merger, IVAX has a monopoly in the supply of salbutamol HFA breath actuated inhalers. A copy of the Decision is attached as Annex 1 to this decision.
The Decision states that the OFT believes that it is or may be the case that the creation of the relevant merger situation has resulted or may be expected to result in a substantial lessening of competition within a market or markets in the United Kingdom for goods and services. On this basis, the OFT decided that the merger would be referred to the Competition Commission unless IVAX gave suitable undertakings pursuant to section 73 of the Enterprise Act to remedy the competition concern arising as a result of the merger, namely the ability of IVAX to increase the price of salbutamol HFA breath actuated inhalers.
IVAX offered to give undertakings not to increase the price of its salbutamol (HFA) breath actuated inhalers until an effective substitute salbutamol (HFA) breath actuated inhaler, not manufactured or distributed by IVAX, is available in the UK.
On 27 November 2003, the OFT published the proposed undertakings inviting interested parties to give their views on them to the OFT. The OFT did not receive any responses which suggested that the proposed undertakings were not appropriate to remedy, mitigate or prevent the competition concern identified.
The merger would be referred to the Competition Commission if IVAX failed to give suitable undertakings pursuant to section 73 of the Act to address the competition concern outlined above. The OFT has decided to accept the proposed undertakings in lieu of reference as they would address that competition concern.
This merger will therefore not be referred to the Competition Commission and the undertakings which have been signed by IVAX, the text of which are attached as Annex 2 to this decision, will come into effect from this date.