Affected market: Asthma treatments
Full text of the decision (annex 1):
Undertakings in lieu of reference (annex 2):
Undertakings accepted decision
The OFT's decision on reference under section 33 given on 9 January
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
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