CMA clears adherence packaging merger
The Competition and Markets Authority (CMA) has cleared Omnicell/MTS’s proposed acquisition of SurgiChem.
This confirms the CMA’s provisional decision which was published last month and has been made by a group of independent CMA panel members (see notes for editors).
Omnicell, Inc./MTS Medication Technologies, Inc. and SurgiChem Limited both supply adherence packaging and other related products. Adherence packaging is used to repackage a patient’s pharmaceutical medicine requirements, to make it easier for them to take the correct medicine and dose at the correct time. The packaging is sold to pharmacies who then supply it free to patients in the community and care homes.
In its final report, the CMA found that although the two parties compete for pharmacy customers who do not go out to tender for their adherence packaging requirements (non-tendering customers) in both the care home and domiciliary segments of the market, there will still be other suppliers to provide competition and choice. It also found that entry and expansion by other suppliers is relatively straightforward and could act as a further constraint on the merged parties. There is no loss of competition for those customers who do go out to tender for their adherence packaging requirements (three large pharmacy chains buy adherence packaging through tenders) because SurgiChem does not take part in these tenders.
The Office of Fair Trading (OFT) referred the case to the Competition Commission (CC) in March 2014 for a detailed phase 2 investigation following a phase 1 review, since which time the CMA has taken over the case (see notes for editors).
Notes for editors
The CMA is the UK’s primary competition and consumer authority. It is an independent non-ministerial government department with responsibility for carrying out investigations into mergers, markets and the regulated industries and enforcing competition and consumer law. From 1 April 2014 it took over the functions of the CC and the competition and certain consumer functions of the OFT, as amended by the Enterprise and Regulatory Reform Act 2013. For more information see the CMA’s homepage on GOV.UK.
All the CMA’s functions in phase 2 merger inquiries are performed by Inquiry Groups chosen from the CMA’s panel members. The appointed Inquiry Group are the decision makers on phase 2 inquiries.
The CMA’s panel members come from a variety of backgrounds, including economics, law, accountancy and/or business; the membership of an Inquiry Group usually reflects a mix of expertise and experience (including industry experience).