Watson Receives Clearance for Actavis Acquisition

Watson Pharmaceuticals has received clearance from the Federal Trade Commission (FTC) for its acquisition of generic drug manufacturer Actavis. The $5.6 billion deal was first announced in April 2012, and will result in Watson becoming the third largest global generic-drug company. 

The FTC identified 21 drugs either currently marketed or under development for which competition would be reduced as a result of the merger. The FTC’s consent order requires Watson or Actavis to sell assets related to 14 drugs to Par Pharmaceuticals. Watson has indicated in a press release that Par will acquire the following products:

• Watson's morphine sulfate extended release capsules

• Actavis' nifedipine extended release tablets

• Actavis' metoclopramide hydrochloride tablets

• Actavis' fentanyl transdermal film

• Actavis' diltiazem hydrochloride extended release capsules

• Watson's pending application for adapalene/benzoyl peroxide gel

• Watson's pending application for oxymorphone hydrochloride ER tablets

• Watson's pending application for amphetamine salts ER tablets

• Actavis' pending application for rivastigmine patch

• Actavis' pending application for glipizide extended release tablets

• Actavis' pending application for varenicline tartrate tablets

• Actavis' pending application for oxycodone hydrochloride extended release tablets

• Actavis' pending application for ursodiol tablets

Sandoz, the generic pharmaceuticals division of Novartis, will acquire the following four products:

• Actavis' bupropion hydrochloride 150 mg. extended release tablets

• Actavis' lorazepam tablets

• Actavis' diltiazem hydrochloride extended release capsules

• Watson's pending application for dextromethorphan hydrobromide/quinidine sulfate

The FTC expects that Sandoz and Par will be able to replicate the competition that otherwise would have been lost through the acquisition. For the remaining three drugs, different steps have been taken to address the competition concerns. To remedy the FTC’s concerns related to one drug product, the combined firm is required to end Actavis’s existing development and manufacturing agreement with Pfizer and transfer the manufacturing rights back to Pfizer. For two other drugs, Watson and Actavis must relinquish the marketing rights to another firm.

According to the FTC press release, some products being divested have been identified by FDA as being in short supply. The FTC evaluated whether the proposed transaction would exacerbate any of those shortages, and concluded that the manufacture of those products would not likely be altered in a way that could affect their continued availability.