FTC Allows Ranbaxy-Sun Pharma Merger Divestiture Order

March 27, 2015

The FTC signed off on a divestiture order allowing Sun Pharma’s imminent $4 billion purchase of fellow Indian generics maker Ranbaxy to go forward as long as the companies relinquish rights to the antibiotic minocycline.

Under the order, announced Friday, Sun must transfer Ranbaxy’s rights to minocycline in 50-mg, 75-mg and 100-mg tablet strength to India-based Torrent Pharmaceuticals within 10 days of the merger’s close. Sun must also sell Torrent the assets for Ranbaxy’s minocycline capsules so that Torrent can gain regulatory approval of a new API supplier as quickly as Ranbaxy could have.

The hand-off was necessary, the FTC says, because Ranbaxy is one of just three generics makers, in addition to Par and Dr. Reddy’s, supplying minocycline tablets at the dosage strengths in question. Sun is also one of only a few generics makers with an ANDA on the therapy pending with the FDA, the commission says.

Had the merger gone through unchallenged, it likely would have limited future competition for manufacturing generic minocycline, driving up prices for the drug, the FTC says.  Sun and Ranbaxy must provide Torrent with minocycline in capsule and tablet forms until the drugmaker can begin production.

The FTC first announced Sun and Ranbaxy’s consent to the divestiture in January.

The deal — expected to close Wednesday — will create the fifth largest generic prescription drug company in the world. Hanging over the merger have been FDA findings of rampant GMP problems at Ranbaxy’s India plants (DID, March 3). — Bryan Koenig