FTC Announces Conditions on GSK and Novartis Joint Venture Agreement

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The US Federal Trade Commission will require Novartis AG to divest its nicotine replacement therapy patch business to continue the joint venture with GlaxoSmithKline.

The Federal Trade Commission (FTC) announced on Nov. 26, 2014 that it placed conditions upon the GlaxoSmithKline (GSK) and Novartis AG joint venture announced in April. FTC has required that Novartis AG divest Habitrol, its nicotine replacement therapy patch, and private-label patch business.

Under the agreement, GSK will be the majority shareholder with an equity interest of 63.5% in the new consumer healthcare company. However, the joint venture must meet the FTC requirements to preserve competition in the market for nicotine patches. GSK currently has its own nicotine replacement patch, Nicoderm CQ, a direct competitor of Habitrol.

“Potential competitors would find it difficult, expensive, and time-consuming to develop new patch products and secure FDA approval, reinforcing the substantial competitive concerns,” FTC wrote in a press release.


Source: FTC