Valeant To Divest Paragon To Settle FTC Charges

(RTTNews) - the Federal Trade Commission said that Valeant Pharmaceuticals International Inc. (VRX, VRX.TO), parent of Bausch + Lomb, has agreed to divest Paragon Holdings I, Inc. to settle charges that its May 2015 acquisition of Paragon violated antitrust law. Prior to the acquisition, both Valeant and an independent Paragon produced polymer discs used to make rigid gas permeable, or "GP," contact lenses.

The FTC said that Valeant will sell Paragon in its entirety to a newly created entity, Paragon Companies LLC, headed by the former president of Paragon, Joe Sicari.

Under the settlement, Paragon Companies also will acquire the assets of Pelican Products LLC - a contact lens packaging company that Valeant acquired after its purchase of Paragon - that is the only producer of FDA-approved vials used for shipping some GP lenses.

According to the complaint,Valeant's acquisition of Paragon eliminated competition between Valeant and Paragon for the sale of FDA-approved buttons used for three types of GP lenses: orthokeratology lenses, worn to reshape the cornea; large-diameter scleral lenses, which cover the white of the eye and are used after eye surgery, for corneal transplants, and to treat eye disease; and general vision correction lenses.

The acquisition combined the two largest manufacturers of GP buttons, accounting for more than 70 percent of U.S. sales across all three button types. This allowed Valeant to exercise market power unilaterally in each button market by increasing prices, reducing volume discounts, decreasing innovation, and reducing product distribution options, according to the complaint.

Under the terms of the proposed consent order, within 10 days after the order becomes final, Valeant is required to divest Paragon in its entirety, including the Pelican assets.