Washington, DC - Global medical technology company Medtronic, Inc. has agreed to divest the drug-coated balloon catheter business of Ireland-based medical products company Covidien plc, in order to settle Federal Trade Commission charges that its $42.9 billion acquisition of Covidien would likely be anticompetitive. Under the FTC’s proposed settlement, Medtronic will sell the drug-coated balloon catheter business to a Colorado-based medical device company, The Spectranetics Corporation.
According to the FTC’s complaint both Medtronic and Covidien are developing drug-coated balloon catheters to compete with C.R. Bard, Inc., which currently is the only company that supplies these products, used to treat peripheral artery disease, in the U.S. market. Medtronic and Covidien are the only companies with products in clinical trials in the Food and Drug Administration’s approval process, which makes it unlikely that other competitors could enter the market in time to counteract the effects of the merger, the FTC alleges.
Under the proposed consent order, an interim monitor will supervise Medtronic and Covidien to oversee the transfer of rights and assets related to Covidien’s drug-coated balloon catheter business to Spectranetics. According to the FTC’s analysis to aid public comment, Spectranetics currently manufactures and markets a range of devices to treat peripheral and coronary arterial disease, and has the industry and regulatory experience to obtain FDA approval for the product to enter the U.S. market as a viable competitor.
The proposed transaction was reviewed by antitrust enforcement agencies around the world, as well as by the Commission. FTC staff cooperated closely with antitrust agencies in Canada, China, the European Union, Japan, and Mexico.
The Commission vote to accept the proposed consent order for public comment was 5-0. The proposed settlement is part of the Commission’s ongoing effort to protect U.S. consumers from higher healthcare-related costs.