FTC imposes conditions for Boston Scientific buy of BTG

As a result of conditions imposed by the US Federal Trade Commission regarding Boston Scientific’s (NYSE: BSX) proposed $4.2 billion acquisition of UK-based BTG (LSE: BTG) announced last November, which would violate federal antitrust law, the US medical device maker has agreed to divest certain assets to Varian Medical Systems.

The FTC alleges that, as proposed, Boston Scientific’s acquisition of BTG would harm consumers in the US market for drug eluting beads, or DEBs, which are microscopic beads used to treat certain liver cancers. Interventional radiologists use DEBs, combined with chemotherapy drugs, in a procedure called transarterial chemoembolization.

Boston Scientific and BTG are the two largest suppliers of DEBs in the USA, according to the FTC complaint. The complaint also alleges that new competition in this market is unlikely to occur in a timely manner to deter the anticompetitive effects of the proposed acquisition because of the length of time required for product development, Food and Drug Administration approval, and market adoption. Eliminating the head-to-head competition between BSC and BTG in this highly concentrated market would allow the combined firm to exercise market power unilaterally, resulting in higher prices, reduced innovation, and less choice for consumers, according to the complaint.