US FTC approves final order preserving in nicotine patches market competition

Following a public comment period, the USA’s Federal Trade Commission has approved a final order settling charges that Swiss pharma major Novartis’ (NOVN: VX) consumer health care products joint venture with UK peer GlaxoSmithKline (LSE: GSK) would likely be anticompetitive.

Under the order, first announced in November, Novartis agreed to divest Habitrol, its branded nicotine replacement therapy patch, as well as its private-label patch business. Novartis will divest Habitrol, as well as its private-label patch business, to India-based Dr Reddy’s Laboratories (NYSE: RDY).

According to the complaint, Novartis and GSK are the only companies that market branded nicotine patches in the USA, and two of only three companies that supply private label patches to retailers. Without the divestiture, Novartis’s ownership of both Habitrol and a substantial interest in the joint venture that sells GSK’s nicotine patches would have substantially reduced competition and led to higher prices for Habitrol and Novartis’s private-label patches.