Valeant Pharmaceuticals International, Inc., parent of Bausch + Lomb, has agreed to divest Paragon Holdings I, Inc. to settle charges that its May 2015 acquisition of Paragon violated Section 7 of the Clayton Act and Section 5 of the Federal Trade Commission Act. Prior to the acquisition, both Valeant and an independent Paragon produced polymer discs used to make GP contact lenses.
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, large-diameter scleral lenses, 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. Further details about the consent agreement are set forth in the analysis to aid public comment for this matter.
The agreement will be subject to public comment through Dec. 7, 2016, after which the Commission will decide whether to make the proposed consent order final.