On Tuesday, the Federal Trade Commission (FTC) issued an order requiring medical device company Medtronic, Inc. to divest Fiagon, a subsidiary of Intersect ENT, Inc., as part of its proposed acquisition of Intersect ENT.
According to the FTC’s press release, Medtronic is a global medical device company headquartered in Minnesota that is a dominant provider of ear, nose and throat navigation systems and balloon sinus dilation products. Additionally, the press release states that Intersect ENT is a California-based medical device company that focuses on devices for ear, nose and throat procedures. Furthermore, the press release states that Intersect ENT’s subsidiary, Fiagon, is a new competitor of Medtronic in the U.S ENT navigation systems and balloon sinus dilation industry.
In a press release, the FTC states that the action was taken to protect patients who rely on medical instruments used in sinus procedures and to combat the rising healthcare costs. The order is intended to prevent a concentration in the ear, nose and throat market, increase competition and ultimately prevent harm to patients. The press release argues that the market is already heavily concentrated, and the FTC states that it is concerned “that the deal would otherwise lead to higher prices and reduced innovation in this important medical care market.”
The order requires Medtronic and Intersect ENT to divest the entire Fiagon business to Hemostasis, LLC no later than ten days after Medtronic acquires Intersect ENT. Additionally, the order requires Medtronic and Intersect ENT to receive prior approval from the FTC before acquiring ENT navigation systems and balloon sinus dilation assets for ten years to prevent future attempts to consolidate the market.
Furthermore, the buyer of Fiagon, Hemostasis must also obtain prior approval before transferring any of the Fiagon assets to any buyer for three years and seven years for any buyer that manufactures and sells ear, nose and throat navigation systems or balloon sinus dilation products.
The press release states that the FTC voted 4-0 to issue the complaint and accept the proposed Consent Order for public comment. Additionally, it states that the Commision appointed Jeryl Hilleman to monitor and report on the companies’ compliance and to ensure the ear, nose and throat markets remain competitive.
