Antitrust Law Daily Bausch + Lomb Parent consents to divestiture of Paragon Holdings
Tuesday, November 8, 2016

Bausch + Lomb Parent consents to divestiture of Paragon Holdings

By Edward L. Puzzo, J.D.

Canada-based Valeant Pharmaceuticals International, parent of contact lens producer Bausch + Lomb, has agreed to divest its ownership of Paragon Holdings I in order to settle FTC charges that its $69.1 million acquisition of Paragon restrained competition in the markets for polymer discs, or "buttons," used to make different types of rigid gas permeable ("GP") contact lenses, the FTC has announced (In the Matter of Valeant Pharmaceuticals International, Inc., FTC File Nos. 151-0236 and 161-0028).

The FTC had charged that the May 2015 acquisition of Paragon Holdings I, including subsidiaries Paragon Vision Sciences and CRT Technology, by Valeant Pharmaceuticals International, parent of Bausch + Lomb, lessened competition and tended to create a monopoly in the market for "GP buttons," i.e. FDA approved polymer discs used in the production of three types of rigid gas-permeable contact lenses: orthokeratology contact lenses, large-diameter scleral contact lenses, and general vision correction contact lenses.

The acquisition had combined the two largest manufacturers of GP buttons, accounting for more than 70 percent of U.S. sales across all three button types. The FTC alleged that this acquisition allowed Valeant to exercise market power unilaterally in each button market by increasing prices, reducing volume discounts, decreasing innovation, and reducing product distribution options. After the Paragon acquisition, Valeant also purchased Pelican Products, a manufacturer of contact lens packaging, and the only producer of FDA-approved vials for wet-shipping finished orthokeratology lenses.

Under the terms of the proposed FTC consent order, Valeant would be required to divest Paragon in its entirety, including the assets of Pelican Products, to Paragon Companies LLC, a newly created entity.

Attorneys: Danica Noble for FTC. Steven C. Sunshine (Skadden, Arps, Slate, Meagher & Flom, LLP) for Valeant Pharmaceuticals International, Inc.

Companies: Valeant Pharmaceuticals International, Inc.; Bausch + Lomb; Paragon Holdings I, Inc.; Paragon Vision Sciences, Inc.; Paragon Companies LLC; CRT Technology, Inc; Pelican Products LLC.

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