Abbott agrees to divest two medical device businesses

Healthcare company Abbott Laboratories has agreed to divest two medical device businesses in a bid to settle competition charges brought by the US Federal Trade Commission (FTC).

The FTC’s complaint, issued on December 27, 2016, alleged that Abbott’s proposed $25 billion acquisition of medical device company St Jude Medical would probably be anti-competitive.

In a statement, the FTC said that “without a remedy, the proposed acquisition would harm competition in the US markets for vascular closure devices”.

Vascular closure devices are used to close holes in arteries from the insertion of catheters, and for “steerable” sheaths, which are used to guide catheters for treating heart arrhythmias.

According to the FTC, the merged firm would control more than 70% of the market for vascular closure devices.

“St Jude has held a near-monopoly in the market for steerable sheaths for more than a decade. Abbott recently entered the market, and the transaction would eliminate any competition between them,” it said.

The companies will divest all rights and assets related to St Jude’s vascular closure device business and Abbott’s steerable sheath business to Terumo Corporation, a Tokyo-based medical device maker.

Although Terumo doesn’t currently sell any vascular closure devices or steerable sheaths, it has sold related products and medical devices in the US market for more than 30 years. According to the FTC, it “possesses the industry experience and reputation necessary to replace competition”.