UK’s Competition and Markets Authority (CMA) has fined US-based firm Viatris £1.5m for breaching an order during its investigation into the sale of European rights to two of its product lines to Theramex.
The regulator found that Viatris violated compulsory restrictions during its review of the deal. Viatris is alleged to have violated rules by making staff changes without the CMA’s consent and failing to report the breach.
Theramex, a supplier of hormone replacement therapy (HRT) in the UK, agreed last year to purchase the European rights to the women’s healthcare products Duphaston and Femoston from Viatris.
In April 2024, the CMA concluded its Phase 1 investigation, which revealed that Theramex’s acquisition of Duphaston and Femoston could reduce competition in the UK. The competition watchdog raised concerns that the deal may limit choices for hormone replacement therapy treatments.
During the investigation, the CMA imposed an Initial Enforcement Order (IEO) under the Enterprise Act 2002 to prevent actions that could interfere with its inquiry or potential remedies that the CMA could impose.
As per the law, if a business fails to comply with an IEO without reasonable excuse, the CMA can impose a maximum penalty of 5% of the party’s total global turnover.
Viatris is alleged to have breached these restrictions by making changes to key UK-based management without the CMA’s consent and failing to report the breach.
The competition regulator found no reasonable excuse for Viatris’ failure to comply, noting that the breaches could negatively impact the investigation.
CMA mergers senior director Sorcha O’Carroll said: “Interim orders are of vital importance to the proper functioning of the UK’s voluntary merger control regime.
“The CMA expects parties to comply in full with their obligations under such orders, to put in place robust procedures to ensure compliance, and to be open and transparent in all their dealings with the CMA in relation to them.
“In this case, we are particularly troubled by Viatris’ failure to promptly and candidly report relevant facts, in circumstances where Viatris should have known or suspected that it had breached the rules.
“The CMA takes these matters very seriously and we stand ready to use our powers to impose penalties where merger parties act in breach of the rules.”
Recently, the pharmaceutical company reported a 71% decline in Q3 2024 net income to $95m.
