Viatris fined £1.5m for failure to comply with CMA order
The CMA has found that Viatris failed to comply with compulsory restrictions imposed during the CMA’s review of its deal with Theramex.
The Competition and Markets Authority (CMA) has fined Viatris Inc. £1.5 million for failing to comply with a legally binding order. Viatris broke the rules when it did not obtain the consent of the CMA before making changes to key staff and then failed to report the breach.
Following a Phase 1 investigation, in April 2024, the CMA found the proposed acquisition by Theramex of the European rights to the hormone replacement therapy treatments Duphaston and Femoston from Viatris could reduce competition and choice for hormone replacement therapy treatments in the UK.
During the investigation, the CMA imposed an ‘Initial Enforcement Order’ under section 72(2) of the Enterprise Act 2002 which sought to prevent any action which could prejudice the CMA’s inquiry or any potential remedies that the CMA might impose.
Viatris breached these restrictions by implementing changes to key members of its UK management team without the CMA’s consent, and then failed to notify the CMA of the breach.
The CMA found that there was no reasonable excuse for Viatris failure to comply with the rules, and the breaches were capable of having an adverse impact on the investigation.
Sorcha O’Carroll, Senior Director for Mergers at the CMA, 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.
Where a business fails to comply with an interim measure, without reasonable excuse, the maximum penalty the CMA is able to impose is 5% of the total value of a party’s global turnover.
For more information, visit the Viatris/Theramex merger inquiry page.
Notes to editors:
- A copy of the full notice is available via the case page.
- Viatris was represented in the CMA’s investigation by its solicitors, Slaughter and May.
- On 12 August 2024, the CMA concluded its investigation into Theramex’s proposed acquisition of the European rights to the Duphaston and Femoston product ranges from Viatris by accepting undertakings in lieu of a Phase 2 reference, pursuant to which the parties agreed to divest the rights to commercialise Femoston and Duphaston in the UK to a third-party purchaser (Insud Pharma). A copy of the CMA’s decision to accept undertakings in lieu is available via the case page.
- Where a party fails, without reasonable excuse, to comply with interim measures during a merger inquiry such as the obligations under an Initial Enforcement Order under section 72(2) of the Enterprise Act 2002, the CMA may impose an administrative penalty on that party. The CMA has published guidance Administrative penalties: Statement of Policy on the CMA’s approach (CMA4) on the CMA’s approach and powers in relation to imposing administrative penalties. A draft updated version of the guidance, incorporating changes by the DMCCA was recently consulted on and the CMA is currently analysing feedback following the consultation closing on 23 August 2024.
- For media enquiries, contact the CMA press office on 020 3738 6460 or [email protected].