Federal Register / Vol. 79, No. 234 / Friday, December 5, 2014 / Notices 72181 

1 In particular, the written request for confidential 

treatment that accompanies the comment must 

include the factual and legal basis for the request, 

and must identify the specific portions of the 

comment to be withheld from the public record. See 

FTC Rule 4.9(c), 16 CFR 4.9(c). 

interpretation of the proposed Order or 

to modify its terms in any way. 

By direction of the Commission. 

Donald S. Clark, 

Secretary. 

[FR Doc. 2014–28605 Filed 12–4–14; 8:45 am] 

BILLING CODE 6750–01–P 

FEDERAL TRADE COMMISSION 

[File No. 141 0187] 

Medtronic, Inc. and Covidien plc; 

Analysis of Proposed Consent Order 

To Aid Public Comment 

AGENCY: Federal Trade Commission. 

ACTION: Proposed consent agreement. 

SUMMARY: The consent agreement in this 

matter settles alleged violations of 

federal law prohibiting unfair methods 

of competition. The attached Analysis to 

Aid Public Comment describes both the 

allegations in the draft complaint and 

the terms of the consent order— 

embodied in the consent agreement— 

that would settle these allegations. 

DATES: Comments must be received on 

or before December 29, 2014. 

ADDRESSES: Interested parties may file a 

comment at https://

ftcpublic.commentworks.com/ftc/

covidienmedtronicconsent online or on 

paper, by following the instructions in 

the Request for Comment part of the 

SUPPLEMENTARY INFORMATION section 

below. Write ‘‘Medtronic and 

Covidien—Consent Agreement; File No. 

141 0187’’ on your comment and file 

your comment online at https://

ftcpublic.commentworks.com/ftc/

covidienmedtronicconsent by following 

the instructions on the web-based form. 

If you prefer to file your comment on 

paper, write ‘‘Medtronic and Covidien— 

Consent Agreement; File No. 141 0187’’ 

on your comment and on the envelope, 

and mail your comment to the following 

address: Federal Trade Commission, 

Office of the Secretary, 600 

Pennsylvania Avenue NW., Suite CC– 

5610 (Annex D), Washington, DC 20580, 

or deliver your comment to the 

following address: Federal Trade 

Commission, Office of the Secretary, 

Constitution Center, 400 7th Street SW., 

5th Floor, Suite 5610 (Annex D), 

Washington, DC 20024. 

FOR FURTHER INFORMATION CONTACT: 

Christine E. Tasso, Bureau of 

Competition, (202–326–2232), 600 

Pennsylvania Avenue NW., Washington, 

DC 20580. 

SUPPLEMENTARY INFORMATION: Pursuant 

to Section 6(f) of the Federal Trade 

Commission Act, 15 U.S.C. 46(f), and 

FTC Rule 2.34, 16 CFR 2.34, notice is 

hereby given that the above-captioned 

consent agreement containing consent 

order to cease and desist, having been 

filed with and accepted, subject to final 

approval, by the Commission, has been 

placed on the public record for a period 

of thirty (30) days. The following 

Analysis to Aid Public Comment 

describes the terms of the consent 

agreement, and the allegations in the 

complaint. An electronic copy of the 

full text of the consent agreement 

package can be obtained from the FTC 

Home Page (for November 26, 2014), on 

the World Wide Web, at http://

www.ftc.gov/os/actions.shtm. 

You can file a comment online or on 

paper. For the Commission to consider 

your comment, we must receive it on or 

before December 29, 2014. Write 

‘‘Medtronic and Covidien—Consent 

Agreement; File No. 141 0187’’ on your 

comment. Your comment—including 

your name and your state—will be 

placed on the public record of this 

proceeding, including, to the extent 

practicable, on the public Commission 

Web site, at http://www.ftc.gov/os/

publiccomments.shtm. As a matter of 

discretion, the Commission tries to 

remove individuals’ home contact 

information from comments before 

placing them on the Commission Web 

site. 

Because your comment will be made 

public, you are solely responsible for 

making sure that your comment does 

not include any sensitive personal 

information, like anyone’s Social 

Security number, date of birth, driver’s 

license number or other state 

identification number or foreign country 

equivalent, passport number, financial 

account number, or credit or debit card 

number. You are also solely responsible 

for making sure that your comment does 

not include any sensitive health 

information, like medical records or 

other individually identifiable health 

information. In addition, do not include 

any ‘‘[t]rade secret or any commercial or 

financial information which . . . is 

privileged or confidential,’’ as discussed 

in Section 6(f) of the FTC Act, 15 U.S.C. 

46(f), and FTC Rule 4.10(a)(2), 16 CFR 

4.10(a)(2). In particular, do not include 

competitively sensitive information 

such as costs, sales statistics, 

inventories, formulas, patterns, devices, 

manufacturing processes, or customer 

names. 

If you want the Commission to give 

your comment confidential treatment, 

you must file it in paper form, with a 

request for confidential treatment, and 

you have to follow the procedure 

explained in FTC Rule 4.9(c), 16 CFR 

4.9(c).1 Your comment will be kept 

confidential only if the FTC General 

Counsel, in his or her sole discretion, 

grants your request in accordance with 

the law and the public interest. 

Postal mail addressed to the 

Commission is subject to delay due to 

heightened security screening. As a 

result, we encourage you to submit your 

comments online. To make sure that the 

Commission considers your online 

comment, you must file it at https://

ftcpublic.commentworks.com/ftc/

covidienmedtronicconsent by following 

the instructions on the web-based form. 

If this Notice appears at http://

www.regulations.gov/#!home, you also 

may file a comment through that Web 

site. 

If you file your comment on paper, 

write ‘‘Medtronic and Covidien— 

Consent Agreement; File No. 141 0187’’ 

on your comment and on the envelope, 

and mail your comment to the following 

address: Federal Trade Commission, 

Office of the Secretary, 600 

Pennsylvania Avenue NW., Suite CC– 

5610 (Annex D), Washington, DC 20580, 

or deliver your comment to the 

following address: Federal Trade 

Commission, Office of the Secretary, 

Constitution Center, 400 7th Street SW., 

5th Floor, Suite 5610 (Annex D), 

Washington, DC 20024. If possible, 

submit your paper comment to the 

Commission by courier or overnight 

service. 

Visit the Commission Web site at 

http://www.ftc.gov to read this Notice 

and the news release describing it. The 

FTC Act and other laws that the 

Commission administers permit the 

collection of public comments to 

consider and use in this proceeding as 

appropriate. The Commission will 

consider all timely and responsive 

public comments that it receives on or 

before December 29, 2014. You can find 

more information, including routine 

uses permitted by the Privacy Act, in 

the Commission’s privacy policy, at 

http://www.ftc.gov/ftc/privacy.htm. 

Analysis of Agreement Containing 

Consent Order To Aid Public Comment 

The Federal Trade Commission 

(‘‘Commission’’) has accepted from 

Medtronic, Inc. (‘‘Medtronic’’) and 

Covidien plc (‘‘Covidien’’), subject to 

final approval, an Agreement 

Containing Consent Order (‘‘Consent 

Agreement’’) designed to remedy the 

anticompetitive effects resulting from 


wreier-aviles on DSK5TPTVN1PROD with NOTICES
72182 Federal Register / Vol. 79, No. 234 / Friday, December 5, 2014 / Notices 

Medtronic’s proposed acquisition of 

Covidien. Under the terms of the 

proposed Decision and Order (‘‘Order’’) 

contained in the Consent Agreement, 

the parties are required to divest 

Covidien’s drug-coated balloon catheter 

business to The Spectranetics 

Corporation (‘‘Spectranetics’’). 

The Consent Agreement has been 

placed on the public record for 30 days 

to solicit comments from interested 

persons. Comments received during this 

period will become part of the public 

record. After 30 days, the Commission 

will again review the Consent 

Agreement and the comments received, 

and decide whether it should withdraw 

from the Consent Agreement, modify it, 

or make it final. 

Pursuant to a Transaction Agreement 

dated June 15, 2014, Medtronic 

proposes to merge with Covidien in 

exchange for cash and stock valued at 

approximately $42.9 billion (the 

‘‘Proposed Acquisition’’). The 

Commission’s Complaint alleges that 

the Proposed Acquisition, if 

consummated, would violate Section 7 

of the Clayton Act, as amended, 15 

U.S.C. 18, and Section 5 of the Federal 

Trade Commission Act, as amended, 15 

U.S.C. 45, by substantially lessening 

competition in the U.S. market for drugcoated balloon catheters indicated for 

the femoropopliteal (‘‘fem-pop’’) artery. 

The proposed Consent Agreement will 

remedy the alleged violations by 

preserving the competition that would 

otherwise be eliminated by the 

Proposed Acquisition. 

The Parties 

Headquartered in Minneapolis, 

Minnesota, Medtronic is a global leader 

in medical technology that develops, 

manufactures, and sells device-based 

medical therapies. Medtronic is 

developing a drug-coated balloon 

catheter indicated for the fem-pop artery 

that is currently in the Food and Drug 

Administration (‘‘FDA’’) approval 

process. 

Headquartered in Dublin, Ireland, 

Covidien develops, manufactures, and 

sells medical devices and medical 

supplies. Like Medtronic, Covidien has 

a drug-coated balloon catheter indicated 

for the fem-pop artery under 

development for which it is seeking 

FDA approval. 

The Relevant Product and Market 

Structure 

Drug-coated balloon catheters 

indicated for the fem-pop artery are 

used to treat peripheral arterial disease 

in the fem-pop artery, an artery located 

above the knee. Peripheral arterial 

disease results from atherosclerosis, the 

narrowing of blood vessels due to 

plaque buildup. Percutaneous 

transluminal angioplasty (‘‘PTA’’) 

balloon catheters are catheters with 

balloons that, once inserted into an 

artery, are expanded to push plaque 

against the artery’s lumen wall to 

reopen blood flow. Drug-coated balloon 

catheters are a type of PTA balloon 

catheter that releases paclitaxel, a cellproliferation inhibiting drug, into the 

artery wall during a medical procedure 

to prevent restenosis, or re-narrowing, of 

the artery. 

The United States is the relevant 

geographic market in which to assess 

the competitive effects of the Proposed 

Acquisition. Drug-coated balloon 

catheters are medical devices that are 

regulated by the FDA. As such, drugcoated balloon catheters sold outside 

the United States, but not approved for 

sale in the United States, do not provide 

viable competitive alternatives for U.S. 

consumers. 

The U.S. market for drug-coated 

balloon catheters indicated for the fempop artery is highly concentrated with 

only one current supplier, C.R. Bard, 

Inc. Medtronic and Covidien are likely 

to enter as the second and third U.S. 

suppliers, respectively. While there are 

other firms with drug-coated balloon 

catheters in development for sale in the 

U.S. market, Medtronic and Covidien 

are the only two anticipated market 

participants that have advanced to the 

clinical-trial stage of the FDA approval 

process for drug-coated balloon 

catheters indicated for the fem-pop 

artery. 

Entry 

Entry into the U.S. market for drugcoated balloon catheters indicated for 

the fem-pop artery would not be timely, 

likely, or sufficient in magnitude, 

character, and scope to deter or 

counteract the anticompetitive effects of 

the Proposed Acquisition. The 

development process for a drug-coated 

balloon catheter is difficult, timeconsuming, and expensive. It can take 

tens of millions of dollars of research 

and development, significant further 

funding for clinical trials, and an 

extensive amount of time to even reach 

the stage of applying to the FDA for 

approval. The regulatory approval 

process itself can also be timeconsuming as the FDA reviews the 

volume of material and data a company 

submits in support of its application. 

Effects of the Acquisition 

The Proposed Acquisition would 

cause significant competitive harm to 

consumers in the U.S. market for drugcoated balloon catheters indicated for 

the fem-pop artery. The merger would 

combine the second and third 

anticipated entrants into the market, 

likely prolonging a duopoly in the U.S. 

market for drug-coated balloon catheters 

indicated for the fem-pop artery. 

Because Medtronic and Covidien are the 

only two anticipated entrants that have 

advanced to the clinical trial stage of the 

FDA approval process, the 

consolidation of the two firms would 

deprive consumers of the benefits of a 

third competitive entrant into the 

market for a substantial period of time. 

As a result, the Proposed Acquisition 

likely would reduce the substantial 

additional price competition that would 

have resulted from an additional U.S. 

supplier of drug-coated balloon 

catheters indicated for the fem-pop 

artery. Further, the Proposed 

Acquisition likely would reduce 

innovation in the U.S. market for drugcoated balloon catheters indicated for 

the fem-pop artery. 

The Consent Agreement 

The Consent Agreement eliminates 

the competitive concerns raised by 

Medtronic’s proposed acquisition of 

Covidien by requiring the parties divest 

to Spectranetics all of the assets and 

resources needed for it to become an 

independent, viable, and effective 

competitor in the U.S. market for drugcoated balloon catheters indicated for 

the fem-pop artery. 

Spectranetics possesses the industry 

and regulatory experience to achieve 

FDA approval of Covidien’s drug-coated 

balloon catheter and become the third 

entrant into the U.S. market. 

Headquartered in Colorado Springs, 

Colorado, Spectranetics is a leader in 

peripheral vascular solutions with a 

portfolio of products that is highly 

complementary to Covidien’s drugcoated balloon catheter. Spectranetics 

manufactures and markets a range of 

devices to treat peripheral and coronary 

arterial disease and is well positioned to 

restore the benefits of competition that 

would be lost through the Proposed 

Acquisition. 

Pursuant to the Order, Spectranetics 

will receive all rights and assets related 

to Covidien’s drug-coated balloon 

catheter products, including all of the 

intellectual property used in the drugcoated balloon catheter business. In 

addition, Spectranetics will take over 

the manufacturing facility where 

Covidien currently coats the PTA 

balloon catheters with paclitaxel. The 

Order further requires that Covidien 

provide Spectranetics with a worldwide 

license to produce the PTA balloon 

catheters incorporated into the drugcoated balloon catheters. In order to 


wreier-aviles on DSK5TPTVN1PROD with NOTICES
Federal Register / Vol. 79, No. 234 / Friday, December 5, 2014 / Notices 72183 

ensure continuity of supply of a critical 

input, the Order requires that the parties 

supply Spectranetics with PTA balloon 

catheters for up to three years while 

Spectranetics transitions to independent 

manufacturing. This provision ensures 

that drug-coated balloon catheters will 

continue to be available for ongoing 

clinical trials while Spectranetics works 

to obtain FDA approval to manufacture 

the PTA balloon catheters 

independently. 

To ensure that the divestiture is 

successful, the Order requires the 

parties to enter into a transitional 

services agreement with Spectranetics to 

assist the company in establishing its 

manufacturing capabilities and securing 

all necessary FDA approvals. Further, 

the Order requires that the parties 

transfer all confidential business 

information to Spectranetics, as well as 

provide access to employees who 

possess or are able to identify such 

information. Spectranetics also will 

have the right to interview and offer 

employment to employees associated 

with Covidien’s drug-coated balloon 

catheter business. 

The parties must accomplish the 

divestiture no later than ten days after 

the consummation of the Proposed 

Acquisition. If the Commission 

determines that Spectranetics is not an 

acceptable acquirer, or that the manner 

of the divestiture is not acceptable, the 

Order requires the parties to unwind the 

sale and accomplish the divestiture 

within 180 days of the date the Order 

becomes final to another Commissionapproved acquirer. 

To ensure compliance with the Order, 

the Commission has agreed to appoint 

an Interim Monitor to ensure that 

Medtronic and Covidien comply with 

all of their obligations pursuant to the 

Consent Agreement and to keep the 

Commission informed about the status 

of the transfer of the rights and assets to 

Spectranetics. Further, the Order allows 

the Commission to appoint a Divestiture 

Trustee to accomplish the divestiture 

should the parties fail to comply with 

their divestiture obligations. Lastly, the 

Order terminates after ten years. 

The purpose of this analysis is to 

facilitate public comment on the 

Consent Agreement, and it is not 

intended to constitute an official 

interpretation of the proposed Decision 

and Order or to modify its terms in any 

way. 

By direction of the Commission. 

Donald S. Clark, 

Secretary. 

[FR Doc. 2014–28609 Filed 12–4–14; 8:45 am] 

BILLING CODE 6750–01–P 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Centers for Medicare & Medicaid 

Services 

[CMS–6056–N] 

Medicare, Medicaid, and Children’s 

Health Insurance Programs; Provider 

Enrollment Application Fee Amount for 

Calendar Year 2015 

AGENCY: Centers for Medicare & 

Medicaid Services (CMS), HHS. 

ACTION: Notice. 

SUMMARY: This notice announces a 

$553.00 calendar year (CY) 2015 

application fee for institutional 

providers that are initially enrolling in 

the Medicare or Medicaid program or 

the Children’s Health Insurance 

Program (CHIP); revalidating their 

Medicare, Medicaid, or CHIP 

enrollment; or adding a new Medicare 

practice location. This fee is required 

with any enrollment application 

submitted on or after January 1, 2015 

and on or before December 31, 2015. 

DATES: This notice is effective on 

January 1, 2015. 

FOR FURTHER INFORMATION: Frank 

Whelan, (410) 786–1302 for Medicare 

enrollment issues. Alvin Anderson, 

(410) 786–2188 for Medicaid and CHIP 

enrollment issues. 

SUPPLEMENTARY INFORMATION: 

I. Background 

In the February 2, 2011 Federal 

Register (76 FR 5862), we published a 

final rule with comment period titled 

‘‘Medicare, Medicaid, and Children’s 

Health Insurance Programs; Additional 

Screening Requirements, Application 

Fees, Temporary Enrollment Moratoria, 

Payment Suspensions and Compliance 

Plans for Providers and Suppliers.’’ This 

rule finalized, among other things, 

provisions related to the submission of 

application fees as part of the Medicare, 

Medicaid, and CHIP provider 

enrollment processes. As provided in 

section 1866(j)(2)(C)(i) of the Social 

Security Act (as amended by section 

6401 of the Affordable Care Act) and in 

42 CFR 424.514, ‘‘institutional 

providers’’ that are initially enrolling in 

the Medicare, Medicaid, or CHIP 

program, revalidating their enrollment, 

or adding a new Medicare practice 

location are required to submit a fee 

with their enrollment application. An 

‘‘institutional provider’’ for purposes of 

Medicare is defined at § 424.502 as 

‘‘(a)ny provider or supplier that submits 

a paper Medicare enrollment 

application using the CMS–855A, CMS– 

855B (not including physician and nonphysician practitioner organizations), 

CMS–855S, or associated Internet-based 

PECOS enrollment application.’’ As we 

explained in the February 2, 2011 final 

rule (76 FR 5914), in addition to the 

providers and suppliers subject to the 

application fee under Medicare, 

Medicaid-only, and CHIP-only 

institutional providers would include 

nursing facilities, intermediate care 

facilities for persons with mental 

retardation (ICF/MR), psychiatric 

residential treatment facilities, and may 

include other institutional provider 

types designated by a state in 

accordance with their approved state 

plan. 

As indicated in §§ 424.514 and 

455.460, the application fee is not 

required for either of the following: 

• A Medicare physician or nonphysician practitioner submitting a 

CMS–855I. 

• A prospective or revalidating 

Medicaid or CHIP provider— 

++ Who is an individual physician or 

non-physician practitioner; or 

++ That is enrolled in Title XVIII of 

the Act or another state’s Title XIX or 

XXI plan and has paid the application 

fee to a Medicare contractor or another 

state. 

II. Provisions of the Notice 

A. CY 2014 Fee Amount 

In the December 2, 2013 Federal 

Register (78 FR 72089), we published a 

notice announcing a fee amount for the 

period of January 1, 2014 through 

December 31, 2014 of $542.00. This 

figure was calculated as follows: 

• Section 1866(j)(2)(C)(i)(I) of the Act 

established a $500 application fee for 

institutional providers in CY 2010. 

• Consistent with section 

1866(j)(2)(C)(i)(II) of the Act, 

§ 424.514(d)(2) states that for CY 2011 

and subsequent years, the preceding 

year’s fee will be adjusted by the 

percentage change in the consumer 

price index (CPI) for all urban 

consumers (all items; United States city 

average, CPI–U) for the 12-month period 

ending on June 30 of the previous year. 

• The CPI–U increase for CY 2011 

was 1.0 percent, based on data obtained 

from the Bureau of Labor Statistics 

(BLS). This resulted in an application 

fee amount for CY 2011 of $505 (or $500 

× 1.01). 

• The CPI–U increase for the period 

of July 1, 2010 through June 30, 2011 

was 3.54 percent, based on BLS data. 

This resulted in an application fee 

amount for CY 2012 of $522.87 (or $505 

× 1.0354). In the aforementioned 

February 2, 2011 final rule, we stated 


wreier-aviles on DSK5TPTVN1PROD with NOTICES