CELEX: 32019M9274
Language: en
Date: 2019-07-10 00:00:00
Title: Commission Decision of 10/07/2019 declaring a concentration to be compatible with the common market (Case No COMP/M.9274 - GLAXOSMITHKLINE / PFIZER CONSUMER HEALTHCARE BUSINESS) according to Council Regulation (EC) No 139/2004 (Only the English text is authentic)

EUROPEAN COMMISSION
                                                               Brussels, 10.7.2019
                                                               C(2019) 5366 final
                                                                              PUBLIC VERSION
                                                                In the published version of this decision,
                                                                some information has been omitted
                                                                pursuant to Article 17(2) of Council
                                                                Regulation      (EC)    No      139/2004
                                                                concerning non-disclosure of business
                                                                secrets     and    other      confidential
                                                                information. The omissions are shown
                                                                thus […]. Where possible the
                                                                information omitted has been replaced
                                                                by ranges of figures or a general
                                                                description.
                                                               To the notifying party
Subject:            Case M.9274 - GLAXOSMITHKLINE / PFIZER CONSUMER
                    HEALTHCARE BUSINESS
                    Commission decision pursuant to Article 6(1)(b) in conjunction with
                    Article 6(2) of Council Regulation No 139/20041 and Article 57 of the
                    Agreement on the European Economic Area2
Dear Sir or Madam,
(1)       On 17 May 2019, the European Commission (“the Commission”) received
          notification of a proposed concentration pursuant to Article 4 of the Merger
          Regulation by which GlaxoSmithKline plc. (“GSK”, United Kingdom) will
          acquire sole control over the consumer health business of Pfizer Inc. (“Pfizer”,
          United States), hereinafter referred to as “Pfizer CH” (“the Transaction”). GSK is
          referred to as “the Notifying Party” and, together with Pfizer CH, as “the Parties”.
1         OJ L 24, 29.1.2004, page 1 (the 'Merger Regulation'). With effect from 1 December 2009, the
          Treaty on the Functioning of the European Union ('TFEU') has introduced certain changes, such
          as the replacement of 'Community' by 'Union' and 'common market' by 'internal market'. The
          terminology of the TFEU will be used throughout this decision.
2         OJ L 1, 3.1.1994, page 3 (the 'EEA Agreement').
Commission européenne, DG COMP MERGER REGISTRY, 1049 Bruxelles, BELGIQUE
Europese Commissie, DG COMP MERGER REGISTRY, 1049 Brussel, BELGIË
Tel: +32 229-91111. Fax: +32 229-64301. E-mail: COMP-MERGER-REGISTRY@ec.europa.eu.
 ---pagebreak--- I.  THE PARTIES
(2) GSK is a global pharmaceutical company headquartered in the United Kingdom.
    GSK’s worldwide consumer health products span across various therapeutic
    areas, namely (i) pain management, (ii) respiratory health, (iii) nutrition and
    digestive health, (iv) skin health, and (v) oral health.
(3) Pfizer CH consists of the global portfolio of non-prescription (also known as
    “over-the-counter” or “OTC”) pharmaceutical products of Pfizer,3 a global
    pharmaceutical company headquartered in the United States. Pfizer CH is active
    worldwide across various product categories, namely (i) pain management, (ii)
    respiratory health, (iii) gastrointestinal treatment, (iv) dietary supplements, and
    (v) personal care products.
II. THE OPERATION
    The Transaction
(4) On 19 December 2018, GSK and Pfizer entered into a Stock and Asset Purchase
    Agreement (“SAPA”) whereby: (i) GSK would acquire an equity interest of 68%
    over Pfizer CH through a newly created company, to which GSK will contribute
    its own global OTC business at closing,4 thereby combining both Pfizer CH and
    GSK consumer health businesses into one single entity (“the Combined CH
    Business”); and (ii) Pfizer would obtain an equity interest of 32% into the
    Combined CH Business as part of the consideration for the Transaction, which is
    structured as an exchange offer.
    GSK to exercise sole control over the Combined CH Business
(5) GSK will own the majority of the shares and voting rights into the Combined CH
    Business. In addition, Pfizer will not: (i) hold veto rights with respect to decisions
    that are essential for the strategic commercial behaviour of the joint venture; or
    (ii) make any contribution to the joint venture such as to result in a commonality
    of shareholders' interests.
(6) In relation to (i), Pfizer will not have veto rights over strategic matters related to
    the Combined CH Business, including the approval of the business plan and the
    budget, or the appointment of senior management. The powers conferred to Pfizer
3   The following exceptions apply: (i) Pfizer will transfer a limited number of prescription products
    to GSK because certain SKUs of Pfizer CH’s brands are sold on prescription in a handful of EEA
    Member States due to national regulatory requirements; and (ii) Pfizer will retain: a) OTC
    products that are currently sold by Pfizer’s Biopharmaceuticals Group (notably, certain
    biosimilars) and Upjohn businesses (notably, off-patent solid oral dose legacy brands, including
    Lyrica, Lipitor, Novarsc, Viagra and Celebrex); b) products belonging to global brands which are
    predominantly sold on prescription but a version thereof is also sold OTC (in relation to the EEA,
    Diflucan and Feldene); and c) prescription products that have recently switched to OTC in a
    country or for which Pfizer is pursuing a switch to OTC (in relation to the EEA, these include
    products marketed under the brands […]).
4   With the exception of certain assets belonging to its Indian business (notably, the Horlicks brand),
    which it has agreed to sell to Unilever (Form CO, Chapter 1, Section 1, paragraph 11).
                                                    2
 ---pagebreak---        are intended to protect the value of its minority interest in the joint venture and
       will not grant it negative control within the meaning of the Merger Regulation.
(7)    In relation to (ii), Pfizer will essentially exit the OTC space through the
       Transaction and, conversely, will not make any "vital contribution" to the
       Combined CH Business in the future. Therefore, the Transaction will not result in
       a “high degree of mutual dependency” between GSK and Pfizer in relation to the
       “strategic objectives” of the Combined CH Business.5
(8)    Therefore, post-Transaction, GSK will have sole control over the Combined CH
       Business, which includes Pfizer CH.
       Conclusion on the concentration
(9)    The Commission therefore concludes that the Transaction constitutes a
       concentration within the meaning of Article 3(1)(b) of the Merger Regulation.
III.   EU DIMENSION
(10)   The undertakings concerned have a combined aggregate worldwide turnover in
       excess of EUR 5 000 million (GSK: EUR 34 433 million; Pfizer CH: EUR 3 073
       million). Each of them has an EU-wide turnover in excess of EUR 250 million
       (GSK: […]; Pfizer CH: […]), and each of them does not achieve more than two-
       thirds of its aggregate EU-wide turnover within one and the same Member State.
(11)   The Transaction therefore has an EU dimension within the meaning of Article
       1(2) of the Merger Regulation.
IV.    COMPETITIVE ASSESSMENT
1.     GENERAL CONSIDERATIONS ON MARKET DEFINITION
  1.1. Product market definition
(12)   When defining relevant markets in past decisions dealing with finished dose
       pharmaceutical products,6 the Commission based its assessment on the following
       general approach.7
5      Paragraph 77 of the Consolidated Jurisdictional Notice under Council Regulation (EC) No
       139/2004 on the control of concentrations between undertakings (OJ C 95, 16.4.2008) (the
       “CJN”).
6      Finished dose pharmaceuticals (“FDPs”) refer to the finished dosage form of pharmaceutical
       products, which, in other words, are ready to be used by customers. FDPs contain (i) an active
       pharmaceutical ingredient (or “API”, which correspond to the component present within the
       product that provides the pharmacological action in the body, e.g., acetyl salicylic acid in an
       aspirin tablet), or a combination of APIs; and (ii) other excipients.
7      See, for example, Commission decision of 27 August 2018 in case M.8974 – Procter & Gamble /
       Merck Consumer Health Business; Commission decision of 4 August 2016 in case M.7919 –
       Sanofi/Boehringer Ingelheim Consumer healthcare Business; Commission decision of 05 August
       2013 in case M.6969 – Valeant Pharmaceuticals International/Bausch & Lomb Holdings;
                                                         3
 ---pagebreak--- (13) The Commission noted that medicines may be subdivided into therapeutic classes
     by reference to the Anatomical Therapeutic Classification (“ATC”), devised by
     the European Pharmaceutical Marketing Research Association (“EphMRA”) and
     maintained by EphMRA and IQVIA, formerly known as Intercontinental Medical
     Statistics (“IMS”).
(14) The ATC system is a hierarchical and coded four-level system which classifies
     medicinal products by class according to their indication, therapeutic use,
     composition, and mode of action. In the first and broadest level (ATC 1),
     medicinal products are divided into the 16 anatomical main groups. The second
     level (ATC 2) is either a pharmacological or therapeutic group. The third level
     (ATC 3) further groups medicinal products by their specific therapeutic
     indications. Finally, the ATC 4 level is generally the most detailed one (not
     available for all ATC 3) and refers for instance to the mode of action or any other
     subdivision of the relevant products.
(15) The Commission has often referred to the third level (ATC 3) as the starting point
     for defining the relevant product market. However, in a number of cases, the
     Commission found that the ATC 3 level classification did not yield the
     appropriate market definition within the meaning of the Commission Notice on
     the Definition of the Relevant Market.8 In particular, in relation to originator and
     generic medicines, the Commission has considered in previous decisions
     plausible product markets at the ATC 4 level, at a level of a molecule or a group
     of molecules that are considered interchangeable so as to exercise competitive
     pressure on one another. However, an overlap in therapeutic uses does not
     necessarily imply any particular economic substitution patterns between
     products.9
(16) In relation to generic medicines sold on prescription (“Rx”), the Commission has
     considered in previous decisions that the most plausible product market is
     generally at the level of a molecule since generics are the closest substitutes to the
     originator product based on the same molecule. The Commission then assessed
     the potential for these products to enter into competition with other products by
     reference to their characteristics, intended therapeutic use, and expected
     therapeutic and economic substitutability.10
     Commission decision of 9 August 2010 in case M.5778 – Novartis/Alcon; Commission decision
     of 28 January 2015 in case M.7276 – GlaxoSmithKline/ Novartis Vaccines Business (Excl.
     Influenza) / Novartis Consumer Health Business; Commission decision of 03 August 2010 in case
     M.5865 – Teva / Ratiopharm; Commission decision of 29 June 2010 in case M.8889 – Teva / PGT
     OTC.
8    OJ C 372, 9.12.1997, pages 5 to 13.
9    See for example Commission decision of 4 August 2018 in case M.7919 – Sanofi/Boehringer
     Ingelheim Consumer Healthcare Business; Commission decision of 16 March 2018 in case
     M.7480 – Actavis/Allergan; Commission decision of 28 January 2018 in case M.7379 –
     Mylan/Abbott; Commission decision of 28 January 2015 in case M.7276 – GlaxoSmithKline/
     Novartis Vaccines Business (Excl. Influenza) / Novartis Consumer Health Business; Commission
     decision of 28 January 2015 in case M.7276 – Novartis/GlaxoSmithKline Oncology Business; and
     Commission decision of 4 February 2009 in case M.5253 – SanofiAventis/Zentiva.
10   Commission decision of 4 February 2009 in case M.7746 – Teva / Allergan Generics.
                                                    4
 ---pagebreak--- (17) In relation to OTC products, the active ingredient (molecule) appears to play a
     much more subordinated role, unless it is equivalent to a specific
     therapeutic/labelled indication (in situations where all products based on the same
     molecule, and only those, have the same indication).11 The Commission has
     considered in previous decisions that the most plausible product market is
     generally at the level of the therapeutic indication, which may be a sub-division of
     the ATC 3 or even ATC 4 categories or may combine products belonging to
     different ATC 3 or ATC 4 categories.12 In view of these specificities, IQVIA (ex-
     IMS) has developed a specific classification for OTC products, including the
     OTC 2, OTC 3, and OTC 4 levels. In previous decisions dealing with OTC
     products, the Commission has also referred to the OTC 3 level as the starting
     point for defining the relevant product market in OTC markets.13
     1.1.1.    Distinction OTC and Rx products
(18) There are three main types of regulatory authorisations required in order to bring
     a new pharmaceutical product to market: manufacturing, distribution and
     marketing authorisation. When a marketing authorisation is granted, the
     competent authorities specify the classification of the medicinal product into two
     categories: (i) subject to medical prescription (Rx), or (ii) not subject to medical
     prescription (OTC), depending of medical indications or specific precautions of
     use (for instance adverse reactions).14
(19) The Commission has defined in the past separate markets for medicines which
     can be dispensed only against a prescription and those which can be sold OTC,
     while acknowledging that in certain circumstances (for example, in cases where
     the status of the drug is not clearly limited to either OTC or prescription) OTC
     products may compete with Rx products.15 Medical indications, side effects,
     regulatory framework, distribution and marketing tend to differ between these
     drug categories, even if the active ingredients may sometimes be identical;
     therefore, OTC and Rx products tend to be part of separate markets.
11   See for example Commission decision of 4 August 2018 in case M.7919 – Sanofi/Boehringer
     Ingelheim Consumer Healthcare Business.
12   See for example Commission decision of 4 August 2018 in case M.7919 – Sanofi/Boehringer
     Ingelheim Consumer Healthcare Business.
13   See for example Commission decision of 29 June 2018 in case M.8889 – Teva / PGT OTC Assets,
     paragraph 48, 58, 70ff and 84ff; Commission decision of 4 August 2018 in case M.7919 –
     Sanofi/Boehringer Ingelheim Consumer Healthcare Business, paragraph 264 and 268;
     Commission decision of 28 January 2015 in case M.7276 – GlaxoSmithKline/ Novartis Vaccines
     Business (Excl. Influenza) / Novartis Consumer Health Business, paragraph 197 and Commission
     decision of 28 January 2015 in case M.6162 – Pfizer/Ferrosan Consumer Healthcare Business,
     paragraph 37.
14   Commission decision of 28 January 2015 in case M.7276 – GlaxoSmithKline/ Novartis Vaccines
     Business (Excl. Influenza) / Novartis Consumer Health Business.
15   See for example Commission decision of 5 August 2013 in case M.6969 – Valeant
     Pharmaceuticals International/Bausch & Lomb Holdings; Commission decision of 9 August 2010
     in case M.5778 – Novartis/Alcon; Commission decision of 19 December 2008 in case M.5295 –
     Teva/Barr; Commission decision of 28 January 2018 in case M.7379 – Mylan/Abbott.
                                                    5
 ---pagebreak--- (20)   The market investigation did not suggest that departing from previous
       Commission decisions would be appropriate in this case and, in particular, did not
       provide particular indications that Rx products exert significant competitive
       pressure on the OTC products at stake. In any event, as discussed in Section IV.2
       and in line with its decisional practice, the Commission has considered potential
       overlaps between OTC and Rx products, in addition to OTC vs OTC and Rx vs
       Rx overlaps, where relevant, in order to assess the likely effect of the Transaction
       on competition.
       1.1.2.    Other possible segmentations
(21)   As the Commission has acknowledged in its decisional practice, medicines are
       differentiated not only by their active ingredient(s) but also, in particular, as
       recognized by the European regulatory framework for medicines for human use,
       by their posology (or dosage), pharmaceutical form, method and route of
       administration (collectively referred to as “galenic form” in this Decision) which
       may limit their substitutability.16 The galenic form of a medicine may in some
       cases influence the preferences of consumers or be targeted to specific patients
       groups (for example, children), and therefore, two medicines with the same active
       ingredient and indications may not be (fully) interchangeable for certain patient
       groups.17 Certain medicines can also be indicated only for a specific patient group
       (for example, adults or children).
       1.1.3.    Conclusion
(22)   The Commission will analyse in Section IV.3 the relevance of the distinctions
       discussed in the present Section for the specific markets at stake.
  1.2. Geographic market definition
(23)   The Commission has consistently defined the geographic markets for finished
       dose pharmaceutical products as being national in scope.18
(24)   The Notifying Party, in line with the Commission’s decisional practice, provided
       market share data at national level.
(25)   The market investigation in this case did not provide any indications that the
       geographic scope of the markets concerned by the Transaction should be
       revisited, in particular in view of the national regulatory and reimbursement
16     See for example Commission decision of 9 August 2010 in case M.5778 – Novartis/Alcon;
       Commission decision of 4 February 2009 in case M.5253 – SanofiAventis/Zentiva; Commission
       decision of 03 August 2010 in case M.5865 – Teva / Ratiopharm and Commission decision of 28
       January 2015 in case M.7276 – GlaxoSmithKline/ Novartis Vaccines Business (Excl. Influenza) /
       Novartis Consumer Health Business. M.5778 - Novartis/Alcon; M.5865 - Teva/Ratiopharm, and
       M.5253 - Sanofi-Aventis/Zentiva.
17     See for example Commission decision of 4 August 2018 in case M.7919 – Sanofi/Boehringer
       Ingelheim Consumer Healthcare Business and Commission decision of 28 January 2015 in case
       M.7276 – GlaxoSmithKline/ Novartis Vaccines Business (Excl. Influenza) / Novartis Consumer
       Health Business.
18     See most recently Commission decision of 20 December 2017 in case M.8675 – CVC/Teva’s
       Women’s Health Business, paragraph 20.
                                                    6
 ---pagebreak---      schemes, and the fact that competition between pharmaceutical suppliers still
     predominantly takes place at a national level.
(26) Therefore, for the purposes of this Decision, the Commission concludes that the
     geographic scope of all relevant product markets is national.
2.   METHODOLOGY FOR THE IDENTIFICATION AND THE ASSESSMENT OF AFFECTED
     MARKETS
(27) In line with Commission precedents, the Notifying Party primarily used sales data
     of pharmaceutical products compiled by IQVIA (ex-IMS) to identify the affected
     markets that the Transaction gives rise to.
(28) The Notifying Party has provided market shares compiled by IQVIA based on
     both value and volume. For the purposes of this Decision, in line with previous
     practice, the Commission has primarily relied on the value of sales as a measure
     of market shares.19 Calculating market shares on the basis of value has the
     advantage of enabling the aggregation of differentiated products in terms of active
     ingredients, delivery mode, volume container or packaging size, while also
     reflecting the relative strength of (non-)branded products in the OTC space where
     brand awareness remains a key driver of competition and pricing. Therefore, the
     Commission considers that value shares provide a more accurate picture of the
     market position of the Parties' branded OTC products and of the actual
     competition they face in each relevant product market.
(29) In relation to OTC vs OTC overlaps, the Notifying Party identified the
     overlapping indications by following in particular the OTC classification and data
     of the OTC-IMS database.20 The Notifying Party also provided information using
     the ATC classification and data of the MIDAS database,21 as well as from a
     separate source for Malta.22 The OTC vs OTC overlaps between the Parties
19   See, e.g, M.5253 – Sanofi-Aventis/Zentiva, paragraph 204. See also M.5865 – Teva/Ratiopharm,
     paragraph 49; M.6613 – Watson/Actavis, paragraph 38.
20   The OTC-IMS database, based on IQVIA’s proprietary classification of “OTC” codes”, covers the
     pharmacy channel and, in some countries, other retail channels, and focuses on non-prescription
     products. The database covers all EEA Member States except Cyprus, Malta, Liechtenstein,
     Iceland, Denmark, Estonia, Latvia, Lithuania, Luxembourg, and Sweden.
21   The MIDAS database, based on the ATC classification system, only covers the pharmacy channel
     and includes sales of medical products sold OTC only, both on prescription and OTC, and on
     prescription only. The database covers all EEA Member States except Cyprus, Malta,
     Liechtenstein, and Iceland.
22   The Parties’ activities overlap in Malta, where IQVIA does not collect data. Therefore, the
     Notifying Party has provided data collected by a different third party organisation, Misco Malta.
     However, the Notifying Party notes that such data is based on pharmacies surveys which are not
     sufficiently representative and may thus not accurately reflect the Parties’ and their competitors’
     position on the relevant markets. The Notifying Party further submits that both Parties only sell
     their products in Malta via independent distributors and generate very limited sales, which gives
     them little visibility as to the local market dynamics.
                                                       7
 ---pagebreak---      resulting from the Transaction gives rise to a number of affected markets, which
     will be discussed in the relevant Sections of this Decision.23
(30) Pfizer CH includes almost exclusively OTC products; however, due to national
     requirements, certain SKUs are sold on prescription in certain EEA Member
     States.24 In relation to Rx vs Rx overlaps, the Notifying Party identified the
     overlapping indications by identifying the Rx products contained in the ATC
     classification and data of the ATC-based IQVIA MIDAS database. As regards Rx
     vs Rx overlaps, the only overlap that potentially gives rise to an affected market
     relates to cold and flu treatments in Romania. This overlap will be further
     discussed in Section IV.3.2.3 of this Decision.
(31) In relation to Rx vs OTC overlaps, the Notifying Party identified the overlapping
     indications by following in particular the ATC classification and data of the
     MIDAS database. In that respect, the Transaction gives rise to a number of
     affected markets, which will be discussed in Section IV.3 of this Decision.
(32) The OTC industry comprises pharmaceutical products that can be purchased
     without a prescription in pharmacies or, in certain EEA countries, from other
     retailers such as supermarkets, drugstores, etc. Internet sales may also play a role
     in certain markets. In this respect, the Notifying Party has not adjusted sales data
     to take into account sales achieved through alternative distribution channels that
     may not be covered in the OTC-IMS/MIDAS databases, such as online, mass
     market, and direct sales to consumers. However, the Notifying Party confirmed
     that market shares of GSK, Pfizer CH and their competitors are unlikely to vary
     in any significant manner if additional distribution channels are taken into
     account, and that, thus, no additional affected markets would arise from the
     Transaction.25 Moreover, the results of the market investigation did not contradict
     the Notifying Party’s claim in that respect.
(33) In line with the Commission precedents in the pharmaceutical sector,26 the
     Notifying Party classified affected markets in three categories:
            Group 1, where the Parties' combined market share exceeds 35% and the
             increment exceeds 1%;27
23   The Transaction gives rise to affected markets in topical pain management (in Austria, Belgium,
     France, Germany, Ireland, Italy, Portugal, and Spain), systemic pain management (in Germany,
     Greece, Hungary, Ireland, and Malta), cold and flu (in the Czech Republic, France, Hungary,
     Ireland, Malta, Romania, Slovakia, and the United Kingdom), nutrition and digestive health (in
     Slovakia), and gastro-intestinal treatments (in Ireland). Regarding gastro-intestinal treatments, as
     explained in Section IV.3.3, the Transaction gives rise to additional affected markets based on
     2016-2018 market shares. However, the Commission does not consider such markets as affected
     for the purposes of this Decision as GSK terminated the licence relating to the product giving rise
     to such affected markets (and GSK does not have the right to market these products in the future).
24   Form CO, Chapter 1, Section 1, paragraph 22.
25   Form CO, Chapter 2, Section 7, paragraph 51.
26   See, e.g., Commission decision of 29 June 2018 in case M.8889 - Teva / PGT OTC Assets,
     paragraph 35. See also Commission decision of 15 June 2016 in case M.7919, Sanofi/Boehringer
     Ingelheim Consumer Healthcare Business, paragraph 35.
                                                      8
 ---pagebreak---             Group 2, where the Parties' combined market share exceeds 35% but the
             increment is below 1%; and
            Group 3, where the Parties' combined market share is between 20% and
             35%.
(34) The Commission has analysed all markets affected by the Transaction. However,
     in line with precedents,28 Group 3 markets are not discussed individually in this
     Decision.29 The Commission assessed the competitive situation on these markets
     by considering the nature and the number of existing competitors and reached the
     conclusion that the Transaction is unlikely to raise serious doubts as to its
     compatibility with the internal market in relation to the markets in question. The
     results of the market investigation did not contradict this conclusion.
3.   HORIZONTAL NON-COORDINATED EFFECTS
(35) The Commission determines whether notified concentrations are compatible with
     the internal market, by assessing whether they would significantly impede
     effective competition in the internal market or in a substantial part of it, in
     particular, as a result of the creation or strengthening of a dominant position.
(36) A merger giving rise to significant impediment of effective competition may do
     so as a result of the creation or strengthening of a dominant position in the
     relevant market(s). Moreover, mergers in oligopolistic markets involving the
     elimination of important constraints that the parties previously exerted on each
     other, together with a reduction of competitive pressure on the remaining
     competitors, may also result in a significant impediment to effective competition,
     even in the absence of dominance.30
(37) The Commission Guidelines on the assessment of horizontal mergers under the
     Merger Regulation (the “Horizontal Merger Guidelines”)31 describe horizontal
     non-coordinated effects as follows: “A merger may significantly impede effective
27   The Notifying Party submitted that the Transaction does not give rise to any Group 1+ markets,
     that is to say markets where (i) the combined market share is below 35% but only one competitor
     remains on the market; or (ii) the combined market share exceeds 35% and the increment is below
     1% but the party with the small increment is a recent entrant.
28   See for example Commission decision of 29 June 2018 in case M.8889 – Teva / PGT OTC Assets,
     paragraph 36.
29   The Transaction gives rise to Group 3 markets under plausible market definitions in topical pain
     management (in France and Spain), systemic pain management (in Germany, Greece, Hungary
     and Ireland), cold and flu (in the Czech Republic, France, Hungary, Ireland, Romania, Slovakia,
     and the United Kingdom), multivitamins (in Slovakia), and gastro-intestinal treatments (in
     Ireland). In all these markets, the combined share of the Parties is moderate to low and a number
     of strong competitors will remain active. In addition, as explained in Section IV.3.3 below and in
     footnote 23 above, the Transaction gives rise to additional affected markets in the area of
     gastrointestinal treatments based on 2016-2018 market shares. However, the Commission does not
     consider such markets as affected for the purposes of this Decision as GSK terminated the licence
     relating to the product giving rise to such affected markets (and GSK does not have the right to
     market these products in the future).
30   Horizontal Merger Guidelines, paragraph 25.
31   OJ C 31, 5.2.2004, p. 5.
                                                      9
 ---pagebreak---        competition in a market by removing important competitive constraints on one or
       more sellers who consequently have increased market power. The most direct
       effect of the merger will be the loss of competition between the merging firms. For
       example, if prior to the merger one of the merging firms had raised its price, it
       would have lost some sales to the other merging firm. The merger removes this
       particular constraint. Non-merging firms in the same market can also benefit
       from the reduction of competitive pressure that results from the merger, since the
       merging firms’ price increase may switch some demand to the rival firms, which,
       in turn, may find it profitable to increase their prices. The reduction in these
       competitive constraints could lead to significant price increases in the relevant
       market.”32
(38)   The Horizontal Merger Guidelines list a number of factors which may influence
       whether or not significant non-coordinated effects are likely to result from a
       merger, such as the large market shares of the merging firms, the fact that the
       merging firms are close competitors, the limited possibilities for customers to
       switch suppliers, or the fact that the merger would eliminate an important
       competitive force.33 That list of factors applies equally regardless of whether a
       merger would create or strengthen a dominant position, or would otherwise
       significantly impede effective competition due to non-coordinated effects.
       Furthermore, not all of these factors need to be present for significant non-
       coordinated effects to be likely. The list of factors, each of which is not
       necessarily decisive in its own right, is also not an exhaustive list.34
(39)   Finally, the Horizontal Merger Guidelines describe a number of factors, which
       could counteract the harmful effects of the merger on competition, including the
       likelihood of buyer power, the entry of new competitors on the market, and
       efficiencies.
(40)   In the present case, the Parties’ activities overlap in a number of EEA countries in
       relation to topical and systemic pain management products, cold and flu
       treatments, gastrointestinal treatments, multivitamins, laxatives, sedatives and
       sleeping aids. Affected markets arise only in relation to topical and systemic pain
       management products, cold and flu treatments, gastrointestinal treatments, and
       nutrition and digestive health (multivitamins).
  3.1. Pain management
       3.1.1.    Introduction regarding product market definition
(41)   Both GSK and Pfizer CH are active in pain management across the EEA. GSK’s
       flagship products include the Volta-branded products (which include a number of
       topical pain relievers available in different formats) and Panadol (a systemic pain
       reliever based on paracetamol). On the other hand, Pfizer CH’s flagship products
       include ThermaCare (Pfizer CH’s main topical pain management product, which
       is predominantly available as heat patches) and the Advil brand (covering
32     Horizontal Merger Guidelines, paragraph 24.
33     Horizontal Merger Guidelines, paragraphs 27 and following.
34     Horizontal Merger Guidelines, paragraphs 24-38.
                                                    10
 ---pagebreak---      ibuprofen-based systemic pain relievers, as well as topical pain relievers in
     France and the Netherlands).
(42) Patients experience pain in different forms, i.e., acute pain (for example,
     toothaches, muscle sprains), episodic pain (for example, headaches, menstrual
     pain, muscle strain) or chronic pain (for example, arthritis), and across different
     parts of the human body, such as in the head, muscles, bones, joints, or mouth.35
(43) OTC pain management products are designed to enable consumers to manage
     various symptoms of pain. These can be (i) topical pain treatments which treat
     pain symptoms locally by means of topical application to the skin, or (ii) systemic
     treatments which target pain centrally by means of oral intake.
     Commission’s precedents
(44) In past decisions, when assessing the relevant products markets, the Commission
     distinguished the two following types of products managing pain: (i) topical pain
     management (“TPM”) products, which target pain symptoms locally by means of
     topical application to the skin and (ii) systemic pain management (“SPM”)
     products, which treat pain in a systemic manner by way of oral intake producing
     effects on the entire body.
     The Notifying Party’s view
(45) While the Notifying Party insists that it internally approaches pain management
     products on an overall basis, it acknowledged the Commission’s decisional
                                                               36
     practice to distinguish TPM and SPM products.
     Commission’s assessment
(46) The market investigation did not provide indications that departing from previous
     Commission’s decisions would be appropriate in this case. Although some market
     respondents indicated that there may be a certain degree of demand-side
     substitutability between TPM and SPM products to cure local pain symptoms, the
     feedback from the market investigation supports the finding that TPM and SPM
     products are not substitutable to cure wider pain symptoms (i.e. TPM products are
     not appropriate to cure systemic pain symptoms).37 In addition, several market
     participants explained that there is currently a trend away from systemic solutions
     for the treatment of local pain, which translates in a greater reliance on TPM
     products, including non-medicated or natural solutions.38
     Conclusion
35   Commission decision of 28 January 2015 in case M.7276 – GlaxoSmithKline/ Novartis Vaccines
     Business (Excl. Influenza) / Novartis Consumer Health Business, paragraph 304.
36   Form CO, Chapter 3, Section 6, paragraph 4.
37   Replies to Q1 - Questionnaire to pharmacies and retailers, questions 11.1 and 11.6 and replies to
     Q3 - Questionnaire to competitors, question 13. See, e.g. retailer indicating that “SPM can be used
     instead of TPM, but not vice versa.”
38   Replies to Q3 - Questionnaire to competitors, question 13.1. Minutes of a call with a wholesaler
     dated 19 March 2019.
                                                   11
 ---pagebreak--- (47) On the basis of the elements described above, the Commission considers that
     TPM and SPM products should be assessed as separate product markets for the
     purposes of this Decision.
     3.1.2.     Topical pain management
(48) Both GSK and Pfizer CH offer TPM products in various EEA Member States.
     GSK owns in particular the leading range of Volta-branded products, available in
     various formats across the EEA: Volta-ren/-rol/-dol medicated gel, cream, spray,
     or patch (based on diclofenac), and the recently introduced Voltadol non-
     medicated (heat) patches, as well as Synthol/Syntholkiné products which include
     gels and liquids.39 For its part, Pfizer CH is mainly active in the TPM category
     through the ThermaCare brand, under which it predominantly markets a series of
     non-medicated heat patches in 16 Member States. Pfizer CH markets limited
     volumes of medicated gel in three EEA countries under the brands ThermaCare
     Schmerzgel (in Germany), as well as Kamol, AdvilMed gel and Advil Gel (in
     France and the Netherlands).
                3.1.2.1.      Product market definition
(49) As explained above, TPM products aim at managing pain by treating symptoms
     locally by means of topical application to the skin. Some TPM products are
     medicated, in the sense that they contain a pharmaceutical active ingredient (e.g.
     diclofenac for GSK’s Volta-branded products), while other TPM products are
     non-medicated, in the sense that they are based on chemical reactions (such as
     iron oxidation) or “natural” remedies (including homeopathic or herbal
     treatments).40 In addition, TPM products are available in various formats or
     delivery modes, primarily creams, gels, patches, and sprays.
(50) In terms of ATC classification, medicated TPM products are categorized under
     the ATC 3 class M2A (Topical Anti-rheumatics and Analgesics).41 This ATC
     class, as any other ATC class, only includes medicated products. The OTC
     classification, however, includes both medicated and non-medicated TPM
     products within the OTC 3 class 02E1 (Muscular Pain Relief Topical). This OTC
     class is broken down into six different OTC 4 categories, based on format or
     delivery mode. Table 1 below sets out the ATC 3 and OTC 3/4 classes relevant
     for topical pain management products.
39   GSK has also historically marketed a heat patch (only) in France under the Syntholkiné brand.
40   While medicated TPM products require a marketing authorisation to be sold in the EEA, non-
     medicated TPM products are typically classified as medical devices (which means that they do not
     require a marketing authorisation to be sold in the EEA but rather a CE mark).
41   This ATC 3 class is not further sub-divided into ATC 4 classes.
                                                      12
 ---pagebreak---                  Table 1 - TPM treatments – ATC/OTC Classes
ATC                                                                              OTC
Code                                                                             Code
                       Applied to Skin (Topical Products)
        Topical Anti-Rheumatics and
                                            Muscular Pain Relief Topical
                  Analgesics
                                            This OTC 3 class includes
        This ATC 3 class only includes
                                            medicated and non-medicated
             medicated products.
                                            products.
        This ATC 3 class is not broken
                                            This OTC 3 class is broken down
            down in ATC 4 classes.
                                            into the following OTC 4 codes:
                                                 02E1A Muscular Pain Relief
                                                  (Topical) - Aerosols/Sprays
M2A                                                                              02E1
                                                 02E1K Muscular Pain Relief
                                                  (Topical) - Kataplasma
                                                 02E1L Muscular Pain Relief
                                                  (Topical) - Liquids (Topical)
                                                 02E1O Muscular Pain Relief
                                                  (Topical) - Ointments/Creams
                                                 02E1W Muscular Pain Relief
                                                  (Topical) - Baths
                                                 02E1Z Muscular Pain Relief
                                                  (Topical) - Other Forms.
                            Source: Form CO, Chapter 3, Section 6
(51) The Commission notes that while the ATC 3 class M2A (Topical Antirheumatics
     and Analgesics) only includes medicated products (i.e. products containing an
     API such as diclofenac or ibuprofen), the OTC 3 class 02E1 (Muscular Pain
     Relief Topical) includes both medicated and non-medicated products (i.e.
     products based on “natural” remedies).
(52) In the present case, the Parties’ activities overlap in the EEA in relation to the
     OTC 3 class 02E1 (Muscular Pain Relief Topical) in the 16 EEA Member States
     where both Volta-branded products and ThermaCare are marketed (namely, all
     the Member States where Pfizer is active in the EAA: Austria, Belgium,
                                             13
 ---pagebreak---      Denmark, Finland, France, Germany, Ireland, Italy, Luxembourg, Malta,
     Netherlands, Norway, Portugal, Spain, Sweden and the United Kingdom).42
(53) In two out of these 16 EEA Member States, the Parties’ activities also overlap in
     relation to the ATC 3 class M2A (Topical Anti-rheumatics and Analgesics),
     namely France and the Netherlands where Pfizer CH markets the Advil and
     Kamol creams. Indeed, this ATC 3 class only contains medicated products (such
     as GSK’s Volta-branded creams and gels) and does not include non-medicated
     products (such as Pfizer's ThermaCare patches).
     Commission’s precedents
(54) In previous decisions, the Commission considered that it was appropriate to
     include in the relevant market all products classified under the ATC3 class M2A
     (Topical Anti-Rheumatics and Analgesics).43 This ATC3 class encompasses a
     large array of medicated ointments, creams and sprays for the treatment of
     injuries, sprains, muscular tension, etc., which are based on various active
     ingredients.44
(55) The Commission previously considered in some instances potential sub-
     segmentations within the ATC3 class M2A based on molecules, but ultimately
     left this question open.45
     The Notifying Party’s view
(56) The Notifying Party acknowledges that the Commission had previously defined
     topical pain management products under the ATC 3 class M2A (Topical
     Antirheumatics and Analgesics). However, as Pfizer CH’s ThermaCare is a non-
     medicated TPM product, which therefore falls outside of this ATC 3 class M2A
     but within the OTC 3 class 02E1, the Notifying Party provided data from OTC-
     IMS (OTC 3 class 02E1) for the purposes of the Commission’s assessment.46
42   Form CO, Chapter 3, Section 6, paragraphs 7 and 30. As explained in Form CO, Chapter 3,
     Section 6, paragraph 7, Pfizer CH has discontinued sales of ThermaCare since 2014 in two
     Member States ([…] and […]).
43   Commission decision of 9 November 2012 in case M.6706 – Procter & Gamble/ Teva
     Pharmaceuticals OTC II, paragraph 16; and Commission decision of 27 May 2005 in case
     M.3751 – Novartis/ Hexal, page 10. See also Commission decision of 29 June 2018 in case
     M.8889 – Teva / PGT OTC Assets, paragraph 41; and Commission decision of 28 January 2015 in
     case M.7276 – GlaxoSmithKline / Novartis Vaccines Business (Excl. Influenza) / Novartis
     Consumer Health Business, where the Commission ultimately left the market open, while finding
     it appropriate to assess the market on the basis of the ATC3 class M2A, and of the molecules
     within the ATC3 class M2A.
44   Commission decision of 28 January 2015 in case M.7276 – GlaxoSmithKline / Novartis Vaccines
     Business (Excl. Influenza)/ Novartis Consumer Health Business, paragraph 324; see also
     Commission decision of 27 May 2005 in case M.3751 – Novartis/ Hexal, page 10; Commission
     decision of 9 November 2012 in case M.6706 – Procter & Gamble/ Teva Pharmaceuticals OTC
     II, paragraph 16; Commission decision of 26 April 2004 in case M.3354 – Sanofi-
     Synthelabo/Aventis, paragraph 23; Commission decision of 29 June 2018 in case M.8889 – Teva/
     PGT OTC Assets, paragraph 39.
45   Commission decision of 29 June 2018 in case M.8889 - Teva / PGT OTC Assets, paragraph 43.
46   Form CO, Chapter 3, Section 6, paragraph 39.
                                                   14
 ---pagebreak--- (57) The Notifying Party insists that the OTC 3 class 02E1 encompasses highly
     differentiated products in terms of composition (medicated or not), format (gels,
     creams, patches, etc.), therapeutic indications (joint, muscle pain, etc.), usage,
     consumer perception, sales channels and pricing. While acknowledging national
     specificities, the Notifying Party claims that medicated gels are distant
     competitors to heat patches given (i) their different modes of action and
     administration, customer perception and usage, and regulatory requirements and
     (ii) their limited cross-price elasticity and supply-side substitution.47
     Commission’s assessment
(58) The results of the market investigation revealed that the vast majority of
     customers and competitors consider that TPM products are substitutable,
     regardless of their delivery mode (although different formats may reflect different
     consumer preferences) or of their underlying molecule.48
(59) The majority of respondents to the market investigation, both customers and
     competitors, also indicated that medicated and non-medicated TPM products are
     interchangeable for consumers.49 For instance, a UK-based retailer explained that
     “there is a lack of education for medicated vs. non-medicated”.50 Similarly,
     competitors explained that “patients do not necessarily know which patches are
     medicated or non medicated” and that “medicated and non-medicated patches are
     clustered in the same subcategory by OTC market analysts (e.g. Nicholas Hall),
     as these might alternatively be used by patients”.51 Moreover, it results from the
     market investigation that the degree of substitutability between medicated and
     non-medicated TPM products appears even stronger when looking a specific
     TPM delivery mode (e.g. patches). […].52
(60) From a supply-side perspective, the Commission notes that numerous TPM
     producers are offering TPM products in different formats. In addition, several
     TPM producers active in the EEA supply offer both medicated and non-
     medicated products, including Beiersdorf and Reckitt Benckiser, in addition to
     the Parties.
(61) Lastly, the market investigation revealed that a segmentation between adult and
     paediatric products is not relevant in the TPM space and that, generally, “TPM
     products are for adult populations”.53
(62) Therefore, for the purposes of this Decision, the Commission concludes that the
     scope of the relevant product market in relation to the topical pain management
47   Form CO, Chapter 3, Section 6, paragraphs 40-42.
48   Replies to Q1 - Questionnaire to pharmacies and retailers, questions 11.2 and 11.3.
49   Replies to Q1 - Questionnaire to pharmacies and retailers, question 11.4. and Replies to Q3 -
     Questionnaire to competitors, question 14.3.
50   Replies to Q1 - Questionnaire to pharmacies and retailers, question 11.6.
51   Replies to Q3 - Questionnaire to competitors (e.g. question 15.1).
52   Replies to Q3 - Questionnaire to competitors (e.g. question 15.1).
53   Replies to Q3 - Questionnaire to competitors, question 12.2.
                                                    15
 ---pagebreak---      category amounts to the 02E1 OTC 3 class, which includes Muscular Pain Relief
     Topical, both medicated and non-medicated.
                3.1.2.2.     Geographic market definition
(63) As explained in Section IV.1 of this Decision, the Commission has consistently
     defined the geographic markets for finished dose pharmaceutical product as being
     national in scope.54 In particular, the Commission has consistently defined TPM
     product markets as national in scope,55 along with other markets defined on the
     basis of OTC classes.56
(64) The market investigation in this case did not provide any indications that such
     market definition should be revisited, in particular in view of the differences
     among EEA Member States in price-setting, regulatory regimes, channels of
     distribution, and competitive landscape.
(65) Therefore, for the purposes of this Decision, the Commission concludes that the
     geographical scope of the topical pain management markets is national.
                3.1.2.3.     Competitive assessment
(66) In the topical pain area, the Transaction gives rise to affected markets with regard
     to OTC-to-OTC overlaps in the OTC 3 class 02E1 (Muscular Pain Relief
     Topical). In this product market, the Parties’ activities overlap in the 16 Member
     States where Pfizer CH is active,57 and give rise to affected markets in following
     ten Member States:
           Eight Group 1 affected markets in Austria, Belgium, Germany, Ireland,
            Italy, Netherland, Portugal, and the UK; and
           Two Group 3 affected markets in France and Spain.
(67) In line with the reasoning provided in paragraph 34 of the Decision, Group 3
     markets will not be discussed in this Decision.58
54   See most recently Commission decision of 20 November 2018 in case M.8955 - Takeda / Shire,
     paragraphs 56 to 59.
55   See Commission decision of 28 January 2015 in case M.7276 – GlaxoSmithKline / Novartis
     Vaccines Business (Excl. Influenza) / Novartis Consumer Health Busines; M.6705, Procter &
     Gamble/Teva Pharmaceuticals OTC II, Commission decision of 27 May 2005 in case M.3751 -
     Novartis/Hexal; Commission decision of 29 June 2018 in case M.8889 - Teva / PGT OTC Assets.
56   See, e.g., Commission decision of 29 June 2018 in case M.8889 - Teva / PGT OTC Assets,
     paragraphs 29-31 and Commission decision of 4 August 2016 in case M. 7919 - Sanofi/
     Boehringer Ingelheim Consumer Healthcare Business, paragraphs 26-29.
57   Namely, Austria, Belgium, Denmark, Finland, France, Germany, Ireland, Italy, Luxembourg,
     Malta, Netherlands, Norway, Portugal, Spain, Sweden and the United Kingdom.
58   Group 3 markets arise for Muscular Pain Relief Topical (OTC 3 class 02E1) in France and Spain.
     Regarding the French market, the Parties’ combined market shares reached [20-30]%, [20-30]%,
     and [20-30]% by value in, respectively, 2016, 2017 and 2018. Pfizer CH’s increment amounted to
     [0-5]%, [0-5]%, and [0-5]% by value in, respectively, 2016, 2017 and 2018. Regarding the
     Spanish market, the Parties’ combined market shares reached [30-40]%, [30-40]%, and [30-40]%
                                                    16
 ---pagebreak--- (68)   In addition, the Transaction does not give rise to affected markets in any other
       EEA Member States in relation to OTC-to-Rx overlaps.59 Moreover, as Pfizer CH
       does not market any Rx topical pain management product, the Transaction does
       not give rise to affected markets under any plausible market definition as regards
       Rx-to-Rx in the topical pain area.
Austria – Muscular Pain Relief Topical (OTC 3 – 02E1)
(69)   In Austria, the Transaction gives rise to a Group 1 market for Muscular Pain
       Relief Topical (OTC 3 class 02E1).
(70)   In this market, GSK markets Voltadol and Voltadol Pflaster, two medicated
       preparations that contain the active ingredient diclofenac and that are respectively
       available in the form of gel and patch (also known as “plaster”), while Pfizer CH
       markets ThermaCare, a single-use patch (also known as “ wrap”) based on heat
       cell technology.60 Until [Date], Pfizer CH also supplied in Austria a diclofenac-
       based medicated gel under the brand name ThermaCare Schmerzgel.61
(71)   Table 2 below presents the market shares of the Parties and their competitors over
       the past three years (i.e., 2016, 2017, and 2018) in Austria for Muscular Pain
       Relief Topical.
       by value in, respectively 2016, 2017 and 2018. Pfizer CH’s increment amounted to [0-5]%, [0-
       5]%, and [0-5]% by value, in, respectively, 2016, 2017, and 2018. Irrespective of whether the
       Transaction raises doubts as to its compatibility with the internal market as regards TPM products
       in France and/or in Spain, the Commitments offered by the Parties remove the overlap between
       GSK and Pfizer CH in this market (almost entirely in France and entirely in Spain), thereby
       addressing any possible competition concerns.
59     In relation to OTC-to-Rx overlaps, the Transaction gives rise to affected markets in the ATC 3
       class M2A in three Member States, namely in Austria (Group 2), France (Group 3) and Germany
       (Group 3). For the purposes of the Decision, the Commission will not discuss further these
       potential markets as Pfizer CH does not have any Rx products and the impact of the Transaction
       for OTC topical pain management is discussed in Section IV.3.1.2 of this Decision. In any event,
       irrespective of whether the Transaction raises serious doubts as to its compatibility with the
       internal market as regards Rx and OTC TPM products in Austria, France, and Germany, the
       Commitments offered by the Parties remove the overlap between GSK and Pfizer CH, entirely in
       Austria and Germany, and almost entirely in France, thereby addressing any possible competition
       concerns.
60     The heat cells contain iron, coal, water, and salt that react with air. The chemical reaction, called
       iron oxidation, provides low-level heat, which increases blood flow and accelerates the body’s
       natural healing process. ThermaCare heat wraps are generally used for back, neck, muscle, joint
       and menstrual pain.
61     For the sake of completeness, the Commission notes that Pfizer also sells Feldene Gel, a
       medicated topical analgesic in Austria. However, Feldene Gel, which is only sold Rx, is excluded
       from the scope of the Transaction and will not be transferred to GSK.
                                                        17
 ---pagebreak---  ---pagebreak--- (74) The Parties’ combined market share in Austria over the past three years are high
     (reaching [50-60]%, [50-60]%, and [50-60]% by value, respectively in 2016,
     2017, and 2018). Moreover, contrary to the Notifying Party’s assertion, the
     market share contributed by Pfizer CH in this market is material (reaching [10-
     20]%, [10-20]%, and [10-20]%by value in, respectively, 2016, 2017 and 2018).
(75) Conversely, the market shares of the Parties’ competitors in Austria remain
     limited, especially when comparing with the Parties’ position in this Member
     State. Post-Transaction, the market share of the Combined CH Business’ first
     competitor, namely Merck, which was acquired in December 2018 by Procter &
     Gamble,65 would amount to only [5-10]% (by value). None of the other market
     players active in TPM in Austria had market shares exceeding [5-10]% (by value)
     over the past three years.
(76) On this basis, the market share data indicate that post-Transaction, the Combined
     CH Business will have very high market shares and benefit from a distant
     leadership position in the topical pain management area (i.e. the Transaction will
     result in a significant gap between the merged entity, which will be the market
     leader, and the other topical pain management suppliers). The Transaction would
     eliminate a significant competitor and reinforce the distant leadership of GSK
     pre-Transaction, the market leader, over the other topical pain management
     suppliers. The Combined CH Business’ distant leadership will also increase in
     terms of product offering as, with the Transaction, GSK will acquire an additional
     TPM product format (i.e. a well-established non-medicated heat patch).
(77) The results of the market investigation have confirmed that market participants
     consider GSK’s Volta-brand and Pfizer’s ThermaCare as two leading brands in
     the TPM category in various EEA countries, and notably in Austria. 66 For
     instance, numerous competitors identified GSK and Pfizer CH as their top
     competitors in the TPM market in Austria.67 […].68 In addition, the majority of
     Austrian retailers, pharmacies, wholesalers and buying groups view the Parties’
     brands as “must-have” TPM products, i.e. products that they have to offer in their
     pharmacy to meet patients’ demand.69 Moreover, all the Austrian wholesalers and
     buying groups who responded to the market investigation identified Pfizer’s
     products amongst their three best-selling products in TPM in Austria in 2018.70 In
     addition, the Parties’ TPM products benefit from brand loyalty as the majority of
     wholesalers and buying groups operating in Austria expect that customers would
65   See Commission decision of 27 August 2018 in case M.8974 – Procter & Gamble/Merck
     Consumer Health Business.
66   Replies to Q1 - Questionnaire to pharmacies and retailers (e.g. questions 12, 24; and 25); replies
     to Q2 - Questionnaire to wholesalers and buying groups (e.g. questions 18, 19, and 20); and
     replies to Q3 - Questionnaire to competitors (e.g. question 19).
67   Replies to Q3 - Questionnaire to competitors, question 19.
68   Replies to Q3 - Questionnaire to competitors, questions 19.1.
69   Replies to Q1 - Questionnaire to pharmacies and retailers, questions 24 and 25. Replies to Q2 -
     Questionnaire to wholesalers and buying groups, questions 19.2 and 20.2).
70   Replies to Q2 - Questionnaire to wholesalers and buying groups, question 18.
                                                     19
 ---pagebreak---      not switch to alternative products, even in case of a 5-10% price increase of the
     Parties’ TPM product .71
(78) Moreover, contrary to the Notifying Party’s claim, the results of the market
     investigation revealed a close competitive interaction between ThermaCare and
     Volta-branded products in general, and to a stronger extent in relation to patches.
     In Austria, for instance, several Austrian retailers and pharmacies indicated that
     they could recommend a ThermaCare product instead of a Voltaren product (and
     vice versa).72 In addition, all the Austrian retailers and pharmacies indicated that
     they could recommend ThermaCare instead of a GSK non-medicated patch (a
     product that GSK has started to launch in the EEA but not in Austria to date).73
(79) In this context, the Commission notes that the vast majority of competitors that
     responded to the market investigation, as well as numerous customers, believe
     that the Transaction will have a negative impact on the TPM segment. For
     instance, competitors warned of the risks that “prices will increase because the
     top competitor market share will be so strong that it will become a price
     maker”.74 The results of the market investigation also pointed out to the risk that
     prices to customers would increase via the reduction of rebates, which would
     eventually be paid for by end-consumers.75
(80) Several competitors expressly mentioned that the Transaction would have a
     strong impact on the TPM market in Austria. According to competitors, in
     Austria, “GSK and Pfizer will achieve a dominant market position in the TPM
     category”76 and the Transaction will have a “significant impact on competition”,
     including because there will be “less competitive products on the market”.77
(81) A majority of Austrian customers (pharmacies, retailers, wholesalers and buying
     groups) that responded to the market investigation consider that in Austria the
     Transaction will likely lead to an increase of TPM prices, including due to lesser
     rebates granted to pharmacies, a decrease of TPM choices for end-consumers, and
     a reduced visibility of third party’s products in pharmacies and retailers’
     shelves.78
(82) Respondents to the market investigation also indicated that the Combined CH
     Business’ market power will be reinforced by high barriers to entry or expansion.
     Competitors consider the TPM Austrian market is characterised by high barriers
71   Replies to Q2 - Questionnaire to wholesalers and buying groups (e.g. question 23).
72   Replies to Q1 - Questionnaire to pharmacies and retailers, questions 15-19.
73   Replies to Q1 - Questionnaire to pharmacies and retailers, question 17.
74   Replies to Q3 – Questionnaire to competitors, question 29.
75   Replies to Q2 – Questionnaire to wholesalers and buying groups, question 29; Replies to Q3
     Questionnaire to competitors, question 29.
76   Replies to Q3 – Questionnaire to competitors, question 27.
77   Replies to Q3 – Questionnaire to competitors, question 29.1.
78   Replies to Q1 - Questionnaire to pharmacies and retailers, question 28; replies to Q2 -
     Questionnaire to wholesalers and buying groups, e.g. question 24; and replies to Q3 –
     Questionnaire to competitors, e.g. question 31.
                                                     20
 ---pagebreak---  ---pagebreak---      Supplier                 2016                          2017                        2018
                        Value       Volume           Value       Volume         Value         Volume
Stada                  [0-5]%        [0-5]%         [0-5]%       [0-5]%        [0-5]%         [0-5]%
Others                [5-10]%      [10-20]%        [5-10]%      [10-20]%      [5-10]%        [10-20]%
Total                 100,0%        100,0%         100,0%        100,0%        100,0%         100,0%
                                   Source: Form CO, Chapter 3, Section 6
         The Notifying Party’s view
  (87)   The Notifying Party argues that the Transaction does not raise competition
         concerns in Belgium for topical pain products because the Parties’ product
         offerings in this market would be highly differentiated and distant competitors,
         especially because GSK only offers medicated products while Pfizer’s
         ThermaCare is a non-medicated patch.81 The Notifying Party also insists that
         [Information on product launch strategy] and that its medicated patch represents
         only [0-5]% share of the market in 2018 (by value).
  (88)   In addition, the Notifying Party argues that the Transaction does not raise
         competition concerns in Belgium because, in the medicated TPM segment, the
         Combined CH Business will continue to face competition from a number of
         competitors. The Notifying Party also argues that Pfizer’s ThermaCare is
         constrained by a number of alternative non-medicated patches and performs
         poorly.82
         Commission’s assessment
  (89)   The Commission notes that the Parties’ combined market share in Belgium over
         the past three years are very high (reaching [60-70]%, [60-70]%, and [50-60]%
         by value, in, respectively, 2016, 2017 and 2018) even though Pfizer CH’s
         increment remains limited ([0-5]%, [0-5]%, and [0-5]% by value in, respectively,
         2016, 2017 and 2018).83
  (90)   In Belgium, the market shares of the Parties’ competitors are limited, especially
         when compared with the Parties’ position. Post-Transaction, the market share of
         the Combined CH Business’ first competitor, i.e. namely Klosterfrau, would
         amount to only [5-10]% (by value in 2018). Merck would be the only other player
         active in TPM in Belgium with a market share exceeding [5-10]% (by value) over
         the past three years.
  (91)   On this basis, the market share data indicate that, post-Transaction, the Combined
         CH Business will have very high market shares and benefit from a distant
         leadership position in the TPM market. The Transaction will eliminate one
  81     Form CO, Chapter 3, Section 6, paragraphs 11 and 140.
  82     Form CO, Chapter 3, Section 6, paragraph 140.
  83     See e.g., Commission decision of 4 August 2015 in case M.7559 - Pfizer/Hospira, paragraphs
         172-179 and 245-249, where the concentration raised serious doubts in relation to markets for
         which the increment was below 5%.
                                                       22
 ---pagebreak---      competitor, which shares are limited but is otherwise a global-scale competitor.
     The market share data therefore indicate that the Transaction further reinforces
     the Combined CH Business’ distant leadership in Belgium, even though Pfizer
     CH’s increment remains limited. The Combined CH Business’ distant leadership
     will also increase in terms of product offering as, with the Transaction, GSK will
     acquire an additional TPM product format (i.e. non-medicated heat patch).
(92) The results of the market investigation have confirmed that the Notifying Party
     has a strong leadership on the TPM market in Belgium, which will be further
     reinforced by the Transaction. For instance, the Volta-branded products are
     recurrently quoted by retailers as the number one recommendation by
     pharmacists.84 While it results from the market investigation that ThermaCare’s
     is less strong than GSK’s Volta-branded products, Pfizer CH’s products are
     however quoted within pharmacists’ top-5 recommendation.85 In addition, some
     Belgium customers (retailers, pharmacies, wholesalers and buying groups)
     indicated that they view Pfizer’s products as “must-have”.86 In addition, a
     majority of Belgian intermediary customers (i.e., wholesalers and buying groups)
     expect that, in case of 5-10% price increase of the Parties’ TPM products,
     customers would not switch their orders from the Parties towards alternative
     products, especially because “brand awareness” plays a strong role in Belgium.87
(93) Moreover, contrary to the Notifying Party’s claim, the results of the market
     investigation revealed that there is a degree of competitive closeness between
     ThermaCare and Volta-branded products in Belgium as some respondents
     (retailers and pharmacies) indicated that they could recommend a Pfizer CH TPM
     product instead of a GSK TPM product (and vice versa).88 In addition, the vast
     majority of Belgian retailers and pharmacies indicated that they could recommend
     ThermaCare instead of a GSK non-medicated patch (a product that GSK has
     started to launch in the EEA but not in Belgium to date).89 Moreover, half of the
     wholesalers and buying groups that responded to the market investigation cited
     ThermaCare as one of the three next-best selling alternative to a GSK product.90
(94) In this context, the Commission further notes that, as explained above in
     paragraph 79, the vast majority of competitors that responded to the market
     investigation, as well as numerous customers, believe that the Transaction will
     have a negative impact on the TPM segment. In addition, a number of customers
     (pharmacies, retailers, wholesalers and buying groups) active in Belgium consider
84   Replies to Q1 - Questionnaire to pharmacies and retailers, questions 12.
85   Replies to Q1 - Questionnaire to pharmacies and retailers, question 12.
86   Replies to Q1 - Questionnaire to pharmacies and retailers, question 25. Replies to Q2 –
     Questionnaires to wholesalers and buying groups, question 19.2.
87   Replies to Q2 – Questionnaires to wholesalers and buying groups, question 23.
88   Replies to Q1 - Questionnaire to pharmacies and retailers, question 18.
89   Replies to Q1 - Questionnaire to pharmacies and retailers, question 17.
90   Replies to Q2 – Questionnaire to wholesalers and buying groups, question 20.1.1.
                                                   23
 ---pagebreak---  ---pagebreak---      Supplier                   2016                         2017                 2018
                        Value          Volume          Value      Volume    Value      Volume
 Stada                 [0-5]%          [0-5]%         [0-5]%      [0-5]%   [0-5]%      [0-5]%
 Boehringer Ingel      [0-5]%          [0-5]%         [0-5]%      [0-5]%   [0-5]%      [0-5]%
 Others               [10-20]%       [10-20]%       [10-20]%     [10-20]% [10-20]%    [10-20]%
 Total                 100,0%          100,0%         100,0%      100,0%   100,0%      100,0%
                                  Source: Form CO, Chapter 3, Section 6
        The Notifying Party’s view
(98)    According to the Notifying Party, the Transaction does not raise competition
        concerns in Germany for topical pain products because the best-selling products
        of GSK (Voltaren gel) and Pfizer CH (ThermaCare heat patch) are not close
        competitors as one is a medicated gel while the other is a non-medicated patch. In
        addition, the German TPM market is dynamic with multiple entries in all product
        sub-categories.92
(99)    The Notifying Party also insists that ThermaCare plays only a very limited role in
        the TPM market in Germany as would be illustrated by Pfizer’s low market share
        by volume.93 In addition, the Notifying Party argues that the Transaction does not
        raise serious competition concerns in Germany as the medicated gel segment
        would be dynamic and, in the patch segment, ThermaCare’s main competitor is
        Beiersdorf, not GSK.
        Commission’s assessment
(100) The Commission notes that Parties’ combined market share in Germany over the
        past three years are very high (reaching [50-60]%, [50-60]%, and [50-60]% by
        value, respectively in 2016, 2017, and 2018). Moreover, Pfizer CH’s increment in
        this market is also material ([10-20]%, [10-20]%, and [10-20]%, by value,
        respectively in 2016, 2017, and 2018).
(101) Conversely, the market shares of the Parties’ competitors in Germany remain
        limited, especially when compared with the Parties’ position. Post-Transaction,
        the market share of the Combined CH Business’ first competitor, namely Merck,
        would amount to only [5-10]% (by value) in 2018. Merck would be the only other
        player active in topical pain management in Germany with market shares
        exceeding [5-10]% (by value) over the past three years.
(102) On this basis, the market share data indicate that post-Transaction, the Combined
        CH Business will have very high market shares and benefit from a distant
        leadership position in the topical pain management area in Germany. The
        Transaction would eliminate a significant competitor to GSK and reinforce the
        gap between the market leader and the other topical pain management suppliers.
(103) The results of the market have investigation has confirmed that the Parties’
        products have a strong leadership on the TPM market in in Germany. In
92      Form CO, Chapter 3, Section 6, paragraph 149.
93      Form CO, Chapter 3, Section 6, paragraph 125.
                                                      25
 ---pagebreak---       Germany, the Volta-branded and ThermaCare products are top TPM products.
      The vast majority of German pharmacies and retailers, and all the German
      wholesalers, and buying groups view the Parties’ brands as must-have products.94
      It results from the market investigation that Volta-branded products are widely
      mentioned as the number one recommendation by pharmacists, while
      ThermaCare products appear in the top 5 of recommendations.95 In addition, a
      majority of (intermediary) customers active in Germany expect that customers
      would not switch their orders from the Parties towards alternative products, even
      in case of 5-10% price increase of the Parties’ TPM products.96 On this note,
      German customers indicated that end-consumer’s brand awareness and loyalty is
      very strong in the TPM market in Germany.97
(104) In addition, the results of the market investigation revealed that there is close
      competitive interaction between ThermaCare and Volta-branded products.98 The
      vast majority of German retailers and pharmacies consider GSK products
      amongst the most suitable alternatives to ThermaCare, while ThermaCare
      products appear in the most suitable alternatives to Volta-branded products.99 The
      vast majority of German retailers indicated that they could recommend a Pfizer
      CH TPM product instead of Voltaren.100 Similarly, all German retailers
      responded that they could recommend a Pfizer CH TPM product instead of the
      GSK (recently launched) non-medicated patch.101
(105) The market investigation also revealed that the Combined CH Business would
      benefit from a distant leadership position, not only in terms of shares of sales, but
      also in terms of TPM portfolio as it would offer successful products in the form
      of gel/cream, spray, and medicated and non-medicated patches.
(106) In this context, the Commission further notes that, as explained above in
      paragraph 79, the vast majority of competitors that responded to the market
      investigation, as well as numerous customers, believe that the Transaction will
      have a negative impact on the TPM segment.
(107) In addition, several competitors expressly mentioned Germany as a Member State
      where the Transaction would have a significant impact on the TPM market.
      According to competitors, in Germany, the Transaction will have a “significant
      impact on competition”102 and “lead to more market and trade control” 103 from
94    Replies to Q1 - Questionnaire to pharmacies and retailers, questions 24 and 25. Replies to Q2 -
      Questionnaire to wholesalers and buying groups, questions 19.2 and 20.2.
95    Replies to Q1 - Questionnaire to pharmacies and retailers, question 12.
96    Replies to Q2 - Questionnaire to pharmacies and retailers, question 23.
97    Replies to Q1 - Questionnaire to pharmacies and retailers, question 23.
98    Replies to Q1 - Questionnaire to pharmacies and retailers, question 17.
99    Replies to Q1 - Questionnaire to pharmacies and retailers, question 14.
100   Replies to Q1 - Questionnaire to pharmacies and retailers, questions 15-17.
101   Replies to Q1 - Questionnaire to pharmacies and retailers, questions 18-19.
102   Replies to Q3 - Questionnaire to competitors, question 27.1.
103   Replies to Q3 - Questionnaire to competitors, question 28.1.
                                                     26
 ---pagebreak---       the merged entity for the following reasons: First, the results of the market
      investigation pointed out to risks of price increases for TPM products in
      Germany. This concern was relayed by German customers (pharmacies, retailers
      and intermediaries)104, as well as competitors105, one of which expecting that
      GSK “will further increase prices going forward”106 given its high market share
      and the fact that generic competition plays “only a minor role”. Second, the
      results of the market investigation revealed concerns of lesser choice of TPM
      products in Germany. This concern was relayed by German customers 107, as well
      as competitors, one of which “expect that the customers will have less choice
      between relevant TPM products”.
(108) Respondents to the market investigation have also indicated that the Combined
      CH Business’ market power will be reinforced by high barrier to entry. A
      German-based competitor for instance explained that in the TPM segment post-
      Transaction, “the market entry for other competitors will be significantly
      impeded”. According to the majority of customers, brand awareness and loyalty
      constitute the main barrier to enter the TPM segment in Germany108. Competitors
      confirmed that building brand awareness requires a very high level of investment,
      including in the patch segment.109 As explained by a large-scale competitor,
      “considerable financial resources as well as R&D/regulatory efforts are needed
      to build a new brand in any of the mentioned markets” and “financial limitation
      to build up a new brand requires > 5yrs ROI”.
(109) It further results from the market investigation that the Transaction risks to have a
      stronger negative impact of the Transaction in the patch sub-segment. As
      described above, the Parties are both active in this growing sub-segment and
      barriers to enter the patch segment were described by competitors as higher than
      to enter the other TPM product-segments because “registration and
      manufacturing task need to be performed and take >3 yrs aprox”.
(110) In view of the above and of all available evidence, the Commission concludes that
      the Transaction raises serious doubts as to its compatibility with the internal
      market as regards TPM products in Germany, as the Transaction would lead to a
      creation or strengthening of dominance in this market. However, the
      commitments offered by the Parties remove most of the overlap between GSK
      and Pfizer CH in this market, thereby addressing the competition concerns
      identified.
104   Replies to Q1 - Questionnaire to pharmacies and retailers, questions 28.1 and 28.2 and Replies to
      Q2, Questionnaire to wholesalers and buying groups, question 24.2 and 24.3.
105   Replies to Q3 - Questionnaire to competitors, question 28.
106   Replies to Q3 - Questionnaire to competitors, question 29.1.
107   Replies to Q1 - Questionnaire to pharmacies and retailers, questions 28.3 and Replies to Q2,
      Questionnaire to wholesalers and buying groups, question and 24.4.
108   Replies to Q1 - Questionnaire to pharmacies and retailers, question 23.
109   Replies to Q3 - Questionnaire to competitors, question 25.
                                                     27
 ---pagebreak---  ---pagebreak--- (116) In addition, the Notifying Party argues that no competition concerns will arise
      post-Transaction in Ireland for topical pain products because: (i) in the medicated
      product sub-segment, there is no overlap between the Parties and the Combined
      CH Business will continue to face the presence of significant competitors such as
      Diclac, Ibugel and Nurofen; and (ii) in the non-medicated product sub-segment,
      which is relatively narrow, Pfizer CH does not view GSK’s heat patch as a strong
      competitor, unlike Deep Heat, Boots and other private label products.112
      Commission’s assessment
(117) The Parties’ combined market share in Ireland over the past three years are very
      high (reaching [50-60]%, [60-70]%, and [50-60]% by value, respectively in 2016,
      2017, and 2018). Moreover, Pfizer CH’s increment in this market is material
      (reaching [10-20]%, [10-20]%, and [10-20]% by value, respectively in 2016,
      2017, and 2018).
(118) Conversely, the market shares of the Parties’ competitors in Ireland remain
      limited, especially when compared to the Parties’ position. Post-Transaction, the
      market share of the Combined CH Business’ first competitor, namely Rohto,
      would amount to [10-20]% (by value) in 2018. Only two other players active in
      topical pain management in Ireland had market shares exceeding [5-10]% (by
      value) over the past three years (namely Dermal and Reckitt Benckiser, whose
      respective shares were lower than [5-10]%).
(119) On this basis, the market share data indicate that post-Transaction, the Combined
      CH Business will have very high market shares and benefit from a distant
      leadership position in the topical pain management area. The Transaction would
      eliminate a significant competitor to GSK and therefore reinforce further the gap
      between the market leader and the other TPM suppliers.
(120) The results of the market investigation have confirmed that the Parties’ products
      have a leadership position on the TPM market in the EEA, including in Ireland. In
      Ireland, several retailers and pharmacies indicated that they consider GSK and
      Pfizer’s TPM products as must-have products.113 Moreover, Voltarol is widely
      mentioned as the number one recommendation by pharmacists, while
      ThermaCare products appear in the top 5 of recommendations.114 Moreover, all
      the wholesalers and buying groups that responded to the market investigation
      cited ThermaCare amongst their 3 best-selling products in the TPM space in
      Ireland.115
(121) Moreover, contrary to the Notifying Party’s claim, the results of the market
      investigation revealed a close competitive interaction between GSK and Pfizer
      CH’s TPM products in general, and in particular in relation to patches. Thus, Irish
      retailers and pharmacies indicated that they would recommend ThermaCare
112   Form CO, Chapter 3, Section 6, paragraph 173.
113   Replies to Q1 - Questionnaire to pharmacies and retailers, questions 24-25.
114   Replies to Q1 - Questionnaire to pharmacies and retailers, question 12.
115   Replies to Q2 - Questionnaire to wholesalers and buying groups, question 18.
                                                     29
 ---pagebreak---  ---pagebreak---      Supplier                  2016                         2017                   2018
                        Value        Volume           Value      Volume      Value      Volume
Ibsa                  [5-10]%         [0-5]%        [5-10]%       [0-5]%   [5-10]%       [0-5]%
Bayer                 [5-10]%        [5-10]%        [5-10]%      [5-10]%   [5-10]%      [5-10]%
Recordati             [5-10]%         [0-5]%        [5-10]%       [0-5]%    [0-5]%       [0-5]%
Pharmanutra            [0-5]%         [0-5]%         [0-5]%       [0-5]%    [0-5]%       [0-5]%
Chiesi                 [0-5]%         [0-5]%         [0-5]%       [0-5]%    [0-5]%       [0-5]%
Mediolanum             [0-5]%         [0-5]%         [0-5]%       [0-5]%    [0-5]%       [0-5]%
Menarini               [0-5]%         [0-5]%         [0-5]%       [0-5]%    [0-5]%       [0-5]%
Boiron                 [0-5]%         [0-5]%         [0-5]%       [0-5]%    [0-5]%       [0-5]%
Mylan                  [0-5]%         [0-5]%         [0-5]%       [0-5]%    [0-5]%       [0-5]%
Theiss                 [0-5]%         [0-5]%         [0-5]%       [0-5]%    [0-5]%       [0-5]%
naturwaren
Esi                    [0-5]%         [0-5]%         [0-5]%       [0-5]%    [0-5]%       [0-5]%
Guna                   [0-5]%         [0-5]%         [0-5]%       [0-5]%    [0-5]%       [0-5]%
Dompe                  [0-5]%         [0-5]%         [0-5]%       [0-5]%    [0-5]%       [0-5]%
Pietrasanta            [0-5]%         [0-5]%         [0-5]%       [0-5]%    [0-5]%       [0-5]%
pharma
Others               [10-20]%       [10-20]%       [10-20]%     [20-30]%  [10-20]%     [20-30]%
Total                 100,0%         100,0%         100,0%       100,0%    100,0%       100,0%
                                    Source: Form CO, Chapter 3, Section 6
  The Notifying Party’s view
  (127) According to the Notifying Party, the Transaction does not raise competition
          concerns in Italy for topical pain products because the Parties’ main products are
          not close substitutes. The Notifying Party insists that there is no overlap between
          the Parties in the medicated product segment, for which GSK does not view
          ThermaCare as a closely competing product, and considers that there are
          numerous alternatives.
  (128) In addition, the Notifying Party argues that in the narrower heat patch segment,
          Voltaren Termico is just one of a range of competitors (including Lasonil Termico
          and Calmadol).
  (129) The Notifying Party also insists that the Parties’ shares are lower on the basis of
          volume data.120
  Commission’s assessment
  (130) The Parties’ combined market share in Italy over the past three years are high
          (reaching [40-50]%, [40-50]%, and [40-50]% by value, respectively in 2016,
          2017, and 2018). Moreover, Pfizer CH’s increment in this market is material
          (reaching [5-10]%, [5-10]%, and [5-10]% by value, respectively in 2016, 2017,
          and 2018).
  120     Form CO, Chapter 3, Section 6, paragraph 185.
                                                        31
 ---pagebreak--- (131) Conversely, the market shares of the Parties’ competitors in Italy remain limited,
      especially when compared to the Parties’ position. Post-Transaction, the market
      share of the Combined CH Business’ first competitor, i.e. namely Alfasigma,
      would amount to [5-10]% (by value) in 2018.
(132) On this basis, the market share data indicate that post-Transaction, the Combined
      CH Business will have high market shares and benefit from a distant leadership
      position in the topical pain management area, while the Transaction would
      eliminate a significant competitor and therefore further reinforce the gap between
      the market leader and the other topical pain management suppliers.
(133) The results of the market investigation have confirmed that the Parties’ products
      have a strong leadership on the TPM market in Italy. For instance, numerous
      competitors indicated that GSK and Pfizer were their top competitors in the TPM
      segment in Italy.121 A competitor commented that the Parties would have a
      “dominant position in TPM”. In addition, the vast majority of Italian customers
      view the Parties’ brand as must-have products.122 Italian pharmacies and retailers
      mentioned both GSK and Pfizer CH’s TPM products as part of the top-5 TPM
      products they would recommend to patients.123 The Parties’ TPM products
      benefit from brand loyalty in Italy as a majority of (intermediary) customers
      expect that, in case of 5-10% price increase of the Parties’ TPM products, (retail)
      customers would not switch their orders from the Parties towards alternative
      products.124 More generally, many market respondents insisted on the strong role
      of “brand loyalty” in the TPM space in Italy.125
(134) Moreover, contrary to the Notifying Party’s claim, the results of the market
      investigation revealed a close competitive interaction between ThermaCare and
      the Volta-branded products, in particular in relation to patches. For instance,
      several Italian retailers and pharmacies indicated that they could recommend
      ThermaCare instead of a Voltaren product (and vice versa), and even more so
      instead of a Voltaren patch (and vice versa).126 In addition, the results of the
      market investigation indicate that ThermaCare constitutes one of the most
      suitable alternatives to Volta-branded products for retailers and pharmacies (and
      vice versa).127
(135) In this context, the Commission further notes that, as explained in paragraph 79,
      the vast majority of competitors that responded to the market investigation, as
      well as numerous customers, believe that the Transaction will have a negative
      impact on the TPM segment. Regarding Italy in particular, market respondents
      indicated that the Transaction will have a “significant impact on competition”;
121   Replies to Q3 - Questionnaire to Competitors, question 19.
122   Replies to Q1 - Questionnaire to pharmacies and retailers, questions 24 and 25. Replies to Q2 -
      Questionnaire to wholesalers and pharmacies, questions 19.2 and 20.2.
123   Replies to Q1 - Questionnaire to pharmacies and retailers, question 19.
124   Replies to Q2 – Questionnaires to wholesalers and buying groups, question 23.
125   Replies to Q1 - Questionnaire to pharmacies and retailers, question 23.1.
126   Replies to Q1 - Questionnaire to pharmacies and retailers, questions 1519.
127   Replies to Q1 - Questionnaire to pharmacies and retailers, questions 13 and 14.
                                                     32
 ---pagebreak---  ---pagebreak---       Supplier                  2016                          2017                  2018
                         Value         Volume          Value       Volume     Value      Volume
 OTC medical           [5-10]%        [5-10]%        [5-10]%       [0-5]%   [5-10]%      [0-5]%
 Perrigo               [5-10]%         [0-5]%        [5-10]%       [0-5]%    [0-5]%      [0-5]%
 Biohorma               [0-5]%         [0-5]%         [0-5]%       [0-5]%    [0-5]%      [0-5]%
 Weleda                 [0-5]%         [0-5]%         [0-5]%       [0-5]%    [0-5]%      [0-5]%
 Others               [10-20]%       [20-30]%       [10-20]%      [10-20]% [10-20]%     [20-30]%
 Total                 100,0%          100,0%         100,0%       100,0%   100,0%       100,0%
                             Source: Form CO, Chapter 3, Section 6
        The Notifying Party’s view
(141) According to the Notifying Party, the Transaction does not raise competition
        concerns in the Netherlands for topical pain products because the Parties are not
        each other’s closest competitor and will continue to face more direct competition.
        The Notifying Party further claims that, amongst medicated products, Pfizer CH’s
        Advil gel only represents a [0-5]% increment and that, amongst non-medicated
        patches, GSK is not a strong competitor, while there are several other heat
        patches available, including private label products, and Pfizer CH no longer
        actively supports ThermaCare’s growth.132
(142) The Notifying Party also argues that the Parties’ combined market shares and
        increment would be more limited on the basis of volume-based shares.133
        Commission’s assessment
(143) The Parties’ combined market share in the Netherlands over the past three years
        are high (reaching [30-40]%, [40-50]%, and [40-50]% by value, respectively in
        2016, 2017, and 2018). Moreover, Pfizer CH’s increment in this market is
        material (reaching [5-10]%, [5-10]%, and [5-10]% by value, respectively in 2016,
        2017, and 2018).
(144) Conversely, the market shares of the Parties’ competitors in the Netherlands
        remain limited, especially when compared to the Parties’. Post-Transaction, the
        market share of the Combined CH Business’ first competitor, namely Schwabe,
        would amount to [10-20]% (by value in 2018).134 None of the other TPM market
        players active in the Netherlands had market shares exceeding [5-10]% (by value)
        in 2018.135
(145) On this basis, the market share data indicate that, post-Transaction, the Combined
        CH Business will have high market shares and benefit from a distant leadership
        position in the TPM area.
132     Form CO, Chapter 3, Section 6, paragraph 199 and 201.
133     Form CO, Chapter 3, Section 6, paragraph 200.
134     Form CO, paragraph 198.
135     Form CO, paragraph 198.
                                                      34
 ---pagebreak--- (146) The market investigation has confirmed that the Parties’ products have strong
      leadership on the TPM market in the Netherlands, with limited competition.136
      For instance, Dutch wholesalers noted that “With the integration of Pfizer, the
      new combination has a strong position in the market for TPM products.
      Competitors have weaker brand positioning and the products are in the opinion
      of consumers for a more superficial indication”137 and that “Voltaren is the well-
      known market leader in branded TPM OTC products, others follow at a great
      distance”.138 Moreover, the vast majority of competitors indicated that generic
      and private label TPM products exercise limited or no constraint on branded TPM
      products in the EEA, while listing GSK (extensively) and Pfizer (to a lesser
      extent) among their top 3 competitors in the TPM segment.139
(147) In addition, the vast majority of Dutch pharmacies and retailers mentioned the
      Parties’ TPM products as part of the top-5 TPM products that they would
      recommend to patients.140 All Dutch retailers, pharmacies, wholesalers, buyer
      groups, pharmacies and retailers that responded to the market investigation
      indicated that GSK’s TPM OTC products are must-have.141 The vast majority of
      these same respondents also considered Pfizer’s products to be must-haves.142
      Moreover, several Dutch wholesalers and buying groups who responded to the
      market investigation identified Pfizer’s products amongst their three best-selling
      products in TPM in the Netherlands in 2018.143 Dutch wholesalers and buyer
      groups also considers patients loyal to GSK and Pfizer CH’s TPM products and
      expect that pharmacies would not switch their orders towards alternative
      products, even in case of a 5-10% price increase of the Parties’ TPM products.144
(148) Moreover, the results of the market investigation revealed that there is close
      competitive interaction between ThermaCare and Volta-branded products in the
      Netherlands (patches and gels). For instance, a majority of Dutch retailers and
      pharmacies indicated that they could recommend a ThermaCare product instead
136   Replies to Q3 – Questionnaire to Competitors, question 19.
137   Replies to Q2 – Questionnaire to Wholesalers and Buying Groups, questions 24.1.1, 24.2.1 and
      24.3.1.
138   Replies to Q2 – Questionnaire to Wholesalers and Buying Groups, question 18.1.1
139   Replies to Q3 – Questionnaire to Competitors, question 24.
140   Replies to Q1 – Questionnaire to pharmacies and retailers, question 12.
141   Replies to Q1 - Questionnaire to Pharmacies and Retailers, question 24. Replies to Q2
      Questionnaire to Wholesalers and Buying Groups, question 20.2; Replies to Q1 – Questionnaire to
      Pharmacies and Retailers – Question 24.
142   Replies to Q1 - Questionnaire to Pharmacies and Retailers, question 25. Replies to Q2 –
      Questionnaire to Wholesalers and Buying Groups, question 19.2; Replies to Q1 – Questionnaire to
      Pharmacies and Retailers – Question 25.
143   Replies to Q2 - Questionnaire to wholesalers and buying groups, question 18.
144   Replies to Q2 – Questionnaire to Wholesalers and Buying Groups, question 23.
                                                     35
 ---pagebreak---  ---pagebreak---        Supplier                  2016                          2017                 2018
                        Value           Volume          Value       Volume    Value      Volume
 Italfarmaco           [0-5]%           [0-5]%         [0-5]%       [0-5]%   [0-5]%      [0-5]%
 Faes                  [0-5]%           [0-5]%         [0-5]%       [0-5]%   [0-5]%      [0-5]%
 Theralab              [0-5]%           [0-5]%         [0-5]%       [0-5]%   [0-5]%      [0-5]%
 Stada                 [0-5]%           [0-5]%         [0-5]%       [0-5]%   [0-5]%      [0-5]%
 Silfarmaplus          [0-5]%           [0-5]%         [0-5]%       [0-5]%   [0-5]%      [0-5]%
 Bastos viegas         [0-5]%           [0-5]%         [0-5]%       [0-5]%   [0-5]%      [0-5]%
 Aurobindo             [0-5]%           [0-5]%         [0-5]%       [0-5]%   [0-5]%      [0-5]%
 Grupo tecnimede       [0-5]%           [0-5]%         [0-5]%       [0-5]%   [0-5]%      [0-5]%
 Beiersdorf            [0-5]%           [0-5]%         [0-5]%       [0-5]%   [0-5]%      [0-5]%
 Others               [10-20]%        [10-20]%       [10-20]%      [10-20]% [10-20]%    [10-20]%
 Total                 100,0%           100,0%         100,0%       100,0%   100,0%      100,0%
                              Source: Form CO, Chapter 3, Section 6
         The Notifying Party’s view
(153) According to the Notifying Party, the Transaction does not raise competition
         concerns in Portugal for topical pain products because the Parties are not each
         other’s closest competitor. The Notifying Party further claims that, amongst
         medicated products, there is no overlap and that amongst non-medicated patches,
         which represent a relatively low share of the demand, there are established
         competitors and GSK’s imminent entry is not expected to change the competitive
         dynamics.149
(154) The Notifying Party also argues that the Parties’ combined market shares and
         increment would be more limited of the basis on volume-based shares.150
         Commission’s assessment
(155) The Parties’ combined market share in Portugal over the past three years are high
         (reaching [50-60]%, [40-50]%, and [40-50]% by value, respectively in 2016,
         2017, and 2018), even though the increment brought by Pfizer CH is limited
         (reaching [0-5]%, [0-5]%, and [0-5]% by value, respectively in 2016, 2017, and
         2018).
(156) In Portugal, the market shares of the Parties’ competitors are limited, especially
         when compared to the Parties’. Post-Transaction, the market share of the
         Combined CH Business’ first competitor, namely Bial, which was acquired in
         December 2018 by Procter & Gamble, would amount to only [5-10]% (by value)
         in 2018. None of the other players active in topical pain management in Portugal
         have held market shares exceeding [5-10]% (by value) over the past three years.
(157) On this basis, the market share data indicate that post-Transaction, the Combined
         CH Business will have high market shares and benefit from a distant leadership
149      Form CO, Chapter 3, Section 6, paragraphs 210 and 212.
150      Form CO, Chapter 3, Section 6, paragraph 211.
                                                       37
 ---pagebreak---       position in the TPM area, which will be further reinforced by the Transaction
      through the removal of a global-scale competitor (whose share is limited but still
      is a close competitor to the Combined CH Business’ [Information on product
      launch strategy]).
(158) The results of the market investigation have confirmed that market participants
      consider GSK’s Volta-brand and Pfizer’s ThermaCare as two important brands in
      the TPM category in Portugal. […].151 In addition, a number of Portuguese
      pharmacies and retailers consider that not only Voltaren but also Thermacare are
      must-have products.152 Moreover, a majority of wholesalers and buying groups
      operating in Portugal considers that customers would not switch towards
      alternative products, even in case of a 5-10% price increase of the Parties’ TPM
      product,153 which illustrates patients’ brand loyalty toward the Parties’ TPM
      products.154
(159) Moreover, the market investigation indicated that there is a competitive
      interaction between ThermaCare and Volta-branded products in Portugal. Some
      retailers indeed indicated that they could recommend GSK products instead of
      ThermaCare.155 In Portugal, for instance, several Portuguese retailers and
      pharmacies indicated that they could recommend a ThermaCare product instead
      of a Voltaren product (and vice versa).156 In addition, the vast majority of
      Portuguese retailers and pharmacies indicated that they could recommend
      ThermaCare [Information on product launch strategy].157
(160) In this context, the Commission further notes that, as explained above in
      paragraph 79, the vast majority of competitors that responded to the market
      investigation, as well as numerous customers, believe that the Transaction will
      have a negative impact on the TPM segment, including in terms of higher barriers
      to entry, higher prices, and less choice.
(161) In Portugal in particular, competitors indicated that the Transaction will be
      “increasing even more the dominant position” of the Combined CH Business
      […].158 The results of the market investigation revealed that competitors fear a
      negative impact on the competitive dynamics of the TPM market in Portugal.
      They indeed indicated that the “[T]ransaction will create a strong player position
      with powerful negotiation capacities and higher customers demanding behaviour
      of those products”;159 […].160 Competitors also raised risks of higher barriers to
151   Replies to Q1 - Questionnaire to Pharmacies and Retailers, question 30.
152   Replies to Q1 - Questionnaire to Pharmacies and Retailers, question 25.
153   Replies to Q2 - Questionnaire to wholesalers and buying groups, question 23.
154   Replies to Q1 - Questionnaire to Pharmacies and Retailers, question 23.
155   Replies to Q1 - Questionnaire to Pharmacies and Retailers, questions 18 and 19.
156   Replies to Q1 - Questionnaire to pharmacies and retailers, questions 15-19.
157   Replies to Q1 - Questionnaire to pharmacies and retailers, question 17.
158   Replies to Q3 - Questionnaire to Competitors, question 27.2.
159   Replies to Q3 - Questionnaire to Competitors, question 29.1.
160   Replies to Q3 - Questionnaire to Competitors, question 27.2.
                                                     38
 ---pagebreak---  ---pagebreak---       The Notifying Party’s view
(166) According to the Notifying Party, the Transaction does not raise competition
      concerns in the United Kingdom for topical pain products because the Parties are
      not each other’s closest competitor. The Notifying Party further claims that,
      amongst medicated products, there is no overlap and, in the heat patch space, the
      Parties face competition from well-established players with significant
      promotional support, as well as a range of private label products, such as those
      from Boots and Tesco that are not by the IQVVA market shares.162
(167) The Notifying Party also argues that the Parties’ combined market shares and
      increment would be more limited on the basis of volume-based shares.163
      Commission’s assessment
(168) The Parties’ combined market share in the United Kingdom over the past three
      years are high (reaching [20-30]%, [30-40]%, and [30-40]% by value,
      respectively in 2016, 2017, and 2018), even though Pfizer CH is limited ([0-5]%,
      [0-5]% and [0-5]% by value respectively in 2016, 2017, and 2018).
(169) In the UK, the market shares of the Parties’ competitors in the United Kingdom
      remain limited, especially when compared to the Parties’ position. Post-
      Transaction, the market share of the Combined CH Business’ first competitor,
      namely Rohto, would amount to only [5-10]%. None of the other market players
      active in TPM in Austria had market shares exceeding [5-10]% (by value) over
      the past three years.
(170) On this basis, the market share data indicate that post-Transaction, the Combined
      CH Business will have high market shares and benefit from a distant leadership
      position in the TPM area, while the Transaction would eliminate a significant
      competitor to GSK (with global scale and material market share) and reinforce
      the gap between the market leader and the other topical pain management
      suppliers.
(171) In addition, the results of the market investigation revealed a close competitive
      interaction between the products of Pfizer CH and GSK in the TPM market in the
      United Kingdom. Competitors referred to Pfizer’s ThermaCare as a close
      substitute to GSK’s Volta-branded products.164 Moreover, the majority of
      customers (retailers, pharmacies, wholesalers, and buying groups) explained that
      they would recommend a Pfizer CH TPM product as an alternative for a GSK
                                  165
      product, and vice-versa.
(172) In view of the above and of all available evidence, irrespective of whether the
      Transaction raises serious doubts as to its compatibility with the internal market
      as regards TPM products in the United Kingdom, the commitments offered by the
162   Form CO, Chapter 3, Section 6, paragraphs 211.
163   Form CO, Chapter 3, Section 6, paragraphs 211.
164   Replies to Q3 – Questionnaire to competitors, question 21, 22 and 23.
165   Replies to Q1 – Questionnaire to pharmacies and retailers, questions 17, 18 and 19.
                                                     40
 ---pagebreak---       Parties remove entirely the overlap between GSK and Pfizer CH in this market,
      thereby addressing any possible competition concerns.
                 3.1.2.4.      Conclusion
(173) In view of the above and of all available evidence, the Commission concludes that
      the Transaction raises serious doubts as to its compatibility with the internal
      market in relation to TPM products, as it would lead to a creation or
      strengthening of a dominant position in various EEA Member States.
(174) However, the commitments offered by the Parties remove almost entirely the
      overlap between GSK and Pfizer CH in these markets, thereby addressing any
      competition concerns.
      3.1.3.     Systemic pain management
(175) While GSK markets SPM products across the EEA, Pfizer CH is active in a more
      limited number of EEA Member States. GSK’s main brand in the SPM space is
      Panadol, which is an OTC paracetamol-based product, while Pfizer CH’s main
      brand is Advil, which is an ibuprofen-based OTC product.166
                 3.1.3.1.      Product market definition
(176) In terms of ATC classification, most OTC pain management products are
      classified in the ATC classes "N2 – Analgesics", "M – Musculo-Skeletal
      System", or "A – Alimentary Tract and Metabolism". In terms of OTC
      classification, most products belong to the OTC class 02, as shown in Table 1.
      Table 10 below summarises the sub-categories of systemic pain management
      ATC classes N2, M and A, and the one OTC class 02 relevant in the present case.
166   Form CO, Chapter 4, Section 6, paragraph 2. Pfizer CH also sells paracetamol and/or
      acetylsalicylic acid-based analgesics only in the UK, Ireland, Malta and Germany. GSK supplies
      ibuprofen-based products only in Italy and Romania (Form CO, Chapter 4, Section 6, footnote 6).
                                                      41
 ---pagebreak---                        Table 10 - SPM treatments – ATC/OTC Classes
ATC Code                                                                        OTC Code
                             Oral Intake (Systemic Products)
                                                    General Pain Relief Adult      02A1
                 Non-Narcotics and Anti-
    N2B
                          Pyretics                     General Pain Relief
                                                                                   02A2
                                                            Paediatric
    N2C        Anti-Migraine Preparations                Migraine Relief           02C1
                 Anti-Rheumatics, Non-                  Muscle Pain Relief
    M1A                                                                            02E2
                         Steroidal                          Systemic
                All Other Musculoskeletal              Systemic Joint Care
    M5X                                                                            02G2
                         Products                           Products
                     Gynaecological
    G2X1                                               Dysmenorrhea Relief         02B1
                     Antispasmodics
                Antispasmodic/Analgesic                   Non-Specific
    A3D                                                                            02H1
                                                         Antispasmodics
                      Combinations
                        Source: Form CO, Chapter 4, Section 6, Table SPM 2
(177) At ATC 3 level, the Parties’ activities overlap in the EEA only in relation to the
       ATC 3 classes N2B (which corresponds to the combination of the OTC classes
       02A1 and 02A2) and N2C (which corresponds to the OTC 3 class 02C1).
            The ATC 3 class N2B encompasses non-narcotics and anti-pyretic
             treatments, which are non-specific analgesic products, typically containing
             either paracetamol, or a non-steroidal anti-inflammatory drug (“NSAID”;
             for example: ibuprofen or diclofenac), or a combination of both, as well as
             other active ingredients, such as caffeine.167 The ATC 3 class N2B is further
             subdivided into two ATC 4 classes: N2B1 (prescription non-narcotics and
             anti-pyretics) and N2B2 (non-prescription non-narcotics and antipyretics).
             At ATC 4 level, the Parties overlap in N2B2 that corresponds to the OTC 3
             classes 02A1 (adults), which include OTC products for general pain relief
             for adults only, and (ii) 02A2 (paediatrics), which include OTC products for
             general pain relief for children only. At the OTC level, the activities of the
             Parties overlap in relation to 02A1 (for adult products), but not in relation to
             02A2 (for children products).
            The ATC 3 class N2C encompasses treatments with paracetamol or
             NSAIDs as active ingredients which are classified as anti-migraine
167    Form CO, Chapter 4, Section 6, paragraph 12.
                                                    42
 ---pagebreak---              preparations.168 This ATC 3 class corresponds to the OTC 3 class 02C1
             (“Migraine Relief”).
      Commission’s precedents
(178) In previous decisions, the Commission analysed the ATC 3 class N2B (non-
      narcotics and anti-pyretics) as a separate product market.169
(179) In addition, the ATC 3 class N2B is further subdivided into two ATC 4 classes:
      N2B1 (prescription non-narcotics and anti-pyretics) and N2B2 (non-prescription
      non-narcotics and antipyretics), the latter corresponding to the OTC 3 classes
      02A1 (adults) and 02A2 (paediatric). As discussed in Section IV.1.1, the
      Commission has generally considered Rx and OTC products as belonging to
      separate markets. Thus, in relation to systemic pain management specifically, the
      Commission previously analysed proposed concentrations at the level of N2B2 /
      02A1+02A2 (i.e., OTC products only).170
(180) The Commission also considered that a further distinction could be made between
      pain relief medicines for adults (which corresponds to the OTC 3 class 02A1) and
      for children (which corresponds to the OTC 3 class 02A2), but has ultimately left
      the question open.171
(181) Finally, the Commission previously considered in limited instances molecule-
      based markets in general pain relief products172 and assessed overlaps on the basis
      of specific molecules across systemic pain relief products (comprising multiple
      ATC 3 classes), but ultimately left this question open.173
168   Form CO, Chapter 4, Section 6, paragraph 13.
169   Commission decision of 29 June 2018 in case M.8889 – Teva / PGT OTC Assets, paragraphs 48
      and 49; Commission decision of 28 January 2015 in case M.7276 – GlaxoSmithKline / Novartis
      Vaccines Business (Excl. Influenza) / Novartis Consumer Health Business, paragraph 315;
      Commission decision of 25 October 2010 in case M.5953 – Reckitt Benckiser / SSL, paragraphs 17
      to 19; Commission decision of 11 December 2006 in case M.4314 – Johnson & Johnson / Pfizer
      Consumer Healthcare, paragraph 23; Commission decision of 6 January 2006 in case M.4007 –
      Reckitt Benckiser/Boots Healthcare, paragraphs 12 and 36; Commission decision of 26 April 2004
      in case M.3354 Sanofi-Synthelabo/Aventis, paragraph 99.
170   See for example Commission decision of 4 August 2016 in case M.7919 - Sanofi / Boehringer
      Ingelheim Consumer Healthcare Business, paragraph 115; Commission decision of 19 November
      2004 in case M.3544 – Bayer Healthcare / Roche (OTC Business), paragraph 23.
171   Commission decision of 29 June 2018 in case M.8889 – Teva / PGT OTC Assets, paragraphs 48
      and 49; Commission decision of 28 January 2015 in case M.7276 – GlaxoSmithKline / Novartis
      Vaccines Business (Excl. Influenza) / Novartis Consumer Health Business, paragraph 315;
      Commission decision of 25 October 2010 in case M.5953 – Reckitt Benckiser / SSL, paragraphs 17
      to 19; Commission decision of 11 December 2006 in case M.4314 – Johnson & Johnson / Pfizer
      Consumer Healthcare, paragraph 23.
172   See for example Commission decision of 29 June 2018 in case M.8889 – Teva / PGT OTC Assets,
      paragraph 59; Commission decision of 3 August 2018 in case M.5865 – Teva / Ratiopharm,
      paragraph 278.
173   See for example Commission decision of 29 July 2015 in case – M.7645 Mylan / Perrigo,
      paragraphs 65 and 66.
                                                    43
 ---pagebreak--- (182) As regards ATC 3 class N2C, the Commission previously assessed the relevant
      markets at ATC 3 level.174
      The Notifying Party’s view
(183) The Notifying Party argues that the relevant market should be defined at the
      broad level of SPM treatments, which would include non-narcotic analgesics and
      anti-pyretics (ATC 3 class N2B), antimigraine preparations (N2C), non-steroidal
      anti-rheumatics (M1A), all other musculoskeletal products (M5X),
      antispasmodics (A3D) and gynaecological antispasmodics (G2X1), in particular
      since these products typically contain the same ingredients (paracetamol,
      NSAIDs, and supplemental ingredients like caffeine) and have essentially the
      same function, that is to say, to manage pain symptoms. The Notifying Party also
      argues that consumers also consider general systemic pain relief products as
      substitutes for targeted systemic products such as anti-rheumatics.175
(184) Furthermore, the Notifying Party does not consider that a further segmentation
      between paediatric and adult products would be appropriate since, while the
      galenic form may differ between the two sets of products, the underlying active
      ingredient is generally the same.176
(185) In any event, the Notifying Party submitted market share data on a more granular
      basis, in line with the Commission’s precedents, and explains that the market
      definition in this case can be left open, as the Transaction would not raise serious
      doubts under any plausible market definition.177
      Commission’s assessment
      Non-narcotic analgesics and anti-pyretics (ATC 3 – N2B / OTC 3 – 02A1+02A2)
(186) The results of the market investigation did not provide indications that departing
      from Commission precedents would be appropriate. Therefore, the Commission
      considers that, for the purposes of this Decision, the market for non-narcotic
      analgesics and anti-pyretics (i.e., the ATC 3 class N2B or the combination of the
      OTC 3 classes 02A1 and 02A2) constitutes a separate market.
(187) Furthermore, the market investigation suggested that a segmentation between
      products intended for adults and paediatric may be appropriate. While the
      majority of competitors explained that they do not generally segment their SPM
      products between adult and paediatric pain management, there are differences
      between the two sets of products, in particular as regards their dosage.178
      Furthermore, the majority of pharmacies and retailers responding to the market
174   See Commission decision of 4 August 2016 in case M.7919 – Sanofi / Boehringer Ingelheim
      Consumer Healthcare Business, paragraph 278; Commission decision of 28 January 2015 in case
      M.7379 – Mylan / Abbott EPD-DM, paragraph 422.
175   Form CO, Chapter 4, Section 6, paragraph 38.
176   Form CO, Chapter 4, Section 6, paragraph 40.
177   Form CO, Chapter 4, Section 6, paragraph 41.
178   Replies to Q3 - Questionnaire to competitors, question 34.
                                                     44
 ---pagebreak---       investigation confirmed that SPM products for use by adults and by children
      differ, and that patients generally use distinct SPM products to treat the same
      general symptoms experienced by adults and by children.179
(188) As regards a potential distinction based on active ingredients (underlying
      molecule), the market investigation provided indications that such a distinction
      would not be appropriate. In particular, the majority of customers and competitors
      replying to the market investigation explained that SPM products based on
      different molecules are generally viewed as interchangeable by patients to treat
      the same general pain symptoms.180 In addition, as noted in paragraph 175, Pfizer
      CH largely focuses on ibuprofen-based Advil products and GSK largely focuses
      on paracetamol-based Panadol products, so this segmentation would in several
      instances result in the elimination of overlaps between the Parties’ products in the
      systemic pain area.181
(189) In any event, since the Transaction does not raise serious doubts as to its
      compatibility with the internal market under any plausible market definition, the
      Commission can leave open the question of whether the relevant markets should
      be further segmented based on the products’ indented patients (adults or children)
      or on underlying molecule.
(190) Finally, as regards the extent to which OTC and Rx products compete with each
      other in the SPM category, given that the Transaction would not give rise to
      affected markets in any other Member States should Rx products be taken into
      account for the purpose of computing market shares, the Commission will
      consider, for the purposes of this Decision, the relevant markets as encompassing
      OTC products only.182
      Anti-migraine preparations (ATC 3 – N2C / OTC 3 – 02C1)
(191) The results of the market investigation did not provide indications that departing
      from Commission precedents would be appropriate. Therefore, the Commission
      considers that, for the purposes of this Decision, the market for anti-migraine
      preparations (i.e., the ATC 3 class N2C, which corresponds to the OTC 3 class
      02C1) constitutes a separate market, without any further distinction being
      relevant.
(192) Finally, as regards the extent to which OTC and Rx products compete with each
      other in the SPM category, given that the Transaction would not give rise to
      affected markets in any Member States should Rx products be taken into account
179   Replies to Q1 - Questionnaire to pharmacies and retailers, question 29.4.
180   Replies to Q1 - Questionnaire to pharmacies and retailers, question 29.1 and replies to Q3 -
      Questionnaire to competitors, question 35.1.
181   In the EEA, the Parties would overlap at the molecule level in only Ireland (acetylsalicylic acid
      and paracetamol), Romania (ibuprofen) and the UK (paracetamol) (Form CO, Chapter 4, Section
      6, footnote 28).
182   In relation to OTC-to-Rx overlaps, the Transaction gives rise to an affected markets in the ATC 3
      class N2B in Hungary (Group 3). The Commission will not discuss further this potential market as
      Pfizer CH does not have any Rx products in N2B and the impact of the Transaction for OTC N2B
      products is discussed in Section IV.3.1.3.3 of this Decision.
                                                       45
 ---pagebreak---       for the purpose of computing market shares, the Commission will consider, for
      the purposes of this Decision, the relevant markets as encompassing OTC
      products only.
                  3.1.3.2.     Geographic market definition
(193) As explained in Section IV.1.2, the Commission considers the relevant product
      markets, as defined in Section IV.3.1.3.1, to be national in scope.
                  3.1.3.3.     Competitive assessment
(194) The Transaction does not give rise to affected markets under any plausible market
      definition as regards Rx-to-Rx overlaps, and OTC-to-Rx overlaps.
(195) In relation to OTC-to-OTC overlaps, the Transaction would give rise to the
      following affected markets:
             In the market for ATC 3 (N2B) / OTC 3 (02A1+02A2) products (non-
              narcotics and anti-pyretics), the Parties’ activities give rise to two affected
              markets in Hungary and Greece, both of which are Group 3 markets.183 If a
              distinction were made between adult and paediatric products, within the
              adults segment (OTC 3 class 02A1 - general pain relief for adults), the
              Parties’ activities would give rise to four affected markets: Hungary (Group
              1), Malta (Group 2), Ireland (Group 3, on the basis of volume only), 184 and
              Greece (Group 3). There is no overlap in the paediatrics segment (OTC 3
              class 02A2) in the EEA. In light of this, the Commission will assess the
              markets concerned on the narrowest plausible basis (OTC 3 class 02A1 -
              general pain relief for adults), which would give rise to one Group 1 market
              (Hungary) and one Group 2 markets (Malta).185
183   Regarding the Greek market for ATC 3 (N2B) / OTC 3 (02A1 – general pain relief for adults), the
      Parties’ combined market shares reached [20-30]%, [20-30]%, and [20-30]% by value, in 2016,
      2017, and 2018 respectively. Pfizer CH’s increment amounted to [0-5]%, [0-5]%, and [0-5]% by
      value, in 2016, 2017, and 2018 respectively. Moreover, there will remain strong competitors post-
      Transaction, notably Bristol-Myers SQB, with market shares of [50-60]%, [50-60]% and [50-
      60]% by value for the years 2016, 2017 and 2018 respectively; and Reckitt Benckiser, with
      market shares of [10-20]%, [10-20]% and [5-10]% by value for the years 2016, 2017 and 2018
      respectively. Considering the above, it is unlikely that any competition concerns can arise as a
      result of the Transaction in the markets for ATC 3 (N2B) / OTC 3 (02A1 – general pain relief for
      adults) products (non-narcotics and anti-pyretics) in Greece.
184   Regarding the Irish market for ATC 3 (N2B) / OTC 3 (02A1 – general pain relief for adults), the
      Parties’ combined market shares reached [20-30]%, [20-30]%, and [20-30]% by volume, in 2016,
      2017, and 2018 respectively. Pfizer CH’s increment amounted to [0-5]%, [0-5]%, and [0-5]% by
      volume, in 2016, 2017, and 2018 respectively. Moreover, there will remain strong competitors
      post-Transaction, such as Reckitt Benckiser, with market shares of [30-40]%, [30-40]% and [30-
      40]% by volume for the years 2016, 2017 and 2018 respectively; and Perrigo, with market shares
      of [20-30]%, [20-30]% and [20-30]% by volume for the years 2016, 2017 and 2018 respectively.
      Considering the above, it is unlikely that any competition concerns can arise as a result of the
      Transaction in the markets for ATC 3 (N2B) / OTC 3 (02A1 – general pain relief for adults)
      products (non-narcotics and anti-pyretics) in Ireland.
185   Should the relevant markets be segmented on the basis of the individual or groups of underlying
      molecules, the Transaction would give rise to affected markets only in Ireland. All the potentially
      affected markets arising from the Transaction on that basis would be Group 3 markets, with one
                                                       46
 ---pagebreak---              In the market for ATC 3 (N2C) / OTC 3 (02C1) products (anti-migraine
              preparations), the Parties’ activities give rise to one affected market in
              Germany (Group 3).186
(196) In line with the reasoning provided in paragraph 34, Group 3 markets will not be
      further discussed in this Decision.
Hungary – general pain relief adults (OTC 3 - 02A1)
(197) In Hungary, the Transaction gives rise to a Group 1 market for pain management
      treatments at OTC 3 (02A1) level, that it to say in relation to general pain relief
      products for adults.
(198) Table 11 below presents the Parties’ and their competitors’ market shares (in
      value and volume) over the past three years.
(199) As regards the Parties’ products, GSK sells Cataflam Dolo (diclofenac-based),
      Voltaren Dolo (diclofenac-based) and Panadol (paracetamol-based), while Pfizer
      CH sells Advil (ibuprofen-based).
      exception. In a segment comprising acetylsalicylic acid-based systemic analgesics (within the
      same ATC/OTC class or across combinations of ATC/OTC classes), a hypothetically Group 1
      market would arise. However, the Commission notes the following. First, as discussed in
      paragraph 188, the results of the market investigation revealed that segmenting the analgesics
      category on the basis of the products’ underlying molecule does not seem appropriate. Second,
      GSK’s product causing the overlap in this hypothetical segment, Excedrin, is in fact a
      combination product of acetylsalicylic acid and paracetamol with caffeine, whilst Pfizer CH’s
      product, Anadin, is an acetylsalicylic acid-based product with caffeine; which means that the
      overall product formulations are different. Third, market participants did not raise concerns in
      relation to the impact of the Transaction in Ireland in relation to any specific SPM product.
      Therefore, in light of these elements, the Commission considers that the Transaction is unlikely to
      raise serious doubts as to its compatibility with the internal market on a potential market for
      acetylsalicylic acid-based analgesics in Ireland, and therefore will not further discuss this market
      in this Decision.
186   In the market for ATC 3 (N2C) / OTC 3 (02C1) products (anti-migraine preparations) in
      Germany, the Parties’ combined market shares reached [30-40]%, [20-30]%, and [20-30]%by
      value, in 2016, 2017, and 2018 respectively. Pfizer CH’s increment amounted to [0-5]%, [0-5]%,
      and [0-5]% by value, in 2016, 2017, and 2018 respectively. Moreover, there will remain strong
      competitors post-Transaction, such as Johnson & Johnson, with market shares of [30-40]%, [30-
      40]% and [30-40]% by value for the years 2016, 2017 and 2018 respectively; and Novartis, with
      market shares of [5-10]%, [10-20]% and [10-20]% by value for the years 2016, 2017 and 2018
      respectively. Considering the above, it is unlikely that any competition concerns can arise as a
      result of the Transaction in the markets for ATC 3 (N2C) / OTC 3 (02C1) products (anti-migraine
      preparations) in Germany.
                                                      47
 ---pagebreak---  ---pagebreak---        considered as competing more closely with Algoflex than with each other.189 This
       is consistent with the market share data submitted by the Notifying Party and with
       the fact that, while the various SPM products compete with each other, the
       Parties’ products are based on different molecules. While GSK’s products are
       either diclofenac- or paracetamol-based, Pfizer’s product is ibuprofen-based
       (same as Sanofi’s Algoflex). Although GSK’s and Sanofi’s products are indeed
       based on different molecules, Sanofi’s market position still makes it the strongest
       competitor for GSK.
(203) Furthermore, the results of the market investigation revealed that brand awareness
       is a particularly relevant feature in the Hungarian SPM market.190 In this respect,
       the Commission notes that other strong brands, including Bayer’s Aspirin
       (acetylsalicylic acid-based) and Reckitt Benckiser’s Nurofen (ibuprofen-based) –
       which are identified by market participants as must-have brands191 – but also
       local competitors such as Gedeon Richter with Kalmopyrin (acetylsalicylic acid-
       based), Menarini with Ketodex (dexketoprofen trometamol-based) and Bene
       Chemie with Ben-U-Ron (paracetamol-based) will remain on the market and will
       exert competitive pressure on the Combined CH Business. This is also confirmed
       by GSK’s internal documents which show that, in addition to the strong major
       players present on the market, mid-size players are viewed as [Comment on mid-
       size players].192
(204) In addition, the Commission notes that while brand awareness plays an important
       role in Hungary, the products in question are based on off-patent, genericised
       molecules. This makes barriers to entry in this relevant market relatively lower,
       and suggests that generic suppliers may have the ability and the incentive to enter
       the market or increase their offer in the event of a price increase.
(205) Finally, the majority of market participants responding to the market investigation
       believe that the Transaction will not have a negative impact on the market for
       systemic pain management treatments in Hungary.193
(206) In light of the elements discussed in this Section, the Commission concludes that
       the Transaction does not raise serious doubts as to its compatibility with the
       internal market for systemic pain management treatments in Hungary.
Malta – general pain relief adults (OTC 3 - 02A1)
189    Replies to Q1 - Questionnaire to pharmacies and retailers, questions 32 and 33; replies to Q2 -
       Questionnaire to wholesalers and buying groups, or equivalents, questions 26 and 27 and replies
       to Q3 - Questionnaire to competitors, questions 39 and 40.
190    Replies to Q1 - Questionnaire to pharmacies and retailers, question 37.
191    Replies to Q1 - Questionnaire to pharmacies and retailers, question 40 and replies to Q2 -
       Questionnaire to wholesalers and buying groups, or equivalents, question 28.
192    Annex SPM 3 to Form CO, internal document of GSK, [Internal document].
193    Replies to Q1 - Questionnaire to pharmacies and retailers, question 41; replies to Q2 -
       Questionnaire to wholesalers and buying groups, or equivalents, question 30 and replies to Q3 -
       Questionnaire to competitors, questions 44 and 45.
                                                      49
 ---pagebreak---  ---pagebreak---        about an increment in market share of around [0-5]%, which corresponds to de
       minimis sales of EUR [De minimis sales]. The results of the market investigation
       confirmed that Pfizer CH plays a very minor role in the market concerned and
       that more significant competitors will remain on the market post-Transaction.197
       In particular, other major pharmaceutical companies such as Perrigo, Reckitt
       Benckiser and Menarini will keep offering analgesics for adults in Malta, together
       with other regional competitors. Therefore, the Transaction is unlikely to remove
       any significant competitive constraint from the market.
(212) Finally, the results of the market investigation did not reveal any substantiated
       concerns as regards the overall impact of the Transaction in the SPM market in
       Malta.198
(213) In light of the elements discussed in this Section, the Commission concludes that
       the Transaction does not raise serious doubts as to its compatibility with the
       internal market for systemic pain management treatments in Malta.
                 3.1.3.4.     Conclusion
(214) In view of the elements discussed in this Section and the evidence available to it,
       the Commission concludes that the Transaction does not raise serious doubts as to
       its compatibility with the internal market for systemic pain management
       treatments in any EEA Member State.
  3.2. Cold and flu treatments
       3.2.1.    Product market definition
(215) Cold and flu OTC products treat the variety of symptoms generated by
       nasopharyngitis, rhinopharyngitis, or acute coryzacold (commonly referred to as
       “the common cold” or simply “a cold”) and influenza (commonly referred to as
       “the flu”). Symptoms from cold and flu are multiple and can be treated by a
       number of different OTC products. Individuals suffering from cold or flu
       experience one or more of a number of symptoms including a cough, runny nose,
       nasal congestion, and a sore throat. Cold and flu OTC products include both
       multi-symptoms products and single-symptoms products, which include active
       principles targeting specific symptoms.
(216) In terms of ATC classification, most OTC cold and flu treatments are classified in
       the ATC class "R – Respiratory System" and, in terms of OTC classification, in
       OTC class 01. Table 13 below summarises the sub-categories of cold and flu
       treatments ATC 3 and OTC 3 classes.
197    Replies to Q1 - Questionnaire to pharmacies and retailers, question 31; replies to Q2 -
       Questionnaire to wholesalers and buying groups, or equivalents, question 25 and replies to Q3 -
       Questionnaire to competitors, question 38.
198    Replies to Q1 - Questionnaire to pharmacies and retailers, question 41; replies to Q2 -
       Questionnaire to wholesalers and buying groups, or equivalents, question 30 and replies to Q3 -
       Questionnaire to competitors, questions 44 and 45.
                                                      51
 ---pagebreak---                   Table 13 – Cold and flu treatments – ATC/OTC Classes
ATC Code                                                                        OTC Code
                                     Nasal Preparations
                                                                                01B2A
                                                   Nasal        Decongestants 01B2D
R1A          Topical Nasal Preparations            (Topical)                    01B2L
                                                                                01B2O
                                                   Nasal Saline Solutions       01F1
                                                                                01B2C
                                                   Nasal        Decongestants
R1B          Systemic Nasal Preparations                                        01B2M
                                                   (Systemic)
                                                                                01B2T
                                    Throat Preparations
R2A          Throat Preparations                   Sore Throat Remedies         1.    01C1
                            Chest Rubs and Other Inhalants
             Chest Rubs and Other Decongestion
R4A                                                                             01B3
             Inhalants                             Rubs/Inhalants
                              Cough and Cold Preparations
R5A          Cold Preparations Without
                                                   Cold or Flu Remedies         01B1
             Anti- Infectives
R5C          Expectorants                          Expectorants                 01A2
R5D          Antitussives                          Cough Relievers              01A1
R5F          Other Cough and Cold
             Preparations
                         All Other Non-Therapeutic Products
             All Other Non-Therapeutic Products                  for      other
V7A                                                                             01V1
             Products                              Respiratory Conditions
                        Source: Form CO, Chapter 5, Section 6, Table CF 2
(217) While GSK is active in most of the ATC 3 / OTC 3 classes identified in Table 13,
      the Parties’ activities overlap in the EEA only in relation to ATC 3 classes R5A
      “Cold Preparations Without Anti- Infectives” and R5D “Antitussives” (which
      respectively correspond to the OTC 3 classes 01B1 “ Cold or Flu Remedies” and
      01A1 “ Cough Relievers” respectively):
           The ATC 3 class R5A (which corresponds to the OTC 3 class 01B1 “Cold
            or Flu Remedies”) encompasses multi-symptom cold and flu products
            which target multiple symptoms simultaneously and typically contain an
            analgesic base (such as paracetamol, ibuprofen or acetylsalicylic acid),
            combined with other agents such as nasal decongestants, cough
            suppressants, expectorants and/or antihistamines.199
           The ATC 3 class R5D (which corresponds to the OTC 3 class 01A1 “Cough
            relievers”) encompasses antitussives (also known as cough suppressants),
            which relieve coughs by blocking the cough reflex, and are most effective
199   Form CO, Chapter 5, Section 6, paragraph 18.
                                                    52
 ---pagebreak---              relieving dry coughs,              based    on    active     ingredients      such     as
             dextromethorphan.200
(218) Pfizer CH is also active in the ATC 3 class R5C “Expectorants” (which
      corresponds to the OTC 3 class 01A2 “Expectorants”).201 Expectorant stimulate
      bronchial secretion, reduces the thickness or viscosity of bronchial secretions,
      thus increasing mucus flow (making it easier to remove mucus through
      coughing), and are thus particularly effective in treating a productive cough.202
      The Parties’ activities do not overlap in this category as GSK sells expectorants
      only in Italy and Austria (via limited sales), where Pfizer CH is not active.
      Commission’s precedents
(219) The Commission's starting point in defining the relevant product markets in the
      cold and flu space has traditionally been the ATC 3 classification. However, in
      some instances, the Commission departed from the ATC 3 classification and
      looked in particular at ATC 4 classification or at groups of ATC 3 classes as
      plausible product markets.
(220) In previous decisions relating to cold and flu treatments, the Commission
      analysed markets including both multi-symptom products and single symptom
      products. The Commission thus assessed transactions based on combinations of
      ATC 3 classes, in particular between multi-symptom products (ATC 3
      classification R5A), on the one hand, and chest rubs and other inhalants (R4A),
      systemic nasal preparations (R1B), nasal decongestants (R1A7) and other topical
      nasal decongestants (R1A9), on the other hand, but ultimately left the exact
      market definition open.203 More recently, the Commission analysed together
      markets for multi-symptom and topical nasal products,204 as well as markets for
      multi-symptom products and throat preparations but ultimately left the exact
      market definition open.205
(221) The Commission also looked at whether different single symptom products might
      form part of the same relevant market.206 In particular, the Commission found that
      expectorants (R5C) and antitussives (R5D) are likely part of different product
      markets because of their different way of action, and due to the fact that they treat
200   Form CO, Chapter 5, Section 6, paragraph 19.
201   GSK has very limited sales of expectorants in the EEA, namely in Italy and Austria, which do not
      overlap with Pfizer CH’s.
202   Form CO, Chapter 5, Section 6, paragraph 27.
203   Commission decision of 6 January 2006 in case M.4007 – Reckitt Benckiser/Boots Healthcare
      International, paragraphs 29; Commission decision of 11 December 2006 in case M.4314 –
      Johnson & Johnson/Pfizer Consumer Healthcare, paragraph 18.
204   Commission decision of 28 January 2015 in case M.7276 – GlaxoSmithKline / Novartis Vaccines
      Business (Excl. Influenza) / Novartis Consumer Health Business, paragraph 233.
205   Commission decision of 28 January 2015 in case M.7685 – Perrigo / GSK Divestment Business,
      paragraphs 29 to 33.
206   Commission decision of 28 January 2015 in case M.7276 – GlaxoSmithKline / Novartis Vaccines
      Business (Excl. Influenza) / Novartis Consumer Health Business, paragraphs 245 to 248.
                                                     53
 ---pagebreak---       different kind of coughs (wet and dry cough respectively), but ultimately left the
      exact market definition open.207
(222) Moreover, the Commission previously considered segmentations at ATC 4
      level,208 as well as whether different galenic forms of cold and flu products
      formed part of the same market, but ultimately left the exact market definition
      open.209
(223) Finally, Commission precedents examined in limited instances molecule-based
      markets in cold and flu treatments, in particular cough treatments, but ultimately
      left open the relevance of such segmentation.210
      The Notifying Party’s view
(224) The Notifying Party submits that GSK and Pfizer CH compete within a broad
      OTC cold and flu market. As a result, the appropriate product market definition
      should be broader than each ATC 3 class.
(225) From a demand side perspective, the Notifying Party claims that a cold or flu
      typically evolves from a sore throat through a blocked or runny nose, fever, and
      other symptoms (with a cough typically being at its worst towards the end of the
      cold), and that the boundaries between the different product types are blurred, in
      particular due to differing customer preferences.
(226) The Notifying Party further argues that cold and flu products are often presented
      and marketed as a single category by pharmacies, on specific “cold and flu”
      shelves (or webpages for online pharmacies) on which a variety of different
      treatments are presented together. The Notifying Party however notes that in
      some countries, including the UK, cough products are usually presented
      separately from other cold and flu products.
(227) From a supply side perspective, the Notifying Party claims that it is relatively
      easy for suppliers to switch production between different cold and flu products, as
      the same production lines can be used for different products of the same galenic
      form, including different single-symptom or multi-symptom products.
207   Commission decision of 8 May 2000 in case M.1846 – Glaxo Wellcome / Smithkline Beecham,
      paragraphs 69; Commission decision of 22 May 2000 in case M.1846 – Pfizer / Warner-Lambert,
      paragraphs 40 to 41; Commission decision of 11 December 2006 in case M.4314 – Johnson &
      Johnson/Pfizer Consumer Healthcare, paragraph 19; Commission decision of 16 March 2004 in
      case M.4367 APW/APSA/Nordic Capital/CAPIO, paragraph 27.
208   Commission decision of 25 October 2000 in case M.5953 – Reckitt Benckiser/ SSL, paragraphs
      12; Commission decision of 30 September 2011 in case M.5953 – Procter & Gamble/Teva OTC
      Business, paragraph 9.
209   Commission decision of 9 September 2012 in case M.6705 – Procter & Gamble/Teva
      Pharmaceuticals OTC II, paragraphs 9 to 10; Commission decision of 4 August 2016 in case
      M.7919 – Sanofi/Boehringer Ingelheim Consumer healthcare Business, paragraph 17.
210   Commission decision of 4 August 2016 in case M.7919 – Sanofi/Boehringer Ingelheim Consumer
      healthcare Business, paragraph 12; Commission decision of 25 October 2000 in case M.5953 –
      Reckitt Benckiser/ SSL, paragraph 12.
                                                  54
 ---pagebreak---       Commission’s assessment
(228) Contrary to the Notifying Party’s claim, the market investigation indicates that a
      broad market encompassing all cold and flu products does not constitute a
      plausible product market.
(229) A majority of respondents to the market investigation consider that patients view
      multiple symptom products as interchangeable with single-symptoms products.211
      The same applies in particular with regards to multi-symptom products (which
      include a cough treatment), on the one hand, and single-symptom cough
      treatments, on the other hand, which are considered substitutable for a majority of
      respondents.212 Conversely, the results of the market investigation confirmed that
      single product symptoms are typically not considered as interchangeable between
      each other.213 In particular, with regards to cough treatments specifically, a
      majority of respondents consider that patients do not use indistinctively
      antitussives and expectorants when experiencing cough symptoms.214 A similar
      logic applies when looking at ATC 4 level.215
(230) In line with precedents relating to other OTC categories (and in particular
      systemic pain management as explained in Section IV.3.1.3), the results of the
      market investigation revealed that products aimed at children are likely part of a
      different product market than those designed for adults. An overwhelming
      majority of pharmacies view paediatric and adult products as different (including
      in terms of e.g. labels, formats, or preparations) and a majority of competitors
      segment their cold and flu products in line with this distinction, in particular due
      to different dosages and specific regulatory or commercial considerations
      applying to paediatric products.216
(231) In line with precedents, the market investigation indicated that products based on
      different galenic forms (for instance tablets or liquids) can be considered as
      interchangeable, in spite of patients potentially having some preferences for
      specific formats.217 Similarly, the market investigation did not reveal that a split
211   Replies to Q1 - Questionnaire to pharmacies and retailers, question 42.1. Replies to Q3 -
      Questionnaire to competitors, question 51.
212   Replies to Q3 - Questionnaire to competitors, question 54.
213   Replies to Q1 - Questionnaire to pharmacies and retailers, question 42.2. Replies to Q3 -
      Questionnaire to competitors, question 52.
214   Replies to Q1 - Questionnaire to pharmacies and retailers, question 42.2.2. Replies to Q3 -
      Questionnaire to competitors, question 53.
215   Among the relevant products, only the antitussives category (R5D) is further subdivided into two
      ATC 4 classes; R5D1 (plain antitussives) and R5D2 (antitussives in combinations). Antitussives
      in combinations include both an antitussive active ingredient as well as other treatments including
      expectorants, antihistamines, ephedrine, and/or herbal tinctures.
216   Replies to Q1 - Questionnaire to pharmacies and retailers, question 42.4. Replies to Q3 -
      Questionnaire to competitors, question 50.
217   Replies to Q1 - Questionnaire to pharmacies and retailers, question 42.1. Replies to Q3 -
      Questionnaire to competitors, question 55.
                                                      55
 ---pagebreak---       based on the active ingredient in the relevant cold and flu treatment would be
      relevant.218
(232) In view of the above, the Commission concludes that for the purposes of the
      present case, the most plausible product markets in the cold and flu space consist
      of ATC 3 / OTC 3 classes or combinations thereof, which can be further
      segmented based on ATC 4 / OTC 4 class (where relevant), as well as the
      products’ intended user (adult vs paediatric).219 Hence the competitive assessment
      will focus on the effects of the Transaction on these segments.
             3.2.2. Geographic market definition
(233) As explained in Section IV.1.2, the Commission has historically considered the
      relevant product markets, as defined in Section IV.3.2.1, to be national in scope.
             3.2.3. Competitive assessment
(234) The Transaction gives rise to affected markets at ATC 3 / OTC 3 level or
      combination thereof in a number of EEA countries, which will be assessed
      successively below.
(235) These affected markets relate mainly to OTC-to-OTC overlaps (in Czechia,
      France, Ireland, Malta, Romania, Slovakia, and the United Kingdom), as well as
      Rx-to-Rx overlaps (in Romania) and OTC-to-Rx overlaps (in Hungary and
      Romania).220
(236) Of these, Group 1 and Group 2 markets arise in Czechia, Hungary, Malta,
      Romania, Slovakia, and the United Kingdom.221
218   Minutes of a call with a competitors dated 27 February 2019.
219   It is however not necessary to assess paediatric only markets, as the Parties do not overlap for the
      relevant products in any Member States.
220   Markets which are technically affected on an OTC-to-Rx basis where the Parties do not offer any
      Rx product will not be assessed separately in the present decision, as assessing those on an OTC-
      to-OTC (where the Parties’ activities overlap) basis is more relevant.
221   As mentioned in paragraph 34, Group 3 markets are not individually discussed in detail in this
      Decision. Of these affected markets referred to in paragraph 236 of this Decision, Group 3
      markets arise for Multi-Symptom Cold & Flu Products and Topical Nasal Preparations
      (R5A+R1A7+R1A9) in France, Ireland, and Hungary. Regarding the French market, the Parties’
      combined market shares reached [30-40]%, [20-30]%, and [20-30]% by value, in 2016, 2017, and
      2018 respectively. Pfizer CH’s increment amounted to [0-5]%, [0-5]%, and [0-5]% by value, in
      2016, 2017, and 2018 respectively. Moreover, there will remain strong competitors post-
      Transaction, such as Sanofi, with market shares of [10-20]%, [20-30]% and [20-30]% by value for
      the years 2016, 2017 and 2018 respectively; and Groupe Batteur, with market shares of [10-20]%,
      [10-20]% and [10-20]% by value for the years 2016, 2017 and 2018 respectively. Regarding the
      Irish market, the Parties’ combined market shares reached [20-30]%, [20-30]%, and [20-30]% by
      value, in 2016, 2017, and 2018 respectively. Pfizer CH’s increment amounted to [0-5]%, [0-5]%,
      and [0-5]% by value, in 2016, 2017, and 2018 respectively. Moreover, there will remain strong
      competitors post-Transaction, such as Johnson & Johnson, with market shares of [20-30]%, [30-
      40]% and [30-40]% by value for the years 2016, 2017 and 2018 respectively; and Reckitt
      Benckiser, with market shares of [10-20]%, [10-20]% and [10-20]% by value for the years 2016,
      2017 and 2018 respectively. Regarding the Hungarian market, the Parties’ combined market
      shares reached [20-30]%, [20-30]%, and [30-40]% by value, in 2016, 2017, and 2018 respectively.
                                                      56
 ---pagebreak---  ---pagebreak---       share would drop to around [50-60]% (in terms of value). Furthermore, strong
      competitors such that Angelini ([20-30]% of market shares by value in 2018) and
      Teva ([10-20]% of market shares by value in 2018) exert a significant
      competitive constraint over the Parties.
(240) The market investigation indicates that the Parties’ products are not each other’s
      closest competitor. In particular, Teva’s Stoptussin is consistently mentioned as a
      top alternative to both Robitussin and Sinecod, while Stoptussin does not belong
      to the same ATC 4 category (as it belongs instead to ATC 4 class R5D2).224 Such
      feedback mitigates the relevance of an assessment limited to the ATC 4 category.
      Other products competing with the Parties’ products, as identified by respondents,
      include Angelini’s Levopront and Dr. Max’s Tussical, Teva’s Ditustat,
      Walmark’s Stopex, Novartis’ ACC, and Sanofi’s Mucosolvan, many of which also
      do not qualify as plain antitussives (and some of which qualify as expectorants),
      and thus do not belong to the same ATC 4 category either.225
(241) Internal documents of the Parties also seem to mitigate the relevance of an
      assessment limited to the ATC 4 category as they track competing products in
      both plain antitussives and combined antitussives jointly.226
(242) The market investigation further indicates that multi-symptom products may
      exercise a constraint on antitussives in Czechia. In particular, the results of the
      market investigation revealed that certain suppliers present their multi-symptom
      products as substitute for cough treatments, including Sanofi’s market leading
      Paralen Grip.227
(243) Furthermore, GSK or Pfizer’s products do not seem to be considered as must-
      haves by pharmacies in Czechia.228 In addition, all of the responding Czech
      wholesalers consider that pharmacies would switch their orders towards
      alternative products offered by other pharmaceutical companies should the
      Combined CH Business apply a price increase to cough treatments post
      Transaction.229
(244) A number of competitors also highlighted the importance of pharmacy chains in
      Czechia, which translate into a stronger negotiating power, as well as of own
      label products including in the cold and flu space.230 Dr. Max, the leading
      pharmacy chain in Czechia, had no presence in antitussives before 2017 and
      already captured [5-10]% of the market in 2018 with own label products.
224   Replies to Q2 - Questionnaire to wholesalers and buying groups, or equivalents, questions 32.1.1
      and 33.1.1. Only one respondent lists Robitussin as the closest alternative to Sinecod.
225   Replies to Q2 - Questionnaire to wholesalers and buying groups, or equivalents, questions 32.1.1
      and 33.1.1. Replies to Q3 - Questionnaire to competitors, question 63.
226   See the document [Internal document].
227   Replies to Q3 - Questionnaire to competitors, question 54.1.
228   Replies to Q1 - Questionnaire to pharmacies and retailers, question 51 and 52.
229   Replies to Q2 - Questionnaire to wholesalers and buying groups, or equivalents, question 35.2.
230   Replies to Q3 - Questionnaire to competitors, question 64.1.
                                                     58
 ---pagebreak--- (245) Finally, respondents to the market investigation did not raise specific or
      substantiated concerns in relation to the cold and flu segment in Czechia.
(246) In view of the elements discussed in this Section, the Commission concludes that
      the Transaction does not raise serious doubts as to its compatibility with the
      internal market for cold and flu treatments in Czechia.
Hungary
(247) In Hungary, at ATC 3 class level (or combinations thereof), the Transaction gives
      rise to Group 1 affected markets in relation to (i) OTC multi-symptom cold and
      flu products (ATC 3 - R5A / OTC 3 01B1); (ii) OTC and Rx antitussives (ATC 3
      R5D); (iii) OTC and Rx multi-symptom cold and flu treatments and antitussives
      (combination of ATC 3 classes R5A + R5D); and (iv) OTC multi-symptom cold
      and flu treatments and topical nasal preparations (combination of ATC 3 classes
      R5A + R1A7 + R1A9 / OTC 3 classes 01B1 + 01B2A + 01B2D + 01B2L +
      01B2O + 01F1).231
            OTC-to-OTC: Multi-symptom cold and flu products (R5A/01B1)
(248) In Hungary, the Transaction gives rise to a Group 1 market for cold and flu
      treatments at ATC 3 / OTC 3 level, in relation to multi-symptom cold and flu
      products. GSK offers its NeoCitran line of products, whereas Pfizer CH markets
      Advil-branded products.
231   In Hungary, Group 3 markets arise (i) for Multi-Symptom Cold & Flu Products and Throat
      Preparations (R5A+R2A), (ii) for Multi-Symptom Cold & Flu/Expectorants (R5A/R5C), and (iii0
      for Combined Multi-symptom Cold and Flu (R5A), Expectorants (R5C) and Antitussives (R5D).
      Regarding the Multi-Symptom Cold & Flu Products and Throat Preparations (R5A+R2A) market,
      the Parties’ combined market shares reached [20-30]%, [20-30]%, and [20-30]% by value, in
      2016, 2017, and 2018 respectively. Pfizer CH’s increment amounted to [0-5]%, [0-5]%, and [0-
      5]% by value, in 2016, 2017, and 2018 respectively. Moreover, there will remain strong
      competitors post-Transaction, such as Reckitt Benckiser, with market shares of [10-20]%, [10-
      20]% and [10-20]% by value for the years 2016, 2017 and 2018 respectively; and Angelini, with
      market shares of [10-20]%, [10-20]% and [10-20]% by value for the years 2016, 2017 and 2018
      respectively. Regarding the Multi-Symptom Cold & Flu/Expectorants (R5A/R5C) market, the
      Parties’ combined market shares reached [20-30]%, [20-30]%, and [20-30]% by value, in 2016,
      2017, and 2018 respectively. Pfizer CH’s increment amounted to [0-5]%, [0-5]%, and [0-5]% by
      value, in 2016, 2017, and 2018 respectively. Moreover, there will remain strong competitors post-
      Transaction, such as Novartis, with market shares of [10-20]%, [10-20]% and [10-20]% by value
      for the years 2016, 2017 and 2018 respectively; and Bayer, with market shares of [10-20]%, [10-
      20]% and [5-10]% by value for the years 2016, 2017 and 2018 respectively. Regarding the
      Combined Multi-symptom Cold and Flu (R5A), Expectorants (R5C) and Antitussives (R5D)
      market, the Parties’ combined market shares reached [20-30]%, [20-30]%, and [20-30]% by
      value, in 2016, 2017, and 2018 respectively. Pfizer CH’s increment amounted to [0-5]%, [0-5]%,
      and [0-5]% by value, in 2016, 2017, and 2018 respectively. Moreover, there will remain strong
      competitors post-Transaction, such as Novartis, with market shares of [10-20]%, [10-20]% and
      [10-20]% by value for the years 2016, 2017 and 2018 respectively; and Bayer, with market shares
      of [5-10]%, [5-10]% and [5-10]% by value for the years 2016, 2017 and 2018 respectively.
      Considering the above, it is unlikely that any competition concerns can arise as a result of the
      Transaction in the markets for Multi-Symptom Cold & Flu Products and Throat Preparations
      (R5A+R2A), for Multi-Symptom Cold & Flu/Expectorants (R5A/R5C), and for Combined Multi-
      symptom Cold and Flu (R5A), Expectorants (R5C) and Antitussives (R5D) in Hungary.
                                                    59
 ---pagebreak---  ---pagebreak---       respondents to the market investigation include primarily Perrigo and Bayer, in
      line with their respective market share.233
(253) The market investigation also validates the Notifying Party’s claim that the
      Parties’ products are not close competitors to each other. None of the respondents
      to the marker investigation considers Advil Cold & Flu as a suitable alternative to
      NeoCitran. The main alternatives cited include instead Perrigo’s Coldrex, Reckitt
      Benckiser’s Nurofen Cold and Flu, Sanofi’s Rubophen, Procter & Gamble’s Wick
      Powder, Bayer’s Aspirin, Boiron’s Oscillococcinum and Richter Gedeon’s
      Kalmopyrin.234 Around half of the respondents consider NeoCitran as a suitable
      alternative to Advil Cold & Flu, which is understandable in light of its leading
      market presence. However, NeoCitran is only one of many alternatives listed
      among others, including Perrigo’s Coldrex, Bayer’s Aspirin, Reckitt Benckiser’s
      Nurofen Cold and Flu and Sanofi’s Rhinatiol.235
(254) The market investigation also indicates that consumers may have stronger
      preferences towards specific formats in Hungary, in particular for hot drinks,
      which are perceived as a trend even if, ultimately, the different formats are
      viewed as interchangeable.236 While over [90-100]% of GSK’s sales of
      NeoCitran in Hungary are of liquid powder formats (and as such qualifies as “hot
      drinks”), Pfizer CH only offers Advil in tablets and capsules, which further
      indicates that the Parties’ products are not particularly close competitors.
(255) Internal documents also confirm that the Parties are not particularly close
      competitors in the multi-symptom cold and flu market in Hungary. GSK does not
      consider Pfizer’s Advil as a key competitor, but instead monitors more closely
      other products listed above, in particular Perrigo’s Coldrex, and Bayer’s
      Aspirin.237
(256) The fact that Advil only represents a minor competitive presence on the
      Hungarian market is further evidenced by the fact that Hungarian
      pharmacies/retailers do not seem to consider Pfizer’s products to be must-
      haves.238 In addition, while an important share of competitors and customers
      contacted during the investigation emphasized the importance of brands in
      Hungary,239 Advil does not benefit from a strong brand image in the cold and flu
      space, as it is more closely associated with SPM.
233   Replies to Q3 - Questionnaire to competitors, question 59.2.
234   Replies to Q1 - Questionnaire to pharmacies and retailers, question 44.2. Replies to Q2 -
      Questionnaire to wholesalers and buying groups, or equivalents, question 33.1.1. Replies to Q3 -
      Questionnaire to competitors, question 60.
235   Replies to Q1 - Questionnaire to pharmacies and retailers, question 44.1. Replies to Q2 -
      Questionnaire to wholesalers and buying groups, or equivalents, question 32.1.1. Replies to Q3 -
      Questionnaire to competitors, question 61.
236   Replies to Q3 - Questionnaire to competitors, question 55.1.
237   See the document [Internal document].
238   Replies to Q1 - Questionnaire to pharmacies and retailers, question 52.
239   Minutes of a call with a wholesaler dated 03 May 2019.
                                                     61
 ---pagebreak---  ---pagebreak---       Commission’s assessment
(261) The market investigation indicates that the Parties’ products are not particularly
      close competitors and there are many viable alternatives in the antitussive
      segment. Sinecod is sold Rx, while Robitussin is sold OTC. None of the
      responding customers to the market investigation, and only one competitor, list
      GSK’s Sinecod as a top alternative to Pfizer’s Robitussin. Competing products
      cited include instead Novartis’ ACC, Sanofi’s Rhinathiol Tusso, Boiron’s Stodal,
      Dr Theiss’ Plantago and Aramis Pharma’s Fluimucil.241 Similarly, no respondent
      considers Robitussin as the best alternative to Sinecod and only a very small
      minority of respondents consider it as the second or third best alternative.
      Respondents typically instead list Novartis’ ACC, Teva’s Ambroxol, Bausch’s
      Mucopront, Dr Theiss’ Plantago, Klosterfrau’s Icelandic Moss, Microse’s
      Orvosi, or Sanofi’s Rhinatiol and Libexin as top alternatives.242 The Commission
      notes that many of the alternatives identified by market participants do not appear
      in the market share estimates provided by the Notifying Party.
(262) The Parties' products also differ in terms of their composition and galenic form.
      GSK’s Sinecod contains the active ingredient butamirate, whereas Pfizer CH’s
      Robitussin contains dextromethorphan. Robitussin is only available as a syrup,
      whereas Sinecod is available as a tablet, syrups or drops, of which syrups
      accounts for the lowest share of sales in Hungary (around [10-20]%).
(263) Furthermore, respondents to the market investigation did not raise specific or
      substantiated concerns in relation to antitussives in Hungary.
           OTC-to-OTC / OTC-to-Rx: Multi-symptom cold and flu products (R5A)
            and antitussives (R5D)
(264) Tables 17 and 18 below presents the Parties’ and their competitors’ market shares
      (in value and volume) over the past three years) on the relevant OTC and OTC +
      Rx segments, combining both multi-symptom cold and flu products and
      antitussives.
241   Replies to Q1 - Questionnaire to pharmacies and retailers, question 45.1. Replies to Q3 –
      Questionnaire to competitors, question 63.
242   Replies to Q3 - Questionnaire to competitors, question 62.
                                                     63
 ---pagebreak---  ---pagebreak---       market post-Transaction; and (ii) the Parties do not compete closely since their
      products are either based on different formats and molecules or belong to
      different product categories.243
      Commission’s assessment
(266) In OTC multi-symptom cold and flu products, GSK offers its NeoCitran line of
      products, whereas Pfizer CH markets Advil-branded products. GSK does not offer
      OTC antitussives in Hungary but its Sinecod antitussives are sold under
      prescription. Pfizer CH generally offers its Robitussin antitussives OTC.244
(267) The Commission notes that the increment brought about by Pfizer CH is
      relatively limited, reaching around [5-10]% in value.
(268) The competitive analysis, either of the OTC-to-Rx or the OTC-to-OTC overlap
      does not materially differ compared to that of (OTC) multi-symptom cold and flu
      products and (Rx) antitussives, as laid out in paragraphs 251 to 258 above.
(269) GSK’s multi-symptom products are not considered by respondents to the market
      investigation as an alternative to Pfizer’s Robitussin antitussives. Indeed, none of
      the respondents list NeoCitran as a top alternative to Robitussin. Competing
      products cited include instead Novartis’ ACC, Sanofi’s Rhinathiol Tusso, and
      Aramis Pharma’s Fluimucil.245 Furthermore, the results of the market
      investigation revealed that, in Hungary, the competitive interaction between
      single symptom products, including antitussives, and multi-symptom products is
      limited. Customers are typically more likely to choose single-symptom products
      to treat symptoms such as cough and would rather use multi-symptom products in
      case of more complex illness.246
(270) As mentioned in paragraphs 253 and 255 with regard to multi-symptom cold and
      flu products specifically, Advil Cold & Flu is also not considered by most market
      players as a close competitor of GSK’s NeoCitran. Similarly, as mentioned in
      paragraph 261, GSK's Rx antitussive Sinecod is not considered by most market
      players as a close competitor of Pfizer’s OTC Robitussin.
(271) In addition, responding pharmacies/retailers indicate that patients who buy
      simultaneously cold and flu products tend to buy NeoCitran (but not Pfizer’s
      Advil) alongside either Coldrex or Rhinathiol, but not together with Pfizer’s
      Robitussin (or GSK’s Sinecod).247
243   Form CO, Chapter 5, Section 7, paragraphs 92 to 97.
244   To the exception of Romania, as described in paragraph 293 of this Decision.
245   Replies to Q1 - Questionnaire to pharmacies and retailers, question 45.1.
246   Replies to Q3 - Questionnaire to competitors, question 54.1.
247   Replies to Q1 - Questionnaire to pharmacies and retailers, question 47.
                                                     65
 ---pagebreak---  ---pagebreak---       structure of the relevant market is thus limited. The Commission also notes that
      the estimates provided in Table 19 come from IQVIA’s MIDAS database, when
      looking at both Rx and OTC products. Based on the OTC-IMS database, which
      focuses on OTC products (where both Parties are active and which should thus be
      more accurate as the Parties’ products are not sold Rx) the market would qualify
      as a Group 3, where the Parties’ share would reach [30-40]% with an increment
      of [0-5]%.
(276) Furthermore, Pfizer CH is not active in the manufacturing and supply of topical
      nasal preparations. For responding pharmacies/retailers, patients who buy
      simultaneously cold and flu products tend to buy GSK’s NeoCitran alongside
      non-Pfizer products including Perrigo’s Coldrex or Sanofi’s Rhinathiol, but
      would not typically purchase Pfizer's Advil with GSK's Otrivin.249 In fact, no
      customer cited Pfizer CH products as a top alternative to GSK’s Otrivin, listing
      instead Sanofi’s Rhinospray, Merck’s Nasivin, Gedeon Richter’s Xilomare or
      Polfa Novorin as top alternatives.250
(277) As mentioned in paragraphs 253 and 255 Advil Cold & Flu is also not a close
      competitor of GSK’s NeoCitran in multi-symptom products, where a number of
      strong competitors, including some that also offer topical nasal preparations are
      involved (including Sanofi, Procter & Gamble and Bayer). Looking at adult only
      markets does not materially impact the assessment, as the Parties’ market share
      would decrease, based on available estimates. 251
      Conclusion
(278) In view of the elements discussed in this Section, the Commission concludes that
      the Transaction does not raise serious doubts as to its compatibility with the
      internal market for cold and flu treatments in Hungary.
Malta
(279) In Malta, at ATC 3 class level,252 the Transaction gives rise to one Group 1
      affected markets in relation to multi-symptom cold and flu products (R5A)253.
249   Replies to Q1 - Questionnaire to pharmacies and retailers, question 47.
250   Replies to Q2 - Questionnaire to wholesalers and buying groups, or equivalents, question,
      question 33.1.1.
251   The Parties’ activities do not overlap for paediatric products concerning multi-symptom cold and
      flu products and topical nasal preparations products (OTC 3 – 01B1) in Hungary.
252   The Parties are unable to provide market share data on combinations of ATC 3 classes. Pfizer also
      sells its Robitussin antitussives and expectorants in Malta (ATC 3 classes R5C and R5D
      respectively). The Parties believe that the share of Robitussin in expectorants or antitussives
      would be around [10-20]%. As a result, in light of the lack of overlap in antitussives and
      expectorants, the competitive assessment for any potential market including multi-symptom cold
      and flu products and expectorants and/or antitussives would likely largely follow the same logic as
      the assessment relating to multi-symptom cold and flu products only. In particular, no GSK
      product is listed as a top alternative to Pfizer’s antitussives or expectorants. See Replies to Q1 -
      Questionnaire to pharmacies and retailers, questions 45.1 and 46.1. For these reasons,
      combinations of ATC 3 markets for Malta will not be further discussed in this Decision.
                                                       67
 ---pagebreak---  ---pagebreak---       Commission’s assessment
(284) The market investigation appears to validate the Notifying Party’s argument that
      the market share estimates provided to the Commission may overestimate the
      Parties’ share.256 Competing players in the market also have limited visibility on
      the competitive landscape. No competitor was able to provide a list of the top
      players in the markets for cold and flu treatments in Malta.257 Most competitors
      whose products are offered in Malta are only present locally via independent
      distributors, like GSK and Pfizer CH.
(285) The Commission considers that the Notifying Party’s argument regarding the
      withdrawal of GSK products from the market is not relevant as it does not
      materially impact the competitive assessment. Nurse and Beechams only account
      for a minor share of GSK’s sales in Malta. Its main brands are instead Panadol,
      and to a lesser extent Actifed. Combined, sales of Nurse and Beechams in 2018
      represent about a third of the sales of Panadol. Furthermore, in Malta, Nurse and
      Beechams are not typically considered as must-have products. Conversely, the
      Parties’ other products (more specifically GSK’s Panadol and, to a lesser extent,
      Pfizer’s Advil) are considered as must-have brands for multi-symptom treatments.
      However, the market investigation firmly indicates that other products are also
      considered must-haves in Malta, including in particular Reckitt Benckiser’s
      Nurofen, consistently cited by responding pharmacies/retailers, as well
      Medochemie’s SNIP to a lesser extent.
(286) The Parties’ products also do not appear to be each other’s closest competitor;
      Reckitt Benckiser’s Nurofen is consistently listed by pharmacies/retailers as the
      most suitable alternatives to Advil Cold & Flu, followed by Sanofi’s Rhinathiol in
      most instances, while only one respondent cited Panadol as a second-best
      alternative to Advil.258 Similarly, pharmacies/retailers cite Reckitt Benckiser’s
      Nurofen, Sanofi’s Rhinathiol, Medochemie’s SNIP, as well as McNeil’s Benylin,
      as top alternatives to Panadol. Reckitt Benckiser’s Lemsip, Medochemie’s SNIP
      and Alliance Pharma’s Uniflu are listed as the closer alternatives to Beechams,
      while SNIP and Uniflu are also listed as top alternatives to GSK’s Nurse. Only
      one respondent cited Advil as a second-best alternative to Panadol.259 The
      Commission notes that Sanofi’s Rhinathiol is not listed among the products
      competing in the category in the estimates provided by the Parties, which further
      indicates that the estimates provided above may overestimate the Parties’
      presence on the market in Malta.
      between 2014 and 2018. The methodology leads to important discrepancies. For instance, while
      actual sales data indicates that Pfizer’s Advil Cold generated [40-50]% less sales than GSK’s
      Nurses, the estimates attribute a [90-100]% % higher share to Advil Cold than Nurses.
256   The market shares of the Parties are likely overestimated as a number of products that are not
      originating from the competitors listed in the market data (e.g. Sanofi) were mentioned as
      competing products over the course of the market investigation.
257   Replies to Q3 - Questionnaire to competitors, questions 59 to 63.
258   Replies to Q1 - Questionnaire to pharmacies and retailers, question 44.1.
259   Replies to Q1 - Questionnaire to pharmacies and retailers, question 44.2.
                                                     69
 ---pagebreak--- (287) In addition, other players, including Stada and Procter & Gamble hold marketing
      authorisations for OTC multi-symptom cold and flu products in Malta, namely for
      their Covonia and Vicks products. These players, while not listed in the market
      share estimates provided by the Notifying Party potentially generated sales in
      Malta, or at least represent potential competitors to the Parties.
(288) Furthermore, wholesalers appear to be the gatekeepers to pharmacies in Malta as
      pharmacies do not deal directly with suppliers. According to the market
      investigation, wholesalers have a clear influence on the OTC products and brands
      procured by the pharmacies they supply.260 This specific situation can likely be
      explained by the fact that, unlike in other Member States, pharmaceutical
      companies have no local presence in Malta, as confirmed by all responding
      wholesalers. One states for instance that “[i]n a minutely small country like
      Malta, it is in no way possible for pharmaceutical companies to actually sell
      products themselves in a viable fashion . This would be the equivalent of them
      having a fully fledged setup for a medium size town in the mainland EU. In order
      to keep pricing to patients and consumers down this is carried out through
      distributors”. Another wholesaler states that “[p]harmaceutical companies do not
      sell directly to pharmacies in Malta”.261 The market investigation also indicates
      that while pharmaceutical companies may grant exclusivity towards wholesalers
      for the distribution of their products, these are typically one-sided, as wholesalers
      generally offer products from multiple suppliers and brands, and may even
      distribute consumer goods and other products in addition to pharmaceuticals,262
      making them critical for players such as GSK, which also have a large consumer
      health (including oral health) business.
(289) One responding Maltese wholesaler expressed concerns about the position of the
      Parties post-Transaction, which would allegedly give them a more important
      influence on pricing, and its impact on potential entry. However, that claim is not
      substantiated and is contradicted by another responding wholesaler which states
      that “there are so many products on the market in Malta that higher pricing could
      drive consumers to purchase a different product and therefore sales would
      ultimately decrease”,263 as well as the overwhelming majority of
      pharmacies/retailers, which expect that the Transaction will have no impact or a
      positive impact on prices and product choice.264 The claim is also contradicted by
      the results of the market investigation which indicate that parallel imports of
      multiple suppliers’ products are widespread, implying that the competitive
      landscape in Malta depends on other factors than suppliers’ direct sales in the
      country. One wholesaler explains for instance that “there are parallel traded
      products available of all products that sell decently here and from different
      sources. In some case parallel traders will put products on the market that we do
      not even have”.265 As a result, there are many channels through which products
260   Replies to Q2 - Questionnaire to wholesalers and buying groups, or equivalents, question 11.
261    Replies to Q2 - Questionnaire to wholesalers and buying groups, or equivalents, question 5.
262    Replies to Q2 - Questionnaire to wholesalers and buying groups, or equivalents, question 4.1.
263   Replies to Q2 - Questionnaire to wholesalers and buying groups, or equivalents, question 24.1.1.
264   Replies to Q1 - Questionnaire to pharmacies and retailers, questions 54.1 to 54.3.
265   Replies to Q2 - Questionnaire to wholesalers and buying groups, or equivalents, question 24.1.1.
                                                     70
 ---pagebreak---       are ultimately offered to final consumers, in addition to approved local
      distributors, and the Transaction is unlikely to have any direct impact on these
      channels.
(290) The competitive dynamics would not change materially when assessing markets
      based on adult-only products. Medochemie’s SNIP and GSK’s Actifed are both at
      least partially paediatric products, and removing those would lead to a more
      limited increment in the Parties’ share based on the above estimates. 266
(291) In view of the elements discussed in this Section, the Commission concludes that
      the Transaction does not raise serious doubts as to its compatibility with the
      internal market for cold and flu treatments in Malta.
Romania
(292) In Romania, at ATC 3 class level (or combinations thereof), the Transaction gives
      rise to Group 1 affected markets in relation to (i) Rx antitussives (R5D);267 (ii) Rx
      and OTC multi-symptom cold and flu products and antitussives (R5A + R5D);
      (iii) Rx and OTC multi-symptom cold and flu products, antitussives, and
      expectorants (R5A + R5C + R5D); and (iv) one Group 2 affected market in
      relation to OTC multi-symptom products and expectorants (R5A + R5C).268
266   The Parties’ activities do not overlap for paediatrics products regarding multi-symptom cold and
      flu products (ATC 3 – R5A) in Malta.
267   Other Group 1 affected markets technically arise when looking at Rx-to-Rx overlaps, as a result of
      the Parties’ presence in antitussives (for instance with regards to (i) antitussives and expectorants,
      as well as (ii) multi-symptom products, antitussives and expectorants). However, as there are no
      Rx multi-symptom cold and flu products sold in Romania, and as the Parties do not offer any Rx
      expectorants, the assessment of such markets would not bring any additional element compared to
      the Rx-to-Rx assessment at ATC 3 level or OTC-to-Rx overlaps.
268   In Romania, Group 3 markets arise (i) for Rx Antitussives/Expectorants (R5D+R5C), (ii) for OTC
      Combined Multi-symptom Cold and Flu (R5A), Expectorants (R5C) and Antitussives (R5D), and
      (iii) for Rx Combined Multi-symptom Cold and Flu (R5A), Expectorants (R5C) and Antitussives
      (R5D). Regarding the Rx Antitussives/Expectorants (R5D+R5C) market, the Parties’ combined
      market shares reached [20-30]%, [20-30]%, and [30-40]% by value, in 2016, 2017, and 2018
      respectively. Pfizer CH’s increment amounted to [10-20]%, [10-20]%, and [10-20]% by value, in
      2016, 2017, and 2018 respectively. There will remain strong competitors post-Transaction, such
      as Zambon Group, with market shares of [10-20]%, [20-30]% and [20-30]% by value for the years
      2016, 2017 and 2018 respectively; and Angelini, with market shares of [10-20]%, [20-30]% and
      [20-30]% by value for the years 2016, 2017 and 2018 respectively. Regarding the OTC Combined
      Multi-symptom Cold and Flu (R5A), Expectorants (R5C) and Antitussives (R5D) market, the
      Parties’ combined market shares reached [20-30]%, [20-30]%, and [20-30]% by value, in 2016,
      2017, and 2018 respectively. Pfizer CH’s increment amounted to [0-5]%, [0-5]%, and [0-5]% by
      value, in 2016, 2017, and 2018 respectively. Moreover, there will remain strong competitors post-
      Transaction, such as Reckitt Benckiser, with market shares of [10-20]%, [10-20]% and [10-20]%
      by value for the years 2016, 2017 and 2018 respectively; and Perrigo, with market shares of [5-
      10]%, [5-10]% and [5-10]% by value for the years 2016, 2017 and 2018 respectively. Regarding
      the Rx Combined Multi-symptom Cold and Flu (R5A), Expectorants (R5C) and Antitussives
      (R5D) market, the Parties’ combined market shares reached [20-30]%, [20-30]%, and [30-40]%
      by value, in 2016, 2017, and 2018 respectively. Pfizer CH’s increment amounted to [10-20]%,
      [10-20]%, and [10-20]% by value, in 2016, 2017, and 2018 respectively. Moreover, there will
      remain strong competitors post-Transaction, such as Zambon Group, with market shares of [10-
      20]%, [20-30]% and [20-30]% by value for the years 2016, 2017 and 2018 respectively; and
      Angelini, with market shares of [10-20]%, [20-30]% and [20-30]% by value for the years 2016,
                                                       71
 ---pagebreak---  ---pagebreak---  ---pagebreak---       antitussives (in addition to Rx products), which altogether contribute to blur the
      distinction between OTC and Rx products.271
(299) With regards to Rx products specifically, respondents to the market investigation
      also largely confirm the Notifying Party’s argument in relation to the impact of
      the regulatory process on Rx prices in Romania. The results of the market
      investigation confirmed it is very difficult for an Rx supplier to change supply
      conditions of its products (in particular by raising prices), 272 and express no
      concern that the Combined CH Business would be able to do so post
      Transaction.273
(300) In addition, the market investigation indicated that a significant number of players
      would remain on the antitussive markets post Transaction. Competitors to the
      Parties’ antitussives include Boiron’s Stodal, Ascendis’ Tusend, Engelhard’s
      Prospan, KRKA’s Herbion Iedera, Ipsen’s Paxeladine, and Himalaya’s Koflet.
      These include natural or homeopathic remedies that are not listed in the market
      share estimates provided by the parties.
(301) Furthermore, regardless of market definition, the Parties’ products do not appear
      as particularly close competitors. Firstly, respondents mention that even in the Rx
      space, the products are not each other’s closest competitor, in particular because
      they are not in the same format. For instance, Tussin Forte is available in tablet
      format, while Robitussin is offered as a syrup.274 Secondly, most respondents do
      not mention GSK as a top alternative to Pfizer’s cough products (or conversely)
      in Romania overall. No respondent mentioned Tussin Forte as a top competitor to
      Robitussin. Only one customer and a very small minority of competitors lists
      GSK’s Sinecod (OTC) as a second or third alternative to Pfizer’s Robitussin (Rx).
      Respondents instead consider Boiron’s Stodal, Ascendis’ Tusend, Engelhard’s
      Prospan, KRKA’s Herbion Iedera, Ipsen’s Paxeladine, Biofarm’s Rofedex275 or
      Novartis’ ACC as top alternatives to Pfizer’s Robitussin.276 Similarly, no
      customer and only a very small minority of competitors mentioned Robitussin as
      a second or third alternative to GSK’s antitussives. The main alternatives to GSK
      products include also Boiron’s Stodal, Novartis’ ACC, Engelhard’s Prospan
271   Replies to Q3 - Questionnaire to competitors, question 65. Follow-up replies of Romanian
      respondents to Q1 and Q2.
272   The results of the market investigation confirmed that it is only in limited circumstances that the
      Romanian public authority would allow prices of Rx products to increase, in particular to adjust to
      exchange rate fluctuations or increased prices in a panel of other European Union Member States.
273   Follow-up replies of Romanian respondents to Q1 and Q2.
274   Follow-up replies of Romanian respondents to Q1 and Q2. If a patient has a prescription for a
      specific product from a doctor, the pharmacy can recommend a different product only if it has the
      same format (among others) as the prescribed product.
275   In the Rx space specifically, some respondents mention that Rofedex is the only direct competitor
      to Tussin Forte, as it is based on the same (tablet) format and concentration as Tussin Forte.
      Follow-up replies of Romanian respondents to Q1 and Q2.
276   Replies to Q1 - Questionnaire to pharmacies and retailers, question 45.1. Replies to Q3 -
      Questionnaire to competitors, question 63. Follow-up replies of Romanian respondents to Q1 and
      Q2.
                                                      74
 ---pagebreak---  ---pagebreak---      Supplier                  2016                      2017                    2018
                        Value       Volume        Value      Volume       Value      Volume
 Reckitt
 Benckiser            [10-20]%     [10-20]%     [10-20]%    [10-20]%    [20-30]%    [10-20]%
 Perrigo               [5-10]%      [5-10]%      [5-10]%     [5-10]%    [10-20]%     [5-10]%
 Boiron               [10-20]%       [0-5]%      [5-10]%      [0-5]%     [5-10]%      [0-5]%
 Bristol-Myers         [5-10]%      [5-10]%      [5-10]%     [5-10]%     [5-10]%     [5-10]%
 Sqb.
 Sun Pharma             [0-5]%       [0-5]%       [0-5]%      [0-5]%      [0-5]%      [0-5]%
 Solacium                                                                 [0-5]%      [0-5]%
 pharma                 [0-5]%      [5-10]%       [0-5]%     [5-10]%
 Teva                   [0-5]%       [0-5]%      [5-10]%     [5-10]%      [0-5]%      [0-5]%
 Sanofi                 [0-5]%       [0-5]%       [0-5]%      [0-5]%      [0-5]%      [0-5]%
 Ipsen                  [0-5]%       [0-5]%       [0-5]%      [0-5]%      [0-5]%      [0-5]%
 Urgo                   [0-5]%       [0-5]%       [0-5]%      [0-5]%      [0-5]%      [0-5]%
 Others                 [0-5]%       [0-5]%       [0-5]%      [0-5]%      [0-5]%     [5-10]%
 Total                 100,0%       100,0%       100,0%       100,0%     100,0%       100,0%
                              Source: Confidential Annex RFI#9 – Question 8
        The Notifying Party’s view
(307) The Notifying Party argues that the Transaction does not raise serious doubts for
         the following main reasons: (i) the increment brought about by the Transaction is
         minimal; (ii) the Parties do not compete closely since they largely offer products
         belonging to different ATC classes.
        Commission’s assessment
(308) On this market, the increment brought about by Pfizer CH, which comes from its
         prescription antitussives Robitussin, is minor ([0-5]% in value).
(309) Multi-symptom cold and flu products account for an overwhelming share (around
         95%) of a potential market including both such products and antitussives. As
         such, Pfizer’s strong position on an Rx-only segment for antitussives in Romania
         does not translate into a strong position on markets based on ATC 3 combinations
         including multi-symptom cold and flu products. There is no element that would
         indicate that Pfizer’s limited market share would underestimate the competitive
         constraint the company exerts in the cold and flu area in Romania.
(310) Pfizer has no presence in multi-symptom cold and flu treatments, and thus the
         direct competitive interaction with GSK is primarily focused on antitussives,
         which has been assessed in paragraphs 293ff above.
(311) The results of the market investigation confirmed that the Parties’ products which
         belong to different ATC 3 classes are not particularly close competitors. None of
         the responding pharmacies/retailers or competitors, consider GSK’s multi-
         symptom products as a top alternative to Pfizer’s antitussives and conversely. As
         previous explained, respondents instead consider Boiron’s Stodal, Ascendis’
                                                    76
 ---pagebreak---       Tusend, Engelhard’s Prospan, KRKA’s Herbion Iedera, Ipsen’s Paxeladine,
      Biofarm’s Rofedex282 or Novartis’ ACC, and to a limited extent GSK’s Sinecod as
      alternatives to Pfizer’s Robitussin.283 Similarly, no respondent considered
      Robitussin as a top alternative to GSK’s multi-symptom products. The main
      products competing with Parasinus and/or Theraflu cited by customers include
      mainly Reckitt Benckiser’s Nurofen, as well as Perrigo’s Coldrex, UPSA’s
      Humagrip and Fervex, Sanofi’s Antinevralgic Sinus, Teva’s Tedolfen, and
      Boiron’s Oscillococcinum, and others.284 In particular, Nurofen, Coldrex and
      Fervex are frequently listed as must-have products by Romanian
      pharmacies/retailers.285
(312) Some market respondents raise the possibility that the Transaction may have an
      impact on competition in the cold and flu markets in general, including on prices,
      in particular by an increased bargaining power and additional investments in
      marketing activities, as well as the ability of the Combined CH Business to grow
      the Advil brand, which would be priced at a premium compared to GSK’s
      products.286 However, the Commission notes that as Advil is not currently present
      on the Romanian market, such introduction would likely increase competition in
      multi-symptom cold and flu products (R5A) and markets including such products
      in combinations with others.
            OTC-to-Rx: Multi-symptom cold and flu products (R5A), antitussives
             (R5C) and expectorants (R5C)
(313) In Romania, the Transaction also gives rise to a Group 1 market in relation to
      multi-symptom cold and flu products, expectorants and antitussives. As
      mentioned, GSK offers multi-symptom cold and flu products under its Theraflu
      and Parasinus brands (OTC), as well as its Tussin Forte (Rx) and Sinecod (OTC)
      whereas Pfizer CH markets its Robitussin antitussives (Rx), as well as Robitussin
      Expecto (OTC) line of expectorants. GSK does not offer expectorants in
      Romania.
(314) Table 24 below presents the Parties’ and their competitors’ market shares (in
      value and volume) over the past three years) on an OTC + Rx segment.
282   In the Rx space specifically, some respondents mention that Rofedex is the only direct competitor
      to Tussin Forte, as it is based on the same (tablet) format and concentration as Tussin Forte. See
      follow-up replies of Romanian respondents to Q1 and Q2.
283   Replies to Q1 - Questionnaire to pharmacies and retailers, question 45.1. Replies to Q3 -
      Questionnaire to competitors, question 63. Follow-up replies of Romanian respondents to Q1 and
      Q2.
284   Replies to Q1 - Questionnaire to pharmacies and retailers, question 46.2. Replies to Q2 -
      Questionnaire to wholesalers and buying groups, or equivalents, question 33.1.1. Replies to Q3 -
      Questionnaire to competitors, question 61.
285   Replies to Q1 - Questionnaire to pharmacies and retailers, question 53.1.
286   Replies to Q3 - Questionnaire to competitors, question 69.1.
                                                      77
 ---pagebreak---  ---pagebreak---  ---pagebreak---      Supplier                 2016                         2017               2018
                      Value         Volume          Value      Volume   Value     Volume
 Engelhard           [0-5]%          [0-5]%        [0-5]%       [0-5]% [0-5]%      [0-5]%
 Bionorica           [0-5]%          [0-5]%        [0-5]%       [0-5]% [0-5]%      [0-5]%
 Arzneimi
 Biofarm             [0-5]%          [0-5]%        [0-5]%       [0-5]% [0-5]%      [0-5]%
 (Romania)
 Urgo                [0-5]%          [0-5]%        [0-5]%       [0-5]% [0-5]%      [0-5]%
 Krka                [0-5]%          [0-5]%        [0-5]%       [0-5]% [0-5]%      [0-5]%
 Fiterman            [0-5]%          [0-5]%        [0-5]%       [0-5]% [0-5]%      [0-5]%
 Pharma
 Others              [0-5]%         [5-10]%        [0-5]%      [5-10]% [0-5]%     [5-10]%
 Total               100,0%         100,0%         100,0%       100,0% 100,0%      100,0%
           Source: Table CF 21 of Form CO and Annex MS 2 – Romania to Form CO
        The Notifying Party’s view
(321) The Notifying Party argues that the Transaction does not raise serious doubts for
        the following main reasons: (i) the increment brought about by the Transaction is
        minimal; (ii) the Parties do not compete closely since they offer products
        belonging to different ATC classes.289
        Commission’s assessment
(322) The Commission notes that the increment brought about by Pfizer in this space,
        from its sales of Robitussin Expecto expectorants is marginal, as it is around [0-
        5]% by value in 2018.
(323) Furthermore, as explained in paragraphs 311 above, numerous viable competitors
        remain, both at ATC 3 level and in the combination of multi-symptom products
        and expectorants, including in particular Sanofi, Novartis, and Teva.
(324) In addition, the Parties’ products are not particularly close competitors. There is
        no overlap between the Parties with regards to either multi-symptom cold and flu
        products, or expectorants. The market investigation, as summarized in paragraphs
        228-232 above, clearly indicates that products belonging to different ATC 3
        category are rarely a top alternative to each other.
    Conclusion
(325) In view of the elements discussed in this Section, the Commission concludes that
        the Transaction does not raise serious doubts as to its compatibility with the
        internal market for cold and flu treatments in Romania.
289     Form CO, Chapter 5, Section 7, paragraphs 170 to 171.
                                                     80
 ---pagebreak---  ---pagebreak---       Commission’s assessment
(328) The Commission notes that a relatively important share of Pfizer’s sales ([5-10]%
      out of its total [10-20]% market share) come from the sales of Robitussin Junior,
      which is a paediatric treatment. Based on IQVIA, only Pfizer sells plain
      antitussives exclusively marketed towards children in Slovakia. There is thus no
      overlap in this respect with GSK. As mentioned in Section IV.3.2.1, the market
      investigation indicates that paediatric and adult products form part of distinct
      product markets. This is particularly true of Slovakian pharmacies/retailers,
      which all consider adult and paediatric products as belonging to different markets,
      in particular due to dosage differences.292 Looking at adult plain antitussives only,
      the Parties’ market share would drop to around [30-40]%.
(329) The market investigation indicates that the Parties’ products are not particularly
      close competitors and that there are in any event alternatives to the Parties’
      products remaining on the market post Transaction. Teva’s Stoptussin and
      Ditustat, Sanofi’s Mugotussol and Mucosolvan, and Medochemie’s Dinarex are
      mentioned by customers as a top alternative to both Robitussin and Sinecod.293
      Competitors also list Teva’s Stoptussin and Ditustat, Sanofi’s Mucosolvan, as
      well as other products including IBSA’s Solmucol, Ipsen’ Paxeladine, Walmark’s
      Stopex, and Angelini’s Levopront as viable alternatives.294 A number of the
      products considered as viable alternatives do not belong to the same ATC 4
      category which mitigates the relevance of the ATC 4 category.
(330) Internal documents of the Parties also seem to mitigate the relevance of the ATC
      4 category as they track competing products in both plain antitussives and
      combined antitussives jointly.295
(331) In addition, all of the responding Slovak pharmacies/retailers consider that multi-
      symptoms cold and flu treatments are interchangeable with products marketed for
      single symptoms and that patients use indistinctively a product marketed for
      multiple symptoms in order to cure a cough.296 As a result, the Parties antitussive
      products also face some competitive constraint from multi-symptom products
      sold in Slovakia including Sanofi’s Paralen, Perrigo’s Coldrex, Reckitt
      Benckiser’s Nurofen, Schwabe’s Kaloba, Bayer’s Aspirin, or Boiron’s
      Oscillocccinum.
(332) Furthermore, the Parties’ antitussives brands are nor particularly strong in
      Slovakia. Responding Slovak pharmacies/retailers do not consider GSK products,
      including Sinecod, to be must-haves, and only one mentioned Robitussin as a
      must-have product in Slovakia.297
292   Replies to Q1 - Questionnaire to pharmacies and retailers, questions 42.4 and 42.5.
293   Replies to Q2 - Questionnaire to wholesalers and buying groups, or equivalents, questions 32.1.1
      and 33.1.1.
294   Replies to Q3 - Questionnaire to competitors, questions 62 and 63.
295   See the document [Internal document].
296   Replies to Q1 - Questionnaire to pharmacies and retailers, question 42.1.
297   Replies to Q1 - Questionnaire to pharmacies and retailers, questions 51 and 52.
                                                     82
 ---pagebreak--- (333) Finally, respondents to the market investigation did not raise specific or
       substantiated concerns in relation to the cold and flu treatments segment in
       Slovakia.
(334) In view of the elements discussed in this Section, the Commission concludes that
       the Transaction does not raise serious doubts as to its compatibility with the
       internal market for antitussives in Slovakia.
United Kingdom
(335) In the United Kingdom, at ATC 3 class level, the Transaction gives rise to no
       overlap. Affected markets arise however in relation to combinations of ATC 3
       classes in the cold and flu area including Group 1 markets in (i) OTC multi-
       symptom cold and flu treatments and expectorants (R5A + R5C), (ii) OTC multi-
       symptom cold and flu treatments and antitussives (R5A + R5D), (iii) OTC multi-
       symptom cold and flu products, expectorants, and antitussives (R5A + R5C +
       R5D).298
(336) GSK offers multi-symptom cold and flu products under its Nurse and Beechams
       brands, whereas Pfizer CH markets its Robitussin line of antitussives and
       expectorants.
(337) Tables 27, 28, and 29 below presents the Parties’ and their competitors’ market
       shares (in value and volume) over the past three years) in the various ATC 3
       combinations giving rise to Group 1 affected markets.
298    Group 3 markets arise for OTC expectorants and antitussives (R5C + R5D), and for Cold or Flu
       Remedies/Nasal Decongestants/ Decongest Rubs/ Inhalants/Sore Throat Remedies/Nasal Saline
       Solutions/Expectorants/Cough Relievers (01B1+01B2+01B3+01C1+01F1+01A2+01A1) in the
       UK. Regarding the OTC expectorants and antitussives (R5C + R5D) market, the Parties’
       combined market shares reached [20-30]%, [20-30]%, and [20-30]% by value, in 2016, 2017, and
       2018 respectively. GlaxoSmithKline’s increment amounted to [0-5]%, [0-5]%, and [0-5]% by
       value, in 2016, 2017, and 2018 respectively. Moreover, there will remain strong competitors post-
       Transaction, such as Johnson & Johnson, with market shares of [20-30]%, [20-30]% and [20-
       30]% by value for the years 2016, 2017 and 2018 respectively; and Stada, with market shares of
       [10-20]%, [10-20]% and [10-20]% by value for the years 2016, 2017 and 2018 respectively.
       Regarding the Cold or Flu Remedies/Nasal Decongestants/ Decongest Rubs/ Inhalants/Sore
       Throat         Remedies/Nasal         Saline        Solutions/Expectorants/Cough           Relievers
       (01B1+01B2+01B3+01C1+01F1+01A2+01A1) market, the Parties’ combined market shares
       reached [20-30]%, [30-40]%, and [30-40]% by value, in 2016, 2017, and 2018 respectively. Pfizer
       CH’s increment amounted to [5-10]%, [5-10]%, and [5-10]% by value, in 2016, 2017, and 2018
       respectively. Moreover, there will remain strong competitors post-Transaction, such as Johnson &
       Johnson, with market shares of [20-30]%, [20-30]% and [20-30]% by value for the years 2016,
       2017 and 2018 respectively; and Reckitt Benckiser, with market shares of [10-20]%, [10-20]%
       and [10-20]% by value for the years 2016, 2017 and 2018 respectively. Considering the above, it
       is unlikely that any competition concerns can arise as a result of the Transaction in the markets for
       OTC expectorants and antitussives (R5C + R5D), and for Cold or Flu Remedies/Nasal
       Decongestants/      Decongest     Rubs/     Inhalants/Sore     Throat     Remedies/Nasal      Saline
       Solutions/Expectorants/Cough Relievers (01B1+01B2+01B3+01C1+01F1+01A2+01A1) in the
       UK.
                                                       83
 ---pagebreak---  ---pagebreak---     Supplier                     2016                        2017                        2018
                        Value         Volume          Value        Volume         Value       Volume
Johnson &             [10-20]%       [10-20]%       [10-20]%      [10-20]%      [10-20]%     [10-20]%
Johnson
Reckitt               [10-20]%       [10-20]%       [10-20]%      [10-20]%      [10-20]%     [10-20]%
Benckiser
Stada                  [5-10]%        [5-10]%        [5-10]%       [5-10]%       [5-10]%      [5-10]%
Perrigo                 [0-5]%         [0-5]%         [0-5]%        [0-5]%        [0-5]%       [0-5]%
Lofthouse               [0-5]%       [10-20]%         [0-5]%      [10-20]%        [0-5]%     [10-20]%
Others                 [5-10]%       [10-20]%        [5-10]%      [10-20]%       [5-10]%     [10-20]%
Total                  100,0%         100,0%         100,0%         100,0%       100,0%       100,0%
               Source: Table CF 10 of Form CO and Annex MS 2 – United Kingdom
         The Notifying Party’s view
(338) The Notifying Party argues that the Transaction does not raise serious doubts for
        the following main reasons: (i) there is significant competition in the UK markets
        in particular from private label products which are not correctly assessed by
        IQVIA data; (ii) the Parties do not compete closely, in particular since they offer
        products belonging to different ATC classes.299
        Commission’s assessment
(339) All of these plausible markets may be assessed jointly, as the competitive
        dynamics are similar across ATC 3 combinations, considering the lack of overlap
        between the Parties at ATC 3 level.300 The competitive dynamics do not change
        materially when assessing markets based on adult only products, where the
        Parties’ market shares are essentially similar.301
(340) The market investigation largely validated the Notifying Party’s main arguments,
        which mitigate the high level of market shares witnessed in the UK.
(341) Respondents to the market investigation confirmed that throughout the cold and
        flu area, there are many alternative to the Parties’ product in each category, and
        that the Parties’ products are not close competitors:
              In multi-symptom products, the main competitors to GSK’s Nurse and
               Beechams cited by respondents to the market investigation include
               primarily Reckitt Benckiser’s Nurofen Cold & Flu and Lemsip, and Johnson
               & Johnson’s Benylin and Sudafed. Others include Aspar’s Hot Lemon, as
               well as multi-symptom cold and flu products offered by Galpharm,
299     Form CO, Chapter 5, Section 7, paragraphs 101 to 109.
300     GSK holds a marketing authorisation for Tixylix in the UK, which is erroneously recorded by
        IQVIA under ATC Code R5D (instead of ATC 3 Code R5F, for which Pfizer is not present)
        according to the Notifying Party. This was confirmed during the market investigation, as Tixylix
        was not identified as a relevant product by any respondent.
301     The Parties’ activities do not overlap for paediatric products regarding multi-symptom cold and
        flu, expectorants and antitussives (ATC 3 – R5A+R5C+R5D) in the United Kingdom.
                                                         85
 ---pagebreak---              Numark, Solpadeine, or Olbas.302 No Pfizer product is mentioned by
             respondents as a top alternative in this category.
            In antitussives, the main competitors of Pfizer’s Robitussin cited by
             respondents include primarily Johnson & Johnson’s Benylin and Actifed,
             Reckitt Benckiser’s Lemsip, and Stada’s Covonia, Perrigo’s Buttercup and
             Bronchostop.303 No GSK product is mentioned by respondents as a top
             alternative in this category.
            In expectorants, the main competitors of Pfizer’s Robitussin cited by
             respondents include Johnson & Johnson’s Benylin, Reckitt Benckiser’s
             Lemsip, Stada’s Covonia, and Numark’s Chesty Cough.304 No GSK product
             is mentioned by respondents as a top alternative in this category.
(342) Furthermore, Pfizer is not a particularly strong player in the cold and flu area in
      general in the UK. While a majority of responding customers consider GSK
      offers must-have products, in particular Nurse and Beechams, in addition to nasal
      sprays,305 an overwhelming majority consider that Pfizer products in the cold and
      flu space (i.e. Robitussin) are not must-haves.306 Other competitors of the Parties,
      which are active in both multi-symptom cold products and cough treatments, have
      must-have brands in more than one product category. Such competitors include in
      particular Johnson & Johnson and Reckitt Benckiser.307
(343) The market investigation also confirms that private label products play a
      particularly preponderant role on the UK market. Over two third of responding
      pharmacy/retailers consider that these products are considered as substitutable to
      branded products by patients.308 For each product category identified above,
      many respondents mention private label products as top alternatives to branded
      products, including the Parties’. An important share of these sales are not
      reflected in the IQVIA data provided. As a result the Parties’ market shares as
      laid out in Tables 27, 28, and 29 are not a fully accurate reflection of the
      competitive dynamics of the market and are likely to be overestimated.
(344) Finally, respondents to the market investigation did not raise specific or
      substantiated concerns in relation to the cold and flu treatments segment in the
      United Kingdom.
302   Replies to Q1 - Questionnaire to pharmacies and retailers, question 44.2. Replies to Q3 -
      Questionnaire to competitors, question 60.
303   Replies to Q1 - Questionnaire to pharmacies and retailers, question 45.1. Replies to Q3 -
      Questionnaire to competitors, question 63.
304   Replies to Q1 - Questionnaire to pharmacies and retailers, question 46.1. Replies to Q3 -
      Questionnaire to competitors, question 63.
305   Replies to Q1 - Questionnaire to pharmacies and retailers, question 51. Replies to Q2 -
      Questionnaire to wholesalers and buying groups, or equivalents, questions 33.2.
306   Replies to Q1 - Questionnaire to pharmacies and retailers, question 52. Replies to Q2 -
      Questionnaire to wholesalers and buying groups, or equivalents, questions 32.2.
307   Replies to Q1 - Questionnaire to pharmacies and retailers, question 53. Replies to Q2 -
      Questionnaire to wholesalers and buying groups, or equivalents, questions 34.1.
308   Replies to Q1 - Questionnaire to pharmacies and retailers, question 50.2.
                                                    86
 ---pagebreak--- (345) In light of the elements discussed in this Section, the Commission concludes that
       the Transaction does not raise serious doubts as to its compatibility with the
       internal market for cold and flu treatments in the United Kingdom.
  3.3. Gastrointestinal treatments
       3.3.1.   Product market definition
(346) OTC gastrointestinal treatments include a variety of products typically used on a
       short-term or intermittent basis against reflux symptoms (e.g. heartburn and
       regurgitation), including antiacids, antiflatulents, and antiulcerants.
(347) GSK offers gastrointestinal treatments under the ENO, Andrews Liver Salts, and
       Pantoloc Control brands. Pfizer CH is active in particular with products sold
       under the brands Nexium, Magnesia Bisurata, Simeco, and Aludrox.
(348) In terms of ATC classification, gastrointestinal treatments relevant in the context
       of the Transaction are classified in the ATC class "A2 – Antacids, Antiflatulents,
       Antiulcerants". In terms of OTC classification, the relevant products are classified
       in OTC class 03. Table 30 below summarises the relevant sub-categories of
       gastrointestinal treatment ATC and OTC classes.
              Table 30 – Gastrointestinal treatments – ATC/OTC Classes
                ATC Code                                         OTC Code
              Antacids, Antiflatulents,
                   Antiulcerants
                                                                     N/A
                  Antacids, Antiflatulents,
                         Carminatives
        A2A                                     03G1                   Antacids
 A2             A2A1        Plain Antacids
                                                03G9         Oth Digest.T. & Stomach R
                A2A2 Plain Antiflatulents 03A3                      Antiflatulents
                         Antiulcerants                               N/A
                A2B1        H2 Antagonists      03G2               H2 Antagonists
        A2B
                              Acid Pump
                A2B2                            03G3           Proton Pump Inhibitors
                               Inhibitors
                                Source: Form CO – Table GI 2
                                                 87
 ---pagebreak---       Commission’s precedents
(349) The Commission has assessed gastrointestinal treatments sold OTC at ATC 3 and
      ATC 4 level, both based on individual classes and combinations thereof.309 In
      more recent cases, the Commission has assessed products in this area on the basis
      of a combination of ATC 3 classes including all antacids, antiflatulents and
      carminatives, and antiulcerants (ATC 3 classes A2A + A2B).310 The Commission
      also assessed markets at ATC 4 level for plain antacids only (ATC 4 class
      A2A1),311 and proton pump inhibitor or “PPI” (ATC 4 class A2B2).312
(350) The Commission has also considered whether a segmentation of gastrointestinal
      treatments (and in particular H2 Antagonists313 or Proton Pump Inhibitors)314 by
      molecule was warranted, but ultimately left the question open.315
      The Notifying Party’s view
(351) The Notifying Party argues that regardless of precise market definition, the
      different types of gastrointestinal treatment typically exert some degree of
      competitive pressure on one another.316
309   See for example Commission decision of 4 August 2018 in case M.7919 – Sanofi/Boehringer
      Ingelheim Consumer Healthcare Business, paragraph 143 et seq.; Commission decision of 28
      January 2015 in case M.7276 – GlaxoSmithKline/ Novartis Vaccines Business (Excl. Influenza) /
      Novartis Consumer Health Business, paragraph 333 and 334; Commission decision of
      19November 2015 in case M.3544 – Bayer Healthcare/Roche (OTC business), paragraph 16 and
      18; Commission decision of 4 February 2009 in case M.5253 – SanofiAventis/Zentiva, paragraph
      35; Commission decision of 29 June 2018 in case M.8889 – Teva / PGT OTC Assets, paragraph 89
      and Commission decision of 25 October 2010 in case M.5953 – Reckitt Benckiser/SSL, paragraphs
      38 to 43.
310   Commission decision of 4 August 2018 in case M.7919 – Sanofi/Boehringer Ingelheim Consumer
      Healthcare Business, paragraph 143.
311   Commission decision of 28 January 2015 in case M.7276 – GlaxoSmithKline/ Novartis Vaccines
      Business (Excl. Influenza) / Novartis Consumer Health Business, paragraph 336.
312   Commission decision of 29 June 2010 in case M.8889 – Teva / PGT OTC, paragraphs 85 to 87
      and Commission decision of 29 July 2015 in case M.7645 Mylan/Perrigo, paragraph 50.
313   H2 antagonists function by blocking signals generated by histamine receptors on cells that are
      responsible for acid secretion, thus lowering the acidity of the stomach by preventing the acid’s
      secretion into the stomach. The four common types of H2 antagonists (generally available OTC in
      lower doses and by prescription in higher doses) are (i) ranitidine, (ii) famotidine, (iii) cimetidine,
      and (iv) nizatidine. H2 antagonists are categorised in ATC 3 category A2B (ATC 4 category
      A2B1)7 and OTC category 03G2 – H2 antagonists.
314   Proton Pump Inhibitors (“PPIs”) work by blocking (inhibiting) acid secretion in the stomach. Acid
      is pumped into the stomach by a specific enzyme (the hydrogen-potassium adenosine
      triphosphatase enzyme system or “proton pump”). The five most common types of PPIs are (i)
      pantoprazole, (ii) omeprazole, (iii) lansoprazole, (iv) esomeprazole, and (v) raberprazole. OTC
      PPIs are typically intended to be used for frequent symptoms of reflux/heartburn (but not for
      indigestion). According to the Notyfying Party, PPIs have been found to be more effective than
      H2 antagonists in many patients in reducing the production of stomach acids. PPIs are categorised
      in ATC 3 category A2B (ATC 4 category A2B2) and OTC category 03G3 - Proton pump
      inhibitors.
315   Commission decision of 29 June 2010 in case M.8889 – Teva / PGT OTC, paragraphs 85 to 87.
316   Form CO, Chapter 6, Section 6, paragraph 35.
                                                     88
 ---pagebreak---       Commission’s assessment
(352) For the purposes of the present case, the exact market definition can be left open,
      as no serious doubts regarding the compatibility of the Transaction with the
      internal market arise under any plausible alternative market definition (namely, at
      ATC 3 level, ATC 4 level, combinations thereof, or molecule level).
      3.3.2.      Geographic market definition
(353) As explained in Section IV.1.2, the Commission considers the relevant product
      markets, as defined in Section IV.3.3.1, to be national in scope.
      3.3.3.      Competitive assessment
(354) Based on historical sales data, overlaps between the Parties’ activities in
      gastrointestinal treatments arose, mostly in connection to GSK’s Pantoloc
      Control product, an antiulcerant (and more specifically a PPI), under licence from
      Takeda. [Information on product license]. Pantoloc Control will not be sold
      anymore by GSK going forward, a fact confirmed by Takeda. Consequently, all
      affected markets arising as a result of GSK sales of Pantoloc Control are
      disregarded for the purposes of the present Decision.
(355) On a forward-looking basis, affected markets arise only in Ireland, and solely
      based on combination of ATC 3 or ATC 4 classes together, as the Parties’
      activities do not overlap at ATC 3 or 4 levels separately. Specifically, the Parties’
      activities give rise to affected markets in Ireland (in gastrointestinal treatments on
      a forward-looking basis) in combinations involving both PPIs (ATC 4 class
      A2B2, including Pfizer’s Nexium Control) and plain antiacids (ATC 4 class
      A2A1, including GSK’s Andrews Liver Salts).317 Such affected markets arise on
      the basis of the following potential markets (i) ATC 3 classes A2A + A2B; (ii)
      ATC 4 classes A2A1 + A2B1 + A2B2; and (iii) ATC 4 classes A2A1 + A2B2.
(356) The Commission notes that all these potential markets are Group 3 markets,
      which involve a minimal (around [0-5]%) increment due to GSK’s limited sales
      of Andrews liver Salt. Furthermore, a number of other strong players, including
      Reckitt Benckiser, Johnson & Johnson, Bayer, Sanofi, Perrigo and Novartis will
      remain on these segments post-Transaction.
(357) No affected market arises on the basis of molecules as Nexium Control and
      Andrews Liver Salts are not based on the same active ingredients, as the former
      contains esomeprazole and the latter contains instead sodium bicarbonate, citric
      acid and magnesium sulphate.
317   According to the Notifying Party, a discrepancy arises between the classification of Andrews Liver
      Salts in the MIDAS and the OTC-IMS databases. In MIDAS, the product is classified as A2A1
      (plain antacid) whereas in OTC-IMS, the product is classified as 03A9 (Other digestive treatments
      & stomach remedies) rather than as plain antacids (03G1), possibly due to the fact that Andrews
      Liver Salts is indicated as both an antacid and a laxative. Should Andrews Liver Salts be qualified
      as a laxative, no overlap with Pfizer CH would arise.
                                                      89
 ---pagebreak--- (358) No respondent to the market investigation raised concern with regards to the
       markets for OTC gastrointestinal treatments in Ireland.318
       3.3.4.     Conclusion
(359) In view of the elements discussed in this Section, the Commission concludes that
       the Transaction does not raise serious doubts as to its compatibility with the
       internal market for gastrointestinal treatments in the EEA.
  3.4. Nutrition and digestive health
(360) The activities of the Parties within Nutrition and Digestive Health overlap in
       specific EEA Member States regarding (i) multivitamins and (ii) laxatives.
       Regarding multivitamins, the Parties’ activities overlap in Slovakia and result in
       an affected market. Regarding laxatives, the Transaction does not give rise to
       affected markets in any EEA Member State under any plausible market
       definition.319 For this reason, the remainder of this Section will exclusively deal
       with multivitamins.
       3.4.1.     Product market definition
(361) Multivitamins are dietary supplements containing multiple vitamins and minerals.
       They are generally purchased as a food supplement. The purpose of multivitamins
       is to ensure that patients receive all necessary vitamins if they do not obtain them
       through their diet or due to a medical condition.
(362) In multivitamins, GSK manufactures and offers products mainly under the Cetebe
       brand. Pfizer CH is active in particular with the brands Centrum and Multi-tabs.
(363) In terms of ATC classification, vitamins are classified in the ATC class "A11 –
       Vitamins". In terms of OTC classification, vitamins are classified in the OTC
       class 04. Table 31 below summarises the sub-categories of multivitamins ATC
       classes.
318    Replies to Q1 - Questionnaire to pharmacies and retailers, question 55.1. Replies to Q2 -
       Questionnaire to wholesalers and buying groups, or equivalents, questions 38.
319    In laxatives, the only overlap between the Parties’ products arises in Italy. In its decisional
       practice, the Commission has considered that “all laxatives constitute one relevant market” (see,
       e.g., M.7919 – Sanofi/Boehringer Ingelheim, paragraph 205) and in a recent case it concluded that
       “the results of the market investigation do not indicate that the drugs for constipation should be
       defined by molecule or at the ATC4 level” (M.7379 – Mylan/Abbott EPD-DM, paragraph 203),
       thus determining that the ATC 3 level is the appropriate product market. In turn, the Parties would
       have an approximate market share of [5-10]% for laxatives at the ATC 3 level in Italy. Evidence
       collected over the course of the market investigation also confirmed that GSK and Pfizer CH’s
       products have different profiles and do compete with other types of laxatives in Italy (Minutes of a
       call with a wholesaler dated 16 April 2019).
                                                      90
 ---pagebreak---                        Table 31 – Vitamins – ATC/OTC Classes
                   ATC Code                                         OTC Code
                                                            Vitamins, Minerals & Nutritional
                       Vitamins
                                                                       Supplements
                                                                       Multivitamins with
                 Multivitamins with minerals
                                                                             minerals
               A11A1              Prenatal                         04A4           Prenatal
      A11A
               A11A2             Paediatric                04A 04A2                Child
               A11A3             Geriatric                         04A3           Seniors
                           Other multivitamins
A11            A11A4                                   04          04A1            Adult
                              with minerals
                                                                     Multivitamins without
               Multivitamins without minerals
                                                                              mineral
               A11B1              Prenatal                         04B4           Prenatal
      A11B A11B2                 Paediatric                04B 04B2                Child
               A11B3             Geriatric                         04B3           Seniors
                           Other multivitamins
               A11B4                                               04B1            Adult
                              with minerals
                               Source: Form CO – Table NDH 1
      Commission’s precedents
(364) The Commission has previously assessed multivitamins at ATC 3 and ATC 4
       level, but also on the basis of OTC 2 and OTC 3 level, leaving open whether a
       sub-segmentation according to the target groups (prenatal, child, seniors or adult
       use), form of administration (capsules, powders, liquid) or sales channels
       (pharmacy or mass market) is needed.320
      The Notifying Party’s view
(365) The Notifying Party considers that multivitamins should be examined at the ATC
       3 level.321
      Commission’s assessment
(366) For the purposes of the present case, the most plausible product markets in the
       multivitamins space consist of ATC 3 / OTC 3 classes, which can be further
       segmented based on ATC 4 / OTC 4 class (which take into account the product’s
       target groups or form of administration). Hence the competitive assessment will
       focus on the effects of the Transaction on these segments.
320   See Commission decision of 19 December 2008 in case M.5295 – Teva/Barr; Commission
      decision of 9 June 2011 in case M.6162 – Pfizer/Ferrosan Consumer Healthcare Business and
      Commission decision of 4 August 2016 in case M.7919 – Sanofi/Boehringer Ingelheim Consumer
      healthcare Business.
321    Form CO, Chapter 7, Section 6, paragraph 24.
                                                    91
 ---pagebreak---       3.4.2.     Geographic market definition
(367) As explained in Section IV.1.2, the Commission considers the relevant product
      markets, as defined in Section IV.3.4.1, to be national in scope.
      3.4.3.     Competitive assessment
(368) In Slovakia, at ATC 4 level, the Transaction gives rise to a Group 3 affected
      market in relation to adult multivitamins (ATC 4 - A11A4 / OTC 4 - 04A1), with
      a combined market share of the Parties of [20-30]% in value for 2018.322 GSK’s
      sales of multivitamins are very low in Slovakia and the increment brought about
      by the Transaction is very small (around [0-5]%). Various strong competitors are
      active on this market segment, such as Walmark, Merck, Dr. Max, and many
      others.
(369) Respondents to the market investigation did not raise any concerns regarding the
      effect of the Transaction in the multivitamins category.
(370) One respondent raised concerns regarding the combination of Cetebe and
      Centrum that would allegedly lead the Parties to have a strong position on the
      vitamins market in Germany.323 However, the Parties do not overlap at ATC 3 /
      ATC 4 level in Germany, as they are focused on the supply of different kind of
      vitamins; GSK offers mainly plain vitamin C and vitamin C combinations,
      whereas Pfizer CH offers multivitamins, as well as other supplements, including
      calcium and magnesium supplements.324 Potential effects arising from the
      combinations of different products is assessed under Section IV.4 regarding
      conglomerate effects.
      3.4.4.     Conclusion
(371) In light of the elements discussed in this Section, the Commission concludes that
      the Transaction does not raise serious doubts as to its compatibility with the
      internal market for multivitamins in the EEA.
4.    CONGLOMERATE EFFECTS
(372) Competitive concerns might not be limited to horizontal unilateral effects.
      Conglomerate effects stem from a concentration where the undertakings
      concerned are active on closely related markets (for example, as suppliers of
      complementary products or products that belong to the same product range). In
      case of a concentration giving rise to conglomerate effects, the Commission will
      assess the concentration in accordance to the framework set by the Non-
      Horizontal Merger Guidelines.325 The market investigation in the present case
      aimed at understanding whether the combination of the Parties’ product portfolios
322   Form CO, Chapter 7, Section 7, paragraph 40.
323   Replies to Q3 - Questionnaire to competitors, question 73.1.
324   Parties’ reply to RFI 9 dated 21 June 2019.
325   Guidelines on the assessment of non-horizontal mergers under the Council Regulation on the
      control of concentrations between undertakings ("Non-Horizontal Merger Guidelines"), OJ C 265,
      18.10.2008, paragraph 7.
                                                     92
 ---pagebreak---       could lead to competition concerns as a result of tying and bundling practices by
      the Combined CH Business, either in relation to a specific product category or
      across product categories.
      Notifying Party’s view
(373) The Notifying Party argues in particular that (i) the Transaction will not grant the
      Combined CH Business the ability to foreclose competitors via tying or bundling
      practices, in particular since Pfizer CH’s products are not strongly
      complementary to GSK’s, and because many rivals have wider OTC product
      portfolios than the Parties; and that (ii) the Combined CH Business will have no
      additional incentive to engage in bundling practices compared to GSK pre-
      Transaction due to the limited complementarity between the Parties’ products. 326
      Commission’s assessment
(374) The evidence gathered in the context of the market investigation supports the
      Notifying Party’s claim that the Transaction would not increase the ability and
      incentive of the Combined CH Business to foreclose competitors through tying
      and bundling practices.
(375) Indeed, the results of the market investigation indicated that tying or bundling is
      not a common feature in the pharmaceutical OTC space, as a majority of
      competitors or wholesalers do not offer bundles to their customers.327 Wholesalers
      and retailers also generally procure the specific products they need on an
      individual basis.328
(376) Market participants also noted that they would generally be able to turn to
      alternative suppliers (and products) in the OTC space besides the Combined CH
      Business, irrespective of the product category,329 limiting the ability of the
      Combined CH Business to foreclose competitors through tying and bundling
      practices.330
(377) Some respondents raised non-specific concerns linked to the Combined CH
      Business’ enlarged product range.331 According to these respondents, such
      enlarged portfolio would in particular grant the Combined CH Business the
      ability to monopolise shelf space at retail level, by offering a full range of
      complementary OTC products. The market investigation, and in particular
326   Form CO, Chapter 2, Section 6, paragraph 30ff.
327   Replies to Q1 - Questionnaire to pharmacies and retailers, question 8; Replies to Q2 -
      Questionnaire to wholesalers and buying groups, or equivalents, question 12.; Replies to Q3 -
      Questionnaire to competitors, question 8.
328   See Minutes of a call with a wholesaler dated 14 March 2019; Minutes of a call with a pharmacy
      chain dated 01 April 2019.
329   See Sections IV.3.1.3, IV.3.2 for alternatives in the Combined CH Business’ main market
      segments.
330   Non-Horizontal Merger Guidelines, paragraph 99.
331   Replies to Q3 - Questionnaire to competitors, question 73.1. Minutes of a call with a competitor
      dated 14 March 2019.
                                                    93
 ---pagebreak---       responses by pharmacies and other retailers have firmly dismissed that
      possibility, as an overwhelming majority of respondents indicated that, across
      product categories, the Transaction will either have no impact on the shelf space
      for products of the Combined CH Business, or will even lead to less shelf
      space,332 as pharmacies and retailer tend to offer products from different suppliers
      in every product category.
(378) Most of the concerns raised during the market investigation, in particular by a
      number of competitors, appear more likely to have the character of an efficiency,
      such as concerns relating to the Combined CH Business offering discounts over a
      wider portfolio of products or having an increased ability to market its products
      (including via advertising).333
(379) Furthermore, the market investigation indicates that a number of competitors,
      which have a comparable or wider portfolio of OTC products (i.e. across all OTC
      categories) will remain on the markets post-Transaction, further limiting the
      ability of the Combined CH Entity to attempt to foreclose competitors through
      tying and bundling practices.334 The most cited examples were competitors like
      Sanofi, Johnson & Johnson, Bayer, or Reckitt Benckiser.335 This applies to all
      EEA countries where the Parties’ activities result in an affected market (even if
      the competitors named slightly differ from one country to another). One notable
      exception is Malta where a majority of pharmacies indicated that no other player
      had a similar or larger OTC product range than the Combined CH Business.
      However, neither GSK nor Pfizer (nor any other pharmaceutical company) is
      directly active in Malta. In this country, the Parties offer products via distributors
      and parallel imports are commonplace.336 For these reasons, conglomerate effects
      are unlikely to arise in Malta.
(380) Respondents raising concerns also typically focused on conglomerate effects
      relating to a specific product category, in particular TPM, as well as conglomerate
      effects between TPM and other product categories. In that respect, the global
      remedy offered by the Parties, described in Section V, removes almost entirely
      the horizontal overlaps in the TPM segment, and thus removes any potential
      conglomerate effect in relation to these markets as well.
(381) Considering that the Commission concludes that the Combined CH Business will
      not have the ability to engage in tying and bundling practices, it is not necessary
      to investigate whether it would have the incentive to engage in such practices.
(382) In view of the above, and in particular the lack of ability of the Combined CH
      Business to engage in tying and bundling practices aimed at foreclosing
332   Replies to Q1 - Questionnaire to pharmacies and retailers, questions 28.5, 41.5 and 54.5.
333   Replies to Q3 - Questionnaire to competitors, question 73.1.
334   Non-Horizontal Merger Guidelines, paragraph 103.
335   Replies to Q1 - Questionnaire to pharmacies and retailers, question 4; Replies to Q2 -
      Questionnaire to wholesalers and buying groups, or equivalents, question 10; Replies to Q3 -
      Questionnaire to competitors, question 6.
336   See paragraphs 280 and 289.
                                                     94
 ---pagebreak---       competitors, the Transaction does not to lead to serious doubts as to its
      compatibility with the internal market in relation to conglomerate effects.
V.    COMMITMENTS
1.    FRAMEWORK FOR THE ASSESSMENT OF THE COMMITMENTS
(383) Where a concentration raises serious doubts as regards its compatibility with the
      internal market, the Parties may undertake to modify the concentration so as to
      remove the grounds for the serious doubts identified by the Commission.
      Pursuant to Article 6(2) of the Merger Regulation, where the Commission finds
      that, following modification by the undertakings concerned, a notified
      concentration no longer raises serious doubts, it shall declare the concentration
      compatible with the internal market pursuant to Article 6(1)(b) of the Merger
      Regulation.
(384) As set out in the Commission’s Remedies Notice,337 commitments have to
      eliminate the competition concerns entirely, and have to be comprehensive and
      effective from all points of view.338
(385) In the first phase of the Commission's investigation of a concentration ("Phase
      I"), commitments offered by the Parties can only be accepted where the
      competition concerns are readily identifiable and can easily be remedied. The
      competition concerns therefore need to be straightforward and the remedies clear-
      cut and sufficient to clearly rule out "serious doubts" within the meaning of
      Article 6(1)(c) of the Merger Regulation, so that it is not necessary to enter into
      an in-depth ("Phase II") investigation. Where the assessment confirms that the
      proposed commitments remove the grounds for serious doubts on this basis, the
      Commission clears the concentration in Phase I.339
(386) In assessing whether commitments will maintain effective competition, the
      Commission considers all relevant factors, including the type, scale, and scope of
      the proposed commitments, with reference to the structure and particular
      characteristics of the market in which the concentration is likely to significantly
      impede effective competition, including the position of the Parties and other
      participants on the market.340
(387) In order for commitments to comply with those principles, they must be capable
      of being implemented effectively within a short period of time. Concerning the
      form of acceptable commitments, the Merger Regulation gives discretion to the
      Commission as long as the commitments meet the requisite standard. Structural
      commitments will meet the conditions set out above only in so far as the
337   Commission Notice on remedies acceptable under Council Regulation (EC) No 139/2004 and
      under Commission Regulation (EC) No 802/2004 (OJ C 267, 22.10.2008, pages 1 to 27) ("the
      Remedies Notice").
338   Remedies Notice, paragraphs 9 and 61.
339   Remedies Notice, paragraph 81.
340   Remedies Notice, paragraph 12.
                                                95
 ---pagebreak---       Commission is able to conclude with the requisite degree of certainty, at the time
      of its Decision, that it will be possible to implement them and that it will be likely
      that the new commercial structures resulting from them will be sufficiently
      workable and lasting to ensure that effective competition will be maintained.341
      Divestiture commitments are normally the best way to eliminate competition
      concerns resulting from horizontal overlaps.
2.    PROCEDURE
(388) In order to render the Transaction compatible with the internal market, the Parties
      submitted a set of commitments under Article 6(2) of the Merger Regulation on
      19 June 2019 (the "Initial Commitments"). The Commission market tested the
      Initial Commitments in order to assess whether they are sufficient and suitable to
      remedy the serious doubts identified in Section IV.3.1.2 of this Decision.
      Following the feedback received during the market test, the Initial Commitments
      were refined and improved. The Parties submitted amended commitments on 9
      July 2019 (the "Final Commitments"). The Final Commitments are annexed to
      this Decision and form an integral part thereof.
3.    INITIAL COMMITMENTS
(389) In order to dispel the serious doubts raised by the Commission in relation to TPM
      in several EEA Member States, the Parties submitted the “Initial Commitments
      consisting in the divestiture of Pfizer CH’s ThermaCare business globally,
      including all necessary assets and, in particular, a dedicated manufacturing
      facility located in the US (the “Divestment Business”).
(390) More specifically, the Divestment Business, as per the Initial Commitments,
      included in particular:
            The entire product range sold under the ThermaCare brand globally;
            Ongoing and identified past R&D projects and pipeline products relating to
             the ThermaCare brand globally;
            A dedicated manufacturing facility, located in Albany, Georgia, USA which
             manufactures 100% of the ThermaCare products sold globally, and all
             production equipment at the Albany site;
            All intellectual property rights relating to ThermaCare products and R&D
             or pipeline projects, including patents, domain names as well as
             ThermaCare trademark, design rights and copyrights;
            A non-exclusive, royalty-free license to the “Robax” trademark in Canada
             for a transitional period for the purpose of allowing the purchaser to
             continue co-branding Pfizer CH’s heat patches in Canada under the
             ThermaCare/Robax trademarks during a transitional period;
341   Remedies Notice, paragraph 10.
                                                 96
 ---pagebreak---            A non-exclusive, royalty-free license to the “Pfizer” trademark in the
            countries where the Divestment Business operates, for the limited purpose
            of allowing the purchaser to sell ThermaCare products under the “Pfizer”
            trademark until the purchaser fulfils all applicable regulatory requirements
            (including obtaining its own CE marking), for a transitional period;
           Data and know-how exclusively or predominantly used for the products of
            the Divestment Business;
           All licenses, permits, regulatory approvals, and authorizations specific to
            the operation of the Divestment Business;
           R&D equipment, raw materials and records primarily devoted to the
            Divestment Business, or required for its viability;
           Dedicated personnel, including all personnel employed at the Albany site,
            dedicated R&D, marketing, and supply planning personnel; and
           Transitional supply and service arrangements, including for packaging,
            transport, warehousing, logistics, sourcing and supply, distribution, IT
            services, quality systems and adverse event reporting, in order to maintain
            the economic viability and competitiveness of the Divestment Business, at
            the option of the purchaser.
(391) Under the Initial Commitments, the Parties also committed to provide their best
      efforts to transfer contract manufacturing and supply agreements relating to the
      Divestment Business. For some sourcing or supply agreements, the Parties also
      committed to use their best efforts to conclude back-to-back sourcing or supply
      agreements for a reasonable period of time.
(392) The Parties further committed to transfer the Divestment Business to a purchaser
      with experience in the marketing, promotion, and supply of consumer healthcare
      products, with an established presence or access to distribution channels in the
      EEA countries where the Divestment Business is active, as well as experience in
      working with authorities to obtain the relevant regulatory approvals.
4.    RESULTS OF THE MARKET TEST
(393) On 20 June 2019, the Commission launched a market test with the purpose of
      verifying whether the Initial Commitments were sufficient to clearly rule out the
      serious doubts identified by the Commission (see Section IV.3.1.2 of this
      Decision). In particular, the market test aimed at verifying whether the Initial
      Commitments were overall suitable to address the competitive concerns identified
      and likely to enable the Divestment Business to continue acting as a competitive
      force on the TPM segment. The market test also aimed to seek feedback about the
      relevant criteria to identify a suitable purchaser for the Divestment Business.
(394) Overall, the feedback received from respondents to the market test was positive.
      The overwhelming majority of respondents considered that the commitments
                                                 97
 ---pagebreak---       were overall suitable to remove the concerns identified in the TPM area.342
      Respondents considered, generally, that the Divestment Business includes the
      necessary combination of assets,343 and is likely to constitute an attractive
      investment opportunity for a range of purchasers.344
(395) However, the results of the market test also identified issues with the Initial
      Commitments requiring further improvements.
(396) Firstly, respondents required clarifications regarding the assets, rights, and
      information transferred to the Divestment Business, so as to ensure that it
      includes all relevant third party licenses and historical data on sales, pricing, as
      well as clinical data.345
(397) Secondly, a number of respondents indicated that the duration of the transitory
      supply agreements, as initially foreseen, was not sufficient. While the exact
      duration considered suitable for such agreements ([Time period]) was not
      disclosed to respondents as part of the market test, a majority of competitors
      indicated that such supply agreements should last for a period of two-three years
      or more.346
(398) Thirdly, the market test indicated that criteria to assess the suitability of the
      purchaser should be adjusted to require specifically: (i) experience in the sale and
      marketing of pharmaceuticals,347 in particular OTC pharmaceutical products348
      (but not necessarily medical devices);349 (ii) the ability to innovate in the field of
      healthcare products;350 and (iii) existing third-party distribution arrangements in
      place in countries where the purchaser does not have its own salesforce.351
(399) Fourthly and lastly, a number of competitors raised concerns about the
      preservation of the viability and competitiveness of the Divestment Business in
      the divestiture scenario contemplated under the Initial Commitments.
      Respondents in particular feared that the ThermaCare brand equity would be
342   Replies to R1 - Questionnaire to TPM competitors, question 2. Replies to R2 - Questionnaire to
      TPM purchasers, question 2.
343   Replies to R1 - Questionnaire to TPM competitors, question 3. Replies to R2 - Questionnaire to
      TPM purchasers, question 3.
344   Replies to R1 - Questionnaire to TPM competitors, question 11. Replies to R2 - Questionnaire to
      TPM purchasers, question 8.
345   Replies to R1 - Questionnaire to TPM competitors, question 3.1.
346   Replies to R1 - Questionnaire to TPM competitors, question 9.2.
347   Replies to R1 - Questionnaire to TPM competitors, question 14. Replies to R2 - Questionnaire to
      TPM purchasers, question 11.
348   Replies to R1 - Questionnaire to TPM competitors, question 15. Replies to R2 - Questionnaire to
      TPM purchasers, question 12.
349   Replies to R1 - Questionnaire to TPM competitors, question 16. Replies to R2 - Questionnaire to
      TPM purchasers, question 13.
350   Replies to R1 - Questionnaire to TPM competitors, question 7.1.
351   Replies to R1 - Questionnaire to TPM competitors, question 13. Replies to R2 - Questionnaire to
      TPM purchasers, question 10.
                                                   98
 ---pagebreak---       negatively impacted over the divestiture period, including due to the risk of
      distorted incentives on the part of a combined GSK/Pfizer CH salesforce, that
      would likely focus on the sales of Volta-branded products rather than pushing for
      additional ThermaCare sales.352
5.    FINAL COMMITMENTS
(400) The Commission communicated to the Parties a summary of the comments made
      by respondents to the market test, as well as its preliminary assessment of these
      comments.
(401) In order to address the results of the market test, the Parties submitted the Final
      Commitments on 9 July 2019. The Final Commitments differ from the Initial
      Commitments on the following main aspects:
            The scope of the rights and assets transferred as part of the Divestment
             Business has been clarified so as to include: (i) IP rights used under third-
             party licenses; and (ii) historic and current financial/accounting, pricing,
             sales, and clinical data.
            The purchaser criteria have been amended to ensure that the purchaser: (i)
             has experience in the supply of OTC products (but not necessarily medical
             devices); (ii) has existing third-party access to distribution channels in case
             it does not have its own presence in each relevant EEA market; and (iii) has
             the ability to innovate.
            Transitional supply agreements have been extended from a period not
             exceeding [Time period] with a possibility to extend them for [Time period]
             (that is [Time period] maximum), to a period not exceeding [Time period]
             with a possibility to extend such agreement for [Time period] of a
             maximum duration of [Time period] (first period), [Time period] (second
             period) and [Time period] (third period) respectively, potentially bringing
             the total duration of such agreements to [Time period].
            The first divestiture period has been reduced. The timing of other
             procedural steps, in particular in relation to the nomination of the
             monitoring trustee, has also been revised accordingly.
            The Parties additionally offer that the Purchaser will have the opportunity,
             on request, to interview and employ up to [50-60]% of Pfizer CH personnel
             involved in the sale of ThermaCare in [Geography].
            The Parties additionally commit not to integrate the Pfizer CH operations
             (including all employees) with any operations of GSK (including all
             employees) in [Geography]), until the closing of the acquisition of the
             Divestment Business by a suitable purchaser.
352   Replies to R1 - Questionnaire to TPM competitors, questions 2.1, 5.1, and 6.
                                                   99
 ---pagebreak---             The Parties additionally commit to put in place specific incentive schemes
             to promote sales of ThermaCare products in [Geography], until the closing
             of the acquisition of the Divestment Business by a suitable purchaser.
6.    ASSESSMENT OF THE FINAL COMMITMENTS
(402) The Commission notes that the Final Commitments remove nearly the entire
      overlap between the Parties in the area of TPM products in the EEA. Only minor
      overlaps would remain post-Transaction in the Netherlands and France, where
      Pfizer sells its AdvilMed, Advil Gel and/or Kamol products. However, these
      limited overlaps do not raise serious doubts as to the compatibility of the
      Transaction with the internal market.353
(403) In addition, the Commission considers that the Divestment Business is a viable
      and competitive business. In particular, from a financial perspective, the
      Divestment Business has consistently been operating profitably over the past
      three years.354
(404) The Commission also considers that the Divestment Business, as per the Final
      Commitments, includes all the necessary assets, functions and personnel
      necessary for the manufacturing and supply of ThermaCare products by a
      suitable purchaser.
(405) The Divestment Business will also largely be independent from the Parties post-
      Transaction, as the transitional supply arrangements, which do not exceed a
      maximum period of [Time period], aim at supporting the Divestment Business in
      limited areas only, and ensure that no disruption in the supply of TPM products
      occurs in the EEA.
(406) In addition, the Purchaser criteria included in the Final Commitments ensure that
      the purchaser has sufficient experience in the supply of OTC pharmaceutical
      products, as well as immediate access to a salesforce in the relevant EEA
      countries. These criteria ensure the purchaser’s ability to readily and successfully
      continue to market ThermaCare products, and to compete effectively, in
      particular against the Combined CH Business.
(407) Finally, the viability of the Divestment Business, and in particular the
      ThermaCare brand equity, is preserved under the Final Commitments. Pfizer CH
      salesforce in [Geography] will not offer GSK products during the (shortened)
      divestiture period. This ensures that ThermaCare sales cannot be cannibalized by
      competing GSK products. In fact, the Final Commitments provide for financial
      incentives for Pfizer CH employees to increase the sales of ThermaCare, which is
      likely to make sales of these products more attractive to employees,
353   In both France and the Netherlands, Pfizer CH’s increment will remain small. In France, Pfizer
      CH’s AdvilMed gel, Advil Gel and Kamol account for a combined value share of [0-5]% in the
      topical pain management category (02E1) and [0-5]% in the OTC 4 class 02E10
      (ointments/creams). In the Netherlands, Advil Gel accounts for a share of [0-5]% in the topical
      pain management category (02E1) and [0-5]% in the OTC 4 class 02E1O (ointments/creams).
354   See M.9274 - Form RM Annex 7 - Turnover breakdown by country and P&L -
      CONFIDENTIAL.xlsx and M.9274 - Form RM Annex 8 - Albany PL (2016-2019 YTD) -
      CONFIDENTIAL.xlsx.
                                                  100
 ---pagebreak---       comparatively to the sales of other Pfizer CH OTC products. In addition, the
      possibility for the purchaser to interview and employ Pfizer CH sales personnel
      imply that these employees may also have a longer term interest in the promotion
      of ThermaCare products. This combined set of features protects the value of the
      ThermaCare brand and its competitive presence on the market over the course of
      the (shortened) divestiture period, and beyond.
(408) In view of the elements discussed in this Section, the Commission concludes that
      the Final Commitments are suitable to remove the competition concerns
      identified in Section IV.3.1.2 with regards to the supply of TPM products in the
      EEA.
VI.   CONDITIONS AND OBLIGATIONS
(409) Under the first sentence of the second subparagraph of Article 6(2) of the Merger
      Regulation, the Commission may attach to its decision conditions and obligations
      intended to ensure that the undertakings concerned comply with the commitments
      they have entered vis-à-vis the Commission with a view to rendering the
      concentration compatible with the internal market
(410) The fulfilment of a measure that gives rise to the structural change of the market
      is a condition, whereas the implementing steps that are necessary to achieve this
      result are generally obligations on the parties. Where a condition is not fulfilled,
      the Commission's decision declaring the concentration compatible with the
      internal market will not be, or no longer be, applicable. Where the undertakings
      concerned commit a breach of an obligation, the Commission may revoke the
      clearance decision in accordance with Article 6(3) of the Merger Regulation. The
      undertakings concerned may also be subject to fines and periodic penalty
      payments under Articles 14(2) and 15(1) of the Merger Regulation.
(411) In accordance with the basic distinction between conditions and obligations,
      Sections B, C, and D of the Final Commitments, together with the Schedule and
      Annexes to the Schedule, as annexed to this Decision, constitute conditions
      attached to this Decision, as only through their full compliance can the structural
      changes in the relevant markets be achieved. The other commitments (set out in
      Sections E and F of the Final Commitments) constitute obligations, as they
      concern the implementing steps that are necessary to achieve the modifications
      sought in a manner compatible with the internal market.
(412) The full text of the Final Commitments, together with the Schedule and Annexes
      to the Schedule, is attached as the Annex to this Decision and forms an integral
      part of this Decision.
VII.  NON-CONTROLLING MINORITY SHAREHOLDING
(413) As consideration for the transfer of Pfizer CH to GSK, Pfizer will obtain a share
      of 32% in the Combined CH Business. Pfizer will acquire this minority share in
      the Combined CH Business because the Transaction is partly structured as an
      exchange deal. The Commission routinely reviews exchange offers resulting in a
      corollary acquisition of minority interests. In these cases, the Commission’s
      review also entails carrying out an assessment of the competitive interactions
                                              101
 ---pagebreak---       between the undertaking in which the minority interest is obtained (in the present
      case, the Combined CH Business), and the retained activities of the holder of that
      interest (in the present case, Pfizer).355
(414) Hence, within the framework of the merger control assessment of the
      Transaction, the Commission has considered whether the structural link created
      by the acquisition of that minority interest could weaken GSK and Pfizer's
      incentives to compete in the markets where the activities of the Combined CH
      Business (where both GSK and Pfizer will have an interest, post-Transaction)
      overlap with those of Pfizer’s retained business.
(415) The overlaps between the activities of the Combined CH Business and of Pfizer’s
      retained business would give rise to the following affected markets:356
      a)     Topical pain management – M2A (ATC 3) / 02E1 (OTC 3) in Belgium,
             Denmark, Finland, Greece, Italy, Luxembourg, and Portugal, where Pfizer
             will retain Feldene (a piroxicam-based medicated gel). This product has
             very low market shares (between [0-5]% and [0-5]% in Belgium, Italy,
             Luxembourg, Portugal and Greece, and between [0-5]% and [0-5]% in
             Denmark and Finland). According to the Notifying Party, the rationale for
             Pfizer to keep the product is that the underlying brand is predominantly sold
             Rx.357
      b)     Systemic pain management – N2B+N2C+M1A+G2X1+M5X+A3D (ATC
             3) / 02A1+02A2+02C1+02E2+02B1+02G2+02H1 (OTC 3) in Sweden,
             where Pfizer will retain Artrox, which has a market share of less than [0-
             5]%. According to the Notifying Party, the rationale for Pfizer to keep the
             product is that it is marketed by an entity outside of the scope of Pfizer CH
             and also sold Rx.
      c)     Antifungals – D1A (ATC 3) / 06G3 (OTC 3) in Finland and Norway, where
             Pfizer will mainly retain Diflucan and Trosyd which has a market share of
             about [10-20]% in Finland and [10-20]% in Norway, and would overlap
             with the Combined CH Business’ Lamisil and Trosyd. Similarly to (b), the
355   See, e.g., Commission decision of 28 January 2015 in case M.7276 – GlaxoSmithKline/ Novartis
      Vaccines Business (Excl. Influenza) / Novartis Consumer Health Business, paragraph 9.
356   On the basis of market shares computed in value. The activities of the Combined CH Business and
      of Pfizer will also overlap in relation to few additional markets, but no affected market would
      arise under any plausible market definition. In all those instances, the combined market shares of
      the Combined CH Business and Pfizer on the relevant markets will remain well below [10-20]%,
      with Pfizer having market shares well below [5-10]% (with one exception, where the combined
      market share would amount to [10-20]%, with an increment of [0-5]%).
357   For example, Feldene is sold Rx in Ireland and the United Kingdom. In these two Member States,
      an hypothetical affected markets could arise, as Group 3 in Ireland, and as Group 1 in the United
      Kingdom, based on an overall OTC + Rx topical analgesics (M2A). In Ireland, while the
      combined shares of the Combined CH Business and Pfizer would amount to [30-40]%, Pfizer’s
      increment (with Feldene) would be de minimis ([0-5]%). Further GSK and Pfizer will continue to
      face competition from a broad range of competitors, including Phoenix Labs ([20-30]%) with
      Etoflam and Rohto Corp ([10-20]%) with Deep Heat and Deep Freeze. In the UK, GSK and
      Pfizer would have a combined share of [30-40]%, with an increment from Feldene of [5-10]%.
      GSK and Pfizer will however continue to face competition from a broad range of competitors,
      including Teva ([10-20]%) with Zacin and Axsain, and Concordia ([10-20]%) with Fenbid.
                                                     102
 ---pagebreak---              Notifying Party submits that the rationale for Pfizer to keep the product is
             that it is marketed by an entity outside the scope of Pfizer CH. Moreover,
             the Notifying Party claims that Lamisil and Trosyd are in any event based
             on a different active ingredient (terbinafine and tioconazole respectively).
      d)     Laxatives – A6A (ATC 3) / 03C6+03C5+03C1+03C2+03C9+03C4 (OTC
             3) in Finland (based on volume of sales only), where Pfizer will retain Vi-
             Siblin, while the Combined CH will offer Pursennid Ex-Lax, which has a
             market share of less than [0-5]%.
(416) In relation to (a) and (b), the Commission notes that Pfizer’s retained products
      have low market shares and that the market investigation did not reveal that any
      of those products plays a significant role in the relevant markets. Therefore, the
      Commission considers it unlikely that the acquisition of a minority stake by
      Pfizer in the Combined CH Business will weaken its incentives to compete in the
      relevant markets and that this could have any material detrimental effects on the
      markets concerned.
(417) In relation to (c), the Notifying Party claimed that the Combined CH Business
      and Pfizer’s respective products are based on different active ingredients: Trosyd is
      an antifungal product relying on tioconazole as an active ingredient, whereas Lamisil
      uses terbinafine hydrochloride. According to the Notifying Party, terbinafine/Lamisil
      is much more effective and requires a one day or week treatment, whereas
      tioconazole/Trosyd requires treatment of 2-3 weeks. The Notifying Party also added
      that, even though they are both topical products, Trosyd OTC is only available as a
      cream, whereas Lamisil is also sold in liquid, dusting powder and spray forms. The
      Combined CH Business will have market shares of about [30-40]% in Finland
      and [20-30]% in Norway at ATC 3 level, which mostly result from the Combined
      CH Business’s sales of products marketed under the brand Lamisil. Pfizer’s
      Trosyd has a market share of less than [0-5]%. The Commission notes that other
      strong competitors will remain on the markets concerned post-Transaction. As
      regards Finland: Johnson & Johnson (with a market share of [10-20]%), Orion
      ([10-20]%), and Bayer ([5-10]%). As regards Norway: Bayer (with a market
      share of [40-50]%) and Orifarm ([5-10]%). In both EEA Member States, there are
      competitors who would enjoy similar or larger market shares compared to those
      of Pfizer (notably, Johnson & Johnson and Orion in Finland, and Bayer in
      Norway), that would keep exerting competitive pressure on Pfizer itself, as well
      as on the Combined CH Business. In addition, there is no indication that Diflucan
      and Lamisil are close competitors as they are based on different active
      ingredients, have different galenic form, and are used for different indications.
      The market investigation did not produce evidence contradicting this
      reasoning.358 Therefore, on the basis of the elements at its disposal, the
      Commission considers it unlikely that the acquisition of a minority stake by
      Pfizer in the Combined CH Business will weaken its incentives to compete in the
      relevant markets for antifungals and that this could have any material detrimental
      effects on the markets concerned.
358   Replies to Q1 – Questionnaire to pharmacies and retailers, question 55; Replies to Q2 –
      Questionnaire to wholesalers and buying groups, question 37 and Replies to Q3 – Questionnaire to
      competitors, question 72.
                                                   103
 ---pagebreak--- (418) In relation to (d), according to the Notifying Party, the limited overlap with
      Pursennid Ex-Lax will not affect Pfizer’s incentives to compete post-Transaction
      for the two following reasons. First, as Pursennid Ex-Lax has limited sales in
      Finland (namely, €[Limited sales] according to IQVIA OTC-IMS and £[Limited
      sales] of wholesale sales from GSK to direct customers), competing less
      aggressively would not be profitable for Pfizer. Second, Pursennid Ex-Lax and
      Vi-Siblin are not close competitors. Vi-Siblin is a fibre laxative, with active
      ingredient plantago ovata, and sold in powders/granules, while Pursennid Ex-Lax
      is a contact laxative, with active ingredient sennosides A&B, and sold in coated
      tablets.359 The Commission observes that Combined CH Business has indeed a
      limited share (of less than [0-5]%) on the market. The Commission also notes that
      strong competitors will remain on the market post-Transaction including Mylan
      (with a market share of [20-30]%), Takeda ([10-20]%) and Orion ([10-20]%), and
      will continue to exert competitive pressure on Pfizer and the Combined CH
      Business. Furthermore, the market investigation did not produce evidence
      contradicting this reasoning. Therefore, on the basis of the elements at its
      disposal, the Commission considers it unlikely that the acquisition of a minority
      stake by Pfizer in the Combined CH Business will weaken its incentives to
      compete in the relevant markets for laxatives and that this could have any
      material detrimental effects on the markets concerned.
(419) Finally, the Commission notes that the activities of Pfizer and of the Combined
      CH Business would not overlap in the EEA as regards Pfizer’s retained switch
      products, that is to say, products that are likely to switch from Rx to OTC status
      in the EEA in the near future.
(420) In view of the above and the available evidence, the Commission concludes that
      the Transaction does not lead to serious doubts as to its compatibility with the
      internal market in relation to the acquisition by Pfizer of a non-controlling
      minority shareholding in the Combined CH Business.
359   In addition, fibre laxatives work by absorbing liquid in the intestines and swelling to form a soft,
      bulky stool. The stool then stimulates the bowel in order to overcome constipation symptoms. By
      contrast, contact laxatives stimulate the intestinal membranes and the peristalsis process, causing a
      bowel movement.
                                                        104
 ---pagebreak--- VIII. CONCLUSION
(421) For the above reasons, the Commission has decided not to oppose the notified
      operation as modified by the Final Commitments and to declare it compatible with
      the internal market and with the functioning of the EEA Agreement, subject to full
      compliance with the conditions set out in Sections B, C and D of the Final
      Commitments, together with the Schedule and Annexes to the Schedule, as annexed
      to the present decision and with the obligations contained in the other sections of said
      Final Commitments. This decision is adopted in application of Article 6(1)(b) in
      conjunction with Article 6(2) of the Merger Regulation and Article 57 of the EEA
      Agreement.
                                                      For the Commission
                                                      (Signed)
                                                      Margrethe VESTAGER
                                                      Member of the Commission
                                                105
 ---pagebreak--- Case COMP/M.9274 – GlaxoSmithKline / Pfizer Consumer Health Business
COMMITMENTS TO THE EUROPEAN COMMISSION RELATING TO
         THERMACARE TOPICAL PAIN MANAGEMENT BUSINESS
Pursuant to Article 6(2) of Council Regulation (EC) No 139/2004 (the “Merger Regulation”),
GlaxoSmithKline plc (“GSK”) (the “Notifying Party”) and Pfizer Inc. (“Pfizer”) hereby enter into
the following Commitments (the “Commitments”) vis-à-vis the European Commission (the
“Commission”) with a view to rendering the proposed combination by GSK and Pfizer of GSK’s
consumer healthcare business (“GSK CH”) and Pfizer’s consumer healthcare business (“Pfizer
CH”) into a new venture under the sole control of GSK (the “Combined CH Business”) (the
“Concentration”), compatible with the internal market and the functioning of the EEA Agreement.
This text shall be interpreted in light of the Commission’s decision pursuant to Article 6(1)(b) of the
Merger Regulation to declare the Concentration compatible with the internal market and the
functioning of the EEA Agreement (the “Decision”), in the general framework of European Union
law, in particular in light of the Merger Regulation, and by reference to the Commission Notice on
remedies acceptable under Council Regulation (EC) No 139/2004 and under Commission Regulation
(EC) No 802/2004 (the “Remedies Notice”).
Section A.          Definitions
1. For the purpose of the Commitments, the following terms shall have the following meaning:
     Affiliated Undertakings: undertakings controlled by GSK or Pfizer, as the case may be, whereby
     the notion of control shall be interpreted pursuant to Article 3 of the Merger Regulation and in
     light of the Commission Consolidated Jurisdictional Notice under Council Regulation (EC) No
     139/2004 on the control of concentrations between undertakings (the "Consolidated Jurisdictional
     Notice").
     Assets: the assets that contribute to the current operation or are necessary to ensure the viability
     and competitiveness of the Divestment Business as indicated in Section B, and described more in
     detail in the Schedule.
     Cluj Romania Site: Pfizer’s production and packaging facility located at Calea Turzii 178C, Cluj-
     Napoca 400495, Romania.
     Closing: the transfer of the legal title to the Divestment Business to the Purchaser.
     Closing Period: the period of [Time period] from the approval of the Purchaser and the terms of
     sale by the Commission.
Commission européenne, DG COMP MERGER REGISTRY, 1049 Bruxelles, BELGIQUE
Europese Commissie, DG COMP MERGER REGISTRY, 1049 Brussel, BELGIË
Tel: +32 229-91111. Fax: +32 229-64301. E-mail: COMP-MERGER-REGISTRY@ec.europa.eu.
 ---pagebreak--- Confidential Information: any business secrets, know-how, commercial information, or any
other information of a proprietary nature that is not in the public domain.
Conflict of Interest: any conflict of interest that impairs the Trustee's objectivity and
independence in discharging its duties under the Commitments.
Divestment Business: the topical pain management business carried on by Pfizer CH under the
ThermaCare brand globally, as further defined in Section B and in the Schedule, which the Parties
commit to divest.
Divestiture Trustee: one or more natural or legal person(s) who is/are approved by the
Commission and appointed by GSK and who has/have received from GSK the exclusive Trustee
Mandate to sell the Divestment Business to a Purchaser at no minimum price.
Effective Date: the date of adoption of the Decision.
First Divestiture Period: the period of [Time period] from the Effective Date.
GSK: GlaxoSmithKline plc, incorporated under the laws of England and Wales, with its registered
office at 980 Great West Road, Brentford, TW8 9GS, United Kingdom.
Hold Separate Manager: the person appointed by the Parties for the Divestment Business to
manage the day-to-day business under the supervision of the Monitoring Trustee.
Key Personnel: all personnel necessary to maintain the viability and competitiveness of the
Divestment Business, as listed in the Schedule to these Commitments, including the Hold Separate
Manager.
Medical Device Design Center: The [Size] space dedicated to medical device R&D capabilities
at Pfizer CH’s R&D hub in Richmond, Virginia, United States.
Monitoring Trustee: one or more natural or legal person(s) who is/are approved by the
Commission and appointed by GSK, and who has/have the duty to monitor the Parties’
compliance with the conditions and obligations attached to the Decision.
Parties: GSK and Pfizer.
Personnel: all staff currently working for the Divestment Business who devote [50-60]% or more
of their work to ThermaCare.
Pfizer: Pfizer Inc., incorporated under the laws of Delaware, with its registered office at 235 East
42nd Street, New York, NY 10017, United States.
Purchaser: the entity approved by the Commission as acquirer of the Divestment Business in
accordance with the criteria set out in Section D.
Purchaser Criteria: the criteria laid down in paragraph 17 of these Commitments that the
Purchaser must fulfil in order to be approved by the Commission.
                                                    2
 ---pagebreak---     Schedule: the schedule to these Commitments describing more in detail the Divestment Business.
    Trustee(s): the Monitoring Trustee and/or the Divestiture Trustee as the case may be.
    Trustee Divestiture Period: the period of [Time period] from the end of the First Divestiture
    Period.
Section B.       The commitment to divest and the Divestment Business
       Commitment to divest
2. In order to maintain effective competition, the Parties commit to divest, or procure the divestiture
    of the Divestment Business by the end of the Trustee Divestiture Period as a going concern to a
    purchaser and on terms of sale approved by the Commission in accordance with the procedure
    described in paragraph 18 of these Commitments. To carry out the divestiture, GSK commits to
    find a purchaser and to enter into a final binding sale and purchase agreement for the sale of the
    Divestment Business within the First Divestiture Period. If GSK has not entered into such an
    agreement at the end of the First Divestiture Period, GSK shall grant the Divestiture Trustee an
    exclusive mandate to sell the Divestment Business in accordance with the procedure described in
    paragraph 30 in the Trustee Divestiture Period.
3. The Parties shall be deemed to have complied with this commitment if:
       (a)      by the end of the Trustee Divestiture Period, GSK or the Divestiture Trustee has
                entered into a final binding sale and purchase agreement and the Commission
                approves the proposed purchaser and the terms of sale as being consistent with the
                Commitments in accordance with the procedure described in paragraph 18; and
       (b)      the Closing of the sale of the Divestment Business to the Purchaser takes place within
                the Closing Period.
4. In order to maintain the structural effect of the Commitments, GSK shall, for a period of 10 years
    after Closing, not acquire, whether directly or indirectly, the possibility of exercising influence (as
    defined in paragraph 43 of the Remedies Notice, footnote 3) over the whole or part of the
    Divestment Business, unless, following the submission of a reasoned request from GSK showing
    good cause and accompanied by a report from the Monitoring Trustee (as provided in paragraph
    44 of these Commitments), the Commission finds that the structure of the market has changed to
    such an extent that the absence of influence over the Divestment Business is no longer necessary
    to render the proposed concentration compatible with the internal market.
       Structure and definition of the Divestment Business
5. The Divestment Business consists of the topical pain management business carried on by Pfizer
    CH under the ThermaCare brand globally. The legal and functional structure of the Divestment
    Business as operated to date is described in the Schedule. The Divestment Business, described in
                                                       3
 ---pagebreak---    more detail in the Schedule, includes all assets and staff that contribute to the current operation or
   are necessary to ensure the viability and competitiveness of the Divestment Business, in particular:
      (a)       all tangible and intangible assets relating to the ThermaCare business, including
                intellectual property and know-how, a dedicated production site located in Albany,
                Georgia, US, as well as R&D assets;
      (b)       all licences, permits and authorisations issued by any governmental organisation for
                the benefit of the Divestment Business;
      (c)       all contracts, leases, commitments and customer orders of the Divestment Business;
                all customer, credit and other records of the Divestment Business; and
      (d)       the Personnel.
6. In addition, at the option of Purchaser, the Divestment Business includes the benefit, for a
   transitional period of [Time period] after Closing of certain transitional service agreements (with
   the possibility to extend for further periods set out in the Schedule, at the Purchaser’s request and
   subject to the opinion of the Monitoring Trustee) including, but not limited to, sourcing, transport,
   logistics, secondary packaging, and distribution, as detailed in the Schedule. Strict firewall
   procedures will be adopted so as to ensure that any competitively sensitive information related to,
   or arising from such transitional arrangements (for example, product roadmaps) will not be shared
   with, or passed on to, anyone outside the respective party providing the transitional products
   and/or services.
7. For the avoidance of doubt, the Divestment Business shall not include:
       (a)       the space occupied by Medical Device Design Center in Richmond, Virginia, US,
                 and all equipment, raw materials and records housed in that space, the use of which
                 are less than [50-60]% devoted to the Divestment Business;
       (b)       the Cluj, Romania Site;
       (c)       the Robax brand or trademark (save for a transitional non-exclusive trademark licence
                 as detailed in the Schedule);
       (d)       the “GSK” or “Pfizer” company name, marks, or logos in any form (with the
                 exception of the transitional non-exclusive license to the Pfizer trademark as referred
                 to in paragraph 21(r) of the Schedule);
       (e)       intellectual property rights which do not contribute to the operation of the
                 Divestment Business;
       (f)      shared functions and personnel, as outlined in the Schedule, provided however, that
                (i) in respect of the [Number] personnel from the Combined CH Business’ functional
                 group “[Personnel Group]” and (ii) in respect of other personnel who are
                 involved on the Effective Date in the sale of ThermaCare in the countries
                [Geography], the Parties commit to offer the Purchaser the opportunity on request for
                                                       4
 ---pagebreak---                  [Time period], to interview and hire such personnel, provided that the Parties shall act
                 in good faith in evaluating any potential role changes or redundancies for such
                 personnel, and shall not carry out any such role changes or redundancies for the
                 purpose of frustrating this commitment, without prejudice to the application of the
                 other provisions of these Commitments including paragraph 10 below, provided
                 further that the Purchaser may hire at most [50-60]% of the personnel within category
                 (ii) above;
         (g)      books and records required to be retained pursuant to any statute, rule, regulation or
                  ordinance, provided that the Parties will provide copies of such documents necessary
                  for the Divestment Business to the Purchaser, upon request; and
         (h)      general books of account and books of original entry that comprise the Parties’ or any
                  of their Affiliated Undertakings’ permanent accounting or tax records, provided that
                  the Parties will provide copies of such documents necessary for the Divestment
                  Business to the Purchaser, upon request.
 Section C.        Related commitments
       Preservation of viability, marketability and competitiveness
8. From the Effective Date until Closing, the Parties shall preserve or procure the preservation of the
    economic viability, marketability and competitiveness of the Divestment Business, in accordance
    with good business practice, and shall minimise as far as possible any risk of loss of competitive
    potential of the Divestment Business. In particular the Parties undertake:
       (a)       not to carry out any action that might have a significant adverse impact on the value,
                 management or competitiveness of the Divestment Business or that might alter the
                 nature and scope of activity, or the industrial or commercial strategy or the investment
                 policy of the Divestment Business;
       (b)       to make available, or procure to make available, sufficient resources for the
                 development of the Divestment Business, on the basis and continuation of the existing
                 business plans. To that end, the Parties commit to take all reasonable steps, or procure
                 that all reasonable steps are being taken, to ensure that the Divestment Business
                 continues to receive all the necessary support from the Parties it needs to allow it to
                 meet the existing business plans. In particular, the Parties will ensure that, in addition
                 to assets, personnel and other resources being held separate, the Divestment Business
                 will have access to shared assets, personnel and resources on a transitional basis in
                 line with past practice, that is on the same level as before the Hold Separate period,
                 and as needed to maintain the viability and competitiveness of the Divestment
                 Business; and
       (c)       to take all reasonable steps, or procure that all reasonable steps are being taken,
                 including appropriate incentive schemes (based on industry practice), to encourage all
                 Key Personnel to remain with the Divestment Business, and not to solicit or move any
                 Personnel to the Parties’ remaining business. Where, nevertheless, individual
                 members of the Key Personnel exceptionally leave the Divestment Business, GSK
                 shall provide a reasoned proposal to replace the person or persons concerned to the
                                                        5
 ---pagebreak---                  Commission and the Monitoring Trustee. GSK must be able to demonstrate to the
                 Commission that the replacement is well suited to carry out the functions exercised by
                 those individual members of the Key Personnel. The replacement shall take place
                 under the supervision of the Monitoring Trustee, who shall report to the Commission.
       Hold-separate obligations
9. Subject to paragraph 10 below, the Parties commit, from the Effective Date until Closing, to keep
    the Divestment Business separate from the businesses retained by the Parties and to ensure that
    unless explicitly permitted under these Commitments (including as necessary to provide
    transitional services to the Divestment Business covering shared functions during the hold
    separate period): (i) management and staff of the business(es) retained by the Parties have no
    involvement in the Divestment Business; (ii) the Key Personnel and Personnel of the Divestment
    Business have no involvement in any business retained by the Parties and do not report to any
    individual outside the Divestment Business.
10. Until Closing, the Parties commit not to integrate the Pfizer CH operations (including all
    employees) with any operations of GSK (including all employees) in [Geography] (provided for
    the avoidance of doubt, this shall not preclude such Pfizer CH employees carrying out regional or
    global functions). The Parties further commit to create specific incentive schemes, in accordance
    with the principles set out in Annex 10, for all sales personnel with activities relating to the
    Divestment Business in [Geography] such that these personnel have greater incentives (in terms of
    remuneration) in respect of their activities relating to the Divestment Business than under existing
    incentive schemes. The Parties further commit not to reduce the total amount of employee time
    currently dedicated solely to the Divestment Business, without prejudice to paragraph 11 below.
11. Until Closing, the Parties shall assist the Hold Separate Manager and the Monitoring Trustee in
    ensuring that the Divestment Business is managed as a distinct and saleable entity separate from
    the business(es) which the Parties are retaining. Immediately after the adoption of the Decision,
    the Parties shall appoint a Hold Separate Manager. The Hold Separate Manager, who shall be part
    of the Key Personnel, shall manage the Divestment Business independently and in the best interest
    of the business with a view to ensuring its continued economic viability, marketability and
    competitiveness and its independence from the businesses retained by the Parties. In addition, the
    Parties commit that the Hold Separate Manager will have the appropriate position and authority to
    direct the use of the shared resources and assets made available to the Divestment Business
    pursuant to paragraph 8(b), and instruct personnel that are shared with the Parties in line with past
    practice and as needed to maintain the viability and competitiveness of the Divestment Business.
    The Hold Separate Manager may request additional resources reasonably necessary to meet the
    existing business plans. The Parties shall make available such additional resources. To the extent
    the Parties disagree with the need for these additional resources, the Monitoring Trustee shall
    assess and have the final authority to determine whether the additional resources requested are
    reasonably necessary. To ensure the continuing viability and competitiveness of the Divestment
    Business, the incentive scheme for the Hold Separate Manager will be dependent upon the
    performance of the Divestment Business throughout the Hold Separate period. The Hold Separate
    Manager shall closely cooperate with and report to the Monitoring Trustee and, if applicable, the
    Divestiture Trustee. Any replacement of the Hold Separate Manager shall be subject to the
    procedure laid down in paragraph 8(c) of these Commitments. The Commission may, after having
    heard GSK, require GSK to replace the Hold Separate Manager.
                                                         6
 ---pagebreak---        Ring-fencing
12. The Parties shall implement, or procure to implement, all necessary measures to ensure that they
    do not, after the Effective Date, obtain any Confidential Information relating to the Divestment
    Business, except as is necessary to ensure the viability of the Divestment Business (including as is
    necessary to provide transitional services to the Divestment Business). In particular, the
    participation of the Divestment Business in any central information technology network shall be
    severed to the extent possible, without compromising the viability of the Divestment Business.
    The Parties may obtain or keep information relating to the Divestment Business which is
    reasonably necessary for the divestiture of the Divestment Business or the disclosure of which to
    the Parties are required by law.
       Non-solicitation clause
13. The Parties undertake, subject to customary limitations, not to solicit, and to procure that
    Affiliated Undertakings do not solicit, the Key Personnel transferred with the Divestment Business
    for a period of [Time period] after Closing.
       Due diligence
14. In order to enable potential purchasers to carry out a reasonable due diligence of the Divestment
    Business, GSK shall, subject to customary confidentiality assurances and dependent on the stage
    of the divestiture process:
       (a)       provide to potential purchasers sufficient information as regards the Divestment
                 Business; and
       (b)       provide to potential purchasers sufficient information relating to the Personnel and
                 allow them reasonable access to the Personnel.
       Reporting
15. GSK shall submit written reports in English on potential purchasers of the Divestment Business
    and developments in the negotiations with such potential purchasers to the Commission and the
    Monitoring Trustee no later than 10 days after the end of every month following the Effective
    Date (or otherwise at the Commission’s request). GSK shall submit a list of all potential
    purchasers having expressed interest in acquiring the Divestment Business to the Commission at
    each and every stage of the divestiture process, as well as a copy of all the offers made by
    potential purchasers within five days of their receipt.
16. GSK shall inform the Commission and the Monitoring Trustee on the preparation of the data room
    documentation and the due diligence procedure and shall submit a copy of any information
    memorandum to the Commission and the Monitoring Trustee before sending the memorandum out
    to potential purchasers.
                                                        7
 ---pagebreak--- Section D.        The Purchaser
17. In order to be approved by the Commission, the Purchaser must fulfil the following criteria:
       (a)    The Purchaser shall be independent of and unconnected to GSK and Pfizer and their
              Affiliated Undertakings (this being assessed having regard to the situation following the
              divestiture);
       (b)    The Purchaser shall have experience in the marketing, promotion and supply of a
              portfolio of consumer healthcare products in the EEA (including but not necessarily
              limited to OTC pharmaceutical products); and
       (c)    The Purchaser shall have an established presence in and/or existing third-party access to
              the distribution channels typically used in the distribution of consumer healthcare
              products (including in particular pharmacies and where relevant mass retail) in each of
              the EEA markets in which the Divestment Business is active;
       (d)    The Purchaser shall have experience in working with authorities and competent bodies in
              the EEA in obtaining necessary regulatory approvals and authorisations for
              commercialisation;
       (e)    The Purchaser shall have the financial resources, proven expertise and incentive to
              maintain and develop the Divestment Business as a viable and active competitive force in
              competition with the Parties and other competitors, including the ability to innovate; and
       (f)    The acquisition of the Divestment Business by the Purchaser must neither be likely to
              create, in light of the information available to the Commission, prima facie competition
              concerns nor give rise to a risk that the implementation of the Commitments will be
              delayed. In particular, the Purchaser must reasonably be expected to obtain all necessary
              approvals from the relevant regulatory authorities for the acquisition of the Divestment
              Business.
18. The final binding sale and purchase agreement (as well as ancillary agreements) relating to the
    divestment of the Divestment Business shall be conditional on the Commission’s approval. When
    GSK has reached an agreement with a purchaser, it shall submit a fully documented and reasoned
    proposal, including a copy of the final agreement(s), within one week to the Commission and the
    Monitoring Trustee. GSK must be able to demonstrate to the Commission that the purchaser fulfils
    the Purchaser Criteria and that the Divestment Business is being sold in a manner consistent with
    the Commission's Decision and the Commitments. For the approval, the Commission shall verify
    that the purchaser fulfils the Purchaser Criteria and that the Divestment Business is being sold in a
    manner consistent with the Commitments including their objective to bring about a lasting
    structural change in the market. The Commission may approve the sale of the Divestment
    Business without one or more Assets or parts of the Personnel, or by substituting one or more
    Assets or parts of the Personnel with one or more different assets or different personnel, if this
    does not affect the viability and competitiveness of the Divestment Business after the sale, taking
    account of the proposed purchaser.
                                                          8
 ---pagebreak--- Section E.         Trustee
       I.          Appointment procedure
19. GSK shall appoint a Monitoring Trustee to carry out the functions specified in these Commitments
    for a Monitoring Trustee. GSK commits not to close the Concentration before the appointment of
    a Monitoring Trustee.
20. If GSK has not entered into a binding sale and purchase agreement regarding the Divestment
    Business [Time period] before the end of the First Divestiture Period or if the Commission has
    rejected a purchaser proposed by GSK at that time or thereafter, GSK shall appoint a Divestiture
    Trustee. The appointment of the Divestiture Trustee shall take effect upon the commencement of
    the Trustee Divestiture Period.
21. The Trustee shall:
       (i) at the time of appointment, be independent of GSK and Pfizer and their Affiliated
       Undertakings;
       (ii) possess the necessary qualifications to carry out its mandate, for example have sufficient
       relevant experience as an investment banker or consultant or auditor; and
       (iii) neither have nor become exposed to a Conflict of Interest.
22. The Trustee shall be remunerated by GSK in a way that does not impede the independent and
    effective fulfilment of its mandate. In particular, where the remuneration package of a Divestiture
    Trustee includes a success premium linked to the final sale value of the Divestment Business, such
    success premium may only be earned if the divestiture takes place within the Trustee Divestiture
    Period.
                   Proposal by GSK
23. No later than [Time period] after the Effective Date, GSK shall submit the name or names of one
    or more natural or legal persons whom GSK proposes to appoint as the Monitoring Trustee to the
    Commission for approval. No later than [Time period] before the end of the First Divestiture
    Period or on request by the Commission, GSK shall submit a list of one or more persons whom
    GSK proposes to appoint as Divestiture Trustee to the Commission for approval. The proposal
    shall contain sufficient information for the Commission to verify that the person or persons
    proposed as Trustee fulfil the requirements set out in paragraph 21 and shall include:
       (a)        the full terms of the proposed mandate, which shall include all provisions necessary to
                  enable the Trustee to fulfil its duties under these Commitments;
       (b)        the outline of a work plan which describes how the Trustee intends to carry out its
                  assigned tasks; and
       (c)        an indication whether the proposed Trustee is to act as both Monitoring Trustee and
                  Divestiture Trustee or whether different trustees are proposed for the two functions.
                                                           9
 ---pagebreak---                    Approval or rejection by the Commission
24. The Commission shall have the discretion to approve or reject the proposed Trustee(s) and to
    approve the proposed mandate subject to any modifications it deems necessary for the Trustee to
    fulfil its obligations. If only one name is approved, GSK shall appoint or cause to be appointed the
    person or persons concerned as Trustee, in accordance with the mandate approved by the
    Commission. If more than one name is approved, GSK shall be free to choose the Trustee to be
    appointed from among the names approved. The Trustee shall be appointed within one week of the
    Commission’s approval, in accordance with the mandate approved by the Commission.
                   New proposal by GSK
25. If all the proposed Trustees are rejected, GSK shall submit the names of at least two more natural
    or legal persons within one week of being informed of the rejection, in accordance with
    paragraphs 19 and 24 of these Commitments.
                   Trustee nominated by the Commission
26. If all further proposed Trustees are rejected by the Commission, the Commission shall nominate a
    Trustee, whom GSK shall appoint, or cause to be appointed, in accordance with a trustee mandate
    approved by the Commission.
        II.        Functions of the Trustee
27. The Trustee shall assume its specified duties and obligations in order to ensure compliance with
    the Commitments. The Commission may, on its own initiative or at the request of the Trustee or
    GSK, give any orders or instructions to the Trustee in order to ensure compliance with the
    conditions and obligations attached to the Decision.
                   Duties and obligations of the Monitoring Trustee
28. The Monitoring Trustee shall:
    (i)       propose in its first report to the Commission a detailed work plan describing how it
              intends to monitor compliance with the obligations and conditions attached to the
              Decision;
    (ii)      oversee, in close co-operation with the Hold Separate Manager, the on-going management
              of the Divestment Business with a view to ensuring its continued economic viability,
              marketability and competitiveness and monitor compliance by the Parties with the
              conditions and obligations attached to the Decision. To that end the Monitoring Trustee
              shall:
                (a) monitor the preservation of the economic viability, marketability and
                      competitiveness of the Divestment Business, and the keeping separate of the
                      Divestment Business from the business retained by the Parties, in accordance with
                      paragraphs 8 – 10 of these Commitments;
                                                       10
 ---pagebreak---          (b) supervise the management of the Divestment Business as a distinct and saleable
              entity, in accordance with paragraph 11 of these Commitments;
         (c) with respect to Confidential Information:
                   determine all necessary measures to ensure that the Parties do not after the
                    Effective Date obtain any Confidential Information relating to the
                    Divestment Business,
                   in particular strive for the severing of the Divestment Business’ participation
                    in a central information technology network to the extent possible, without
                    compromising the viability of the Divestment Business,
                   make sure that any Confidential Information relating to the Divestment
                    Business obtained by the Parties before the Effective Date is eliminated and
                    will not be used by the Parties and
                   decide whether such information may be disclosed to or kept by the Parties as
                    the disclosure is reasonably necessary to allow the Parties to carry out the
                    divestiture or as the disclosure is required by law;
         (d) monitor the splitting of assets and the allocation of Personnel between the
              Divestment Business and the Parties or Affiliated Undertakings;
(iii) propose to the Parties such measures as the Monitoring Trustee considers necessary to
      ensure the Parties’ compliance with the conditions and obligations attached to the
      Decision, in particular the maintenance of the full economic viability, marketability or
      competitiveness of the Divestment Business, the holding separate of the Divestment
      Business and the non-disclosure of competitively sensitive information;
(iv)  review and assess potential purchasers as well as the progress of the divestiture process
      and verify that, dependent on the stage of the divestiture process:
         (a) potential purchasers receive sufficient and correct information relating to the
              Divestment Business and the Personnel in particular by reviewing, if available, the
              data room documentation, the information memorandum and the due diligence
              process, and
         (b) potential purchasers are granted reasonable access to the Personnel;
(v)   act as a contact point for any requests by third parties, in particular potential purchasers, in
      relation to the Commitments;
(vi)  provide to the Commission, sending GSK a non-confidential copy at the same time, a
      written report within 15 days after the end of every month that shall cover the operation
      and management of the Divestment Business as well as the splitting of assets and the
      allocation of Personnel so that the Commission can assess whether the business is held in
      a manner consistent with the Commitments and the progress of the divestiture process as
      well as potential purchasers;
                                                   11
 ---pagebreak---     (vii)    promptly report in writing to the Commission, sending GSK a non-confidential copy at the
             same time, if it concludes on reasonable grounds that GSK is failing to comply with these
             Commitments;
    (viii)   within three working days after receipt of the documented proposal referred to in
             paragraph 18 of these Commitments, submit to the Commission, sending GSK a non-
             confidential copy at the same time, a reasoned opinion as to the suitability and
             independence of the proposed purchaser and the viability of the Divestment Business after
             the Sale and as to whether the Divestment Business is sold in a manner consistent with the
             conditions and obligations attached to the Decision, in particular, if relevant, whether the
             Sale of the Divestment Business without one or more Assets or not all of the Personnel
             affects the viability of the Divestment Business after the sale, taking account of the
             proposed purchaser; and
    (ix)     assume the other functions assigned to the Monitoring Trustee under the conditions and
             obligations attached to the Decision.
29. If the Monitoring and Divestiture Trustee are not the same legal or natural persons, the Monitoring
    Trustee and the Divestiture Trustee shall cooperate closely with each other during and for the
    purpose of the preparation of the Trustee Divestiture Period in order to facilitate each other's tasks.
                  Duties and obligations of the Divestiture Trustee
30. Within the Trustee Divestiture Period, the Divestiture Trustee shall sell at no minimum price the
    Divestment Business to a purchaser, provided that the Commission has approved both the
    purchaser and the final binding sale and purchase agreement (and ancillary agreements) as in line
    with the Commission's Decision and the Commitments in accordance with paragraphs 17 and 18
    of these Commitments. The Divestiture Trustee shall include in the sale and purchase agreement
    (as well as in any ancillary agreements) such terms and conditions as it considers appropriate for
    an expedient sale in the Trustee Divestiture Period. In particular, the Divestiture Trustee may
    include in the sale and purchase agreement such customary representations and warranties and
    indemnities as are reasonably required to effect the sale. The Divestiture Trustee shall protect the
    legitimate financial interests of GSK, subject to the Notifying Party’s unconditional obligation to
    divest at no minimum price in the Trustee Divestiture Period.
31. In the Trustee Divestiture Period (or otherwise at the Commission’s request), the Divestiture
    Trustee shall provide the Commission with a comprehensive monthly report written in English on
    the progress of the divestiture process. Such reports shall be submitted within 15 days after the end
    of every month with a simultaneous copy to the Monitoring Trustee and a non-confidential copy to
    GSK.
        III.      Duties and obligations of the Parties
32. The Parties shall provide and shall cause its advisors to provide the Trustee with all such co-
    operation, assistance and information as the Trustee may reasonably require to perform its tasks.
    The Trustee shall have full and complete access to any of the Parties or the Divestment Business’
    books, records, documents, management or other personnel, facilities, sites and technical
    information necessary for fulfilling its duties under the Commitments and the Parties and the
                                                        12
 ---pagebreak---     Divestment Business shall provide the Trustee upon request with copies of any document. GSK
    and the Divestment Business shall make available to the Trustee one or more offices on their
    premises and shall be available for meetings in order to provide the Trustee with all information
    necessary for the performance of its tasks.
33. The Parties shall provide the Monitoring Trustee with all managerial and administrative support
    that it may reasonably request on behalf of the management of the Divestment Business. This shall
    include all administrative support functions relating to the Divestment Business which are
    currently carried out at headquarters level. The Parties shall provide and shall cause its advisors to
    provide the Monitoring Trustee, on request, with the information submitted to potential
    purchasers, in particular give the Monitoring Trustee access to the data room documentation and
    all other information granted to potential purchasers in the due diligence procedure. GSK shall
    inform the Monitoring Trustee on possible purchasers, submit lists of potential purchasers at each
    stage of the selection process, including the offers made by potential purchasers at those stages,
    and keep the Monitoring Trustee informed of all developments in the divestiture process.
34. GSK shall grant or procure GSK’s Affiliated Undertakings to grant comprehensive powers of
    attorney, duly executed, to the Divestiture Trustee to effect the sale (including ancillary
    agreements), the Closing and all actions and declarations which the Divestiture Trustee considers
    necessary or appropriate to achieve the sale and the Closing, including the appointment of advisors
    to assist with the sale process. Upon request of the Divestiture Trustee, GSK shall cause the
    documents required for effecting the sale and the Closing to be duly executed.
35. GSK shall indemnify the Trustee and its employees and agents (each an “Indemnified Party”) and
    hold each Indemnified Party harmless against, and hereby agrees that an Indemnified Party shall
    have no liability to GSK for, any liabilities arising out of the performance of the Trustee’s duties
    under the Commitments, except to the extent that such liabilities result from the wilful default,
    recklessness, gross negligence or bad faith of the Trustee, its employees, agents or advisors.
36. At the expense of GSK, the Trustee may appoint advisors (in particular for corporate finance or
    legal advice), subject to GSK’s approval (this approval not to be unreasonably withheld or
    delayed) if the Trustee considers the appointment of such advisors necessary or appropriate for the
    performance of its duties and obligations under the Mandate, provided that any fees and other
    expenses incurred by the Trustee are reasonable. Should GSK refuse to approve the advisors
    proposed by the Trustee the Commission may approve the appointment of such advisors instead,
    after having heard GSK. Only the Trustee shall be entitled to issue instructions to the advisors.
    Paragraph 35 of these Commitments shall apply mutatis mutandis. In the Trustee Divestiture
    Period, the Divestiture Trustee may use advisors who served GSK during the Divestiture Period if
    the Divestiture Trustee considers this in the best interest of an expedient sale.
37. The Parties agree that the Commission may share Confidential Information proprietary to the
    Parties with the Trustee. The Trustee shall not disclose such information and the principles
    contained in Article 17 (1) and (2) of the Merger Regulation apply mutatis mutandis.
38. GSK agrees that the contact details of the Monitoring Trustee are published on the website of the
    Commission's Directorate-General for Competition and they shall inform interested third parties,
    in particular any potential purchasers, of the identity and the tasks of the Monitoring Trustee.
                                                        13
 ---pagebreak--- 39. For a period of 10 years from the Effective Date the Commission may request all information
    from the Parties that is reasonably necessary to monitor the effective implementation of these
    Commitments.
        IV.       Replacement, discharge and reappointment of the Trustee
40. If the Trustee ceases to perform its functions under the Commitments or for any other good cause,
    including the exposure of the Trustee to a Conflict of Interest:
    (a) the Commission may, after hearing the Trustee and GSK, require GSK to replace the Trustee;
    or
    (b) GSK may, with the prior approval of the Commission, replace the Trustee.
41. If the Trustee is removed according to paragraph 40 of these Commitments, the Trustee may be
    required to continue in its function until a new Trustee is in place to whom the Trustee has
    effected a full hand over of all relevant information. The new Trustee shall be appointed in
    accordance with the procedure referred to in paragraphs 19-26 of these Commitments.
42. Unless removed according to paragraph 40 of these Commitments, the Trustee shall cease to act as
    Trustee only after the Commission has discharged it from its duties after all the Commitments
    with which the Trustee has been entrusted have been implemented. However, the Commission
    may at any time require the reappointment of the Monitoring Trustee if it subsequently appears
    that the relevant remedies might not have been fully and properly implemented.
Section F.        The review clause
43. The Commission may extend the time periods foreseen in the Commitments in response to a
    request from GSK or, in appropriate cases, on its own initiative. Where GSK requests an extension
    of a time period, it shall submit a reasoned request to the Commission no later than two weeks
    before the expiry of that period, showing good cause. This request shall be accompanied by a
    report from the Monitoring Trustee, who shall, at the same time send a non-confidential copy of
    the report to the Notifying Party. Only in exceptional circumstances shall GSK be entitled to
    request an extension within the last two weeks of any period.
44. The Commission may further, in response to a reasoned request from the Notifying Party showing
    good cause waive, modify or substitute, in exceptional circumstances, one or more of the
    undertakings in these Commitments. This request shall be accompanied by a report from the
    Monitoring Trustee, who shall, at the same time send a non-confidential copy of the report to the
    Notifying Party. The request shall not have the effect of suspending the application of the
    undertaking and, in particular, of suspending the expiry of any time period in which the
    undertaking has to be complied with.
Section G.        Entry into force
45. The Commitments shall take effect upon the date of adoption of the Decision.
                                                      14
 ---pagebreak---                                              SCHEDULE
  1.      The Divestment Business consists of the topical pain management business carried on
          by Pfizer CH under the ThermaCare brand globally.
  2.      In accordance with paragraph 5 of these Commitments, the Divestment Business
          includes:
(a)  The entire product range sold under the ThermaCare brand globally. The ThermaCare
     range includes topical heat wraps, which Pfizer CH manufactures in-house at the Albany
     site, as well as two topical gels/creams manufactured by third parties under contract:
     ThermaCare Ultra Pain Relieving Cream, sold only in the US, and ThermaCare
     Schmerzgel, sold only in Germany.
(b)  A dedicated Pfizer CH manufacturing facility, located in Albany, Georgia, US which
     manufactures 100% of the ThermaCare wraps for sale worldwide. [Information on Pfizer
     CH’s manufacturing facilities] is provided as Annex 1;
(c)  All production equipment at the Albany site, a list of which is included as Annex 2;
(d)  Raw materials if any, work in progress and finished goods inventory, supplies and
     promotional material relating exclusively to the Divestment Business, or necessary to the
     viable operation of the Divestment Business, held at the date of Closing;
(e)  All intellectual property rights relating to existing and legacy products (including, for the
     avoidance of doubt, ThermaCare Cold Wraps and any other discontinued ThermaCare-
     branded product) and R&D or pipeline projects necessary for the viable operation of the
     Divestment Business globally, whether owned by Pfizer or used under third-party license,
     including:
     (i)     All ThermaCare trademark and design rights (including logos, sub-brands,
             taglines, trade dress) and copyrights currently and previously used for the sale of
             products within the Divestment Business across the globe. Relevant trademarks
             (including trademark design rights) identified by the Parties at this stage are listed
             in Annex 3;
     (ii)    All patents (including utility and design patents) relating to the Divestment
             Business (patents identified by the Parties at this stage are listed in Annex 4);
     (iii)   Rights to any domain names that relate to ThermaCare (domain names identified
             by the Parties at this stage are listed in Annex 5).
     For the avoidance of doubt, intellectual property rights that are exclusively or
     predominantly used for or by the Divestment Business will be transferred to the Purchaser
     subject to a non-exclusive, perpetual, irrevocable, royalty-free license-back to the
     Combined CH Business or Pfizer (as the case may be) to the extent any such rights are
     necessary for the operation of any business of the Combined CH Business or of any
     Pfizer business on the Effective Date. GSK and Pfizer shall retain ownership of all of
     their existing intellectual property rights that are not exclusively or predominantly used
     for or by the Divestment Business. If any of these rights are necessary for the viability of
     the Divestment Business (subject to the opinion of the Monitoring Trustee) such rights
     shall be subject to a non-exclusive, perpetual, irrevocable, royalty-free license to the
     Purchaser, to the extent necessary for the operation of the Divestment Business (except as
     specified in paragraphs 2(q) and 2(r) below);
                                                   15
 ---pagebreak--- (f) Transfer of all know-how and data that is exclusively or predominantly used for the
    development, manufacturing and marketing of products by the Divestment Business,
    including recipes for the ThermaCare Schmerzgel and ThermaCare Ultra Pain Relieving
    Cream formulations (subject to a non-exclusive, perpetual, irrevocable, royalty-free
    license-back to the Combined CH Business or Pfizer to the extent any such know-how or
    data are necessary for the operation of any business of the Combined CH Business or
    Pfizer on the Effective Date); and a non-exclusive, perpetual, irrevocable, royalty-free
    license to the Purchaser of all know-how and data that is not predominantly used for, but
    necessary for the viable operation of the Divestment Business (if any). This know-how is
    embodied in [Information on ThermaCare knowhow];
(g) All licenses, permits, regulatory approvals and authorizations specific to the operation of
    the Divestment Business issued by any governmental organization for the benefit of the
    Divestment Business;
(h) Ongoing and identified past R&D projects and pipeline products relating to the
    ThermaCare brand globally. A list of pipeline projects is included in Annex 6. At the
    option of the Purchaser, GSK will provide for a reasonable period not exceeding [Time
    period] (with the possibility to extend for a further [Time period], at the Purchaser’s
    request and subject to the opinion of the Monitoring Trustee) technical assistance in
    relation to the transfer of all ongoing pipeline projects in order to enable the Purchaser to
    continue the development of such projects without delay;
(i) All R&D equipment (listed in Annex 7), raw materials and records, the use of which are
    [50-60]% or more devoted to the Divestment Business, or required for the viability of the
    Divestment Business, housed in [Location]. These assets will be transferred to a location
    agreed upon with the Purchaser;
(j) Customer lists, historic and current financial/accounting, marketing and pricing data and
    sales reports, as well as technical files (including regarding the CE mark) associated with
    regulatory approvals, including, for the avoidance of doubt, past business records and
    clinical data, credit and other records and goodwill to the extent exclusively related to the
    Divestment Business or otherwise necessary to ensure the viability and competitiveness
    of the Divestment Business (subject to the opinion of the Monitoring Trustee);
(k) Best efforts to transfer (by way of assignment) the contract manufacturing and supply
    agreements, or relevant portions thereof, with [Information on contract manufacturing
    and supply agreements] relating to, respectively, ThermaCare Ultra Pain Relieving
    Cream and ThermaCare Schmerzgel or, in the absence of transfer, to enable the Purchaser
    to conclude a new contract manufacturing and supply agreements in relation to these
    products, including by sharing the relevant information such as the existing contract terms
    and conditions. To the extent necessary, the Parties commit to use their best efforts to
    conclude back-to-back supply agreements with the Purchaser for a reasonable period not
    exceeding [Time period] after Closing (with the possibility to extend for [Time period] at
    the Purchaser’s request and subject to the opinion of the Monitoring Trustee) until the
    Purchaser concludes its own arrangements;
(l) With regard to any other sourcing or supply agreements or arrangements with third
    parties, including but not limited to the supply agreement with [Third party] for the
    chemistry pre-mix, best efforts (i) to assign these agreements or the relevant portions
    thereof, or (ii) if assignment is not possible, share the relevant supplier details, existing
    terms and conditions and other necessary information in order to assist the Purchaser to
    conclude new agreements with the relevant suppliers at the Purchaser’s option. To the
    extent necessary, the Parties commit to use their best efforts to conclude back-to-back
    sourcing or supply agreements with the Purchaser for a reasonable period not exceeding
    [Time period] after Closing (with the possibility to extend for [Time period] at the
                                                16
 ---pagebreak---     Purchaser’s request and subject to the opinion of the Monitoring Trustee) until the
    Purchaser concludes its own arrangements;
(m) Best efforts to transfer the relationship with the third party [Third party] as regards
    distribution by [Third party] of ThermaCare in the US and transitional support as
    specified in (s) below;
(n) A Hold-Separate Manager, based in the US or the EEA, with all required experience to
    effectively run the ThermaCare business with the support of the personnel under point (o)
    below during the hold-separate period;
(o) Personnel (an organizational chart and list of employees that will be transferred is
    attached as Annex 8)
    (i)    A dedicated supply planner, based in [Location];
    (ii)   All personnel employed at the Albany site, including a dedicated site leader,
           management team and production team;
    (iii)  Dedicated research and development personnel [Information on Pfizer CH
           personnel];
    (iv)   Dedicated personnel for marketing: [Information on Pfizer CH marketing
           personnel]. Additionally, in relation to other personnel who are involved on the
           Effective Date in the sale of ThermaCare in the countries in [Geography], the
           Parties commit to offer the Purchaser the opportunity on request for [Time period],
           to interview and hire such personnel, provided that the Parties shall act in good
           faith in evaluating any potential role changes or redundancies for such personnel,
           and shall not carry out any such role changes or redundancies for the purpose of
           frustrating this commitment, without prejudice to the application of the other
           provisions of these Commitments including paragraph 10 above, provided further
           that the Purchaser may hire at most [50-60]% of such personnel;
    (v)     [Number] newly created positions of dedicated sales persons covering
           [Geography].
(p) Of the Personnel mentioned in (o) above, the Key Personnel are:
    (i)    Hold Separate Manager;
    (ii)   [Information on Pfizer CH Key Personnel name], [Geography] site leader,
           [Information on Pfizer CH Key Personnel work location];
    (iii)  [Information on Pfizer CH Key Personnel name], Site Supply Chain Lead,
           [Information on Pfizer CH Key Personnel work location];
    (iv)   [Information on Pfizer CH Key Personnel name], Process Technology & Medical
           Device Engineering Lead, [Information on Pfizer CH Key Personnel work
           location];
    (v)    [Information on Pfizer CH Key Personnel name], Site Engineer/EHS Lead,
           [Information on Pfizer CH Key Personnel work location];
    (vi)   [Information on Pfizer CH Key Personnel name], Site OpEx Training Lead,
           [Information on Pfizer CH Key Personnel work location];
    (vii) [Information on Pfizer CH Key Personnel name] , Site Operations Lead,
                                              17
 ---pagebreak---            [Information on Pfizer CH Key Personnel work location];
    (viii) [Information on Pfizer CH Key Personnel name], Principal Scientist Design
           Authority (formerly R&D Manager ThermaCare Design), [Information on Pfizer
           CH Key Personnel work location];
    (ix)   [Information on Pfizer CH Key Personnel name], Senior Associate Product
           Manager, [Information on Pfizer CH Key Personnel work location];
    (x)    [Information on Pfizer CH Key Personnel name], Manager, Brand Lead
           ThermaCare, [Information on Pfizer CH Key Personnel work location];
    (xi)   [Information on Pfizer CH Key Personnel name], Product Manager Iberia,
           [Information on Pfizer CH Key Personnel work location];
    (xii) [Information on Pfizer CH Key Personnel name], Product Manager, [Information
           on Pfizer CH Key Personnel work location];
    (xiii) [Information on Pfizer CH Key Personnel name], Junior Product Manager,
           [Information on Pfizer CH Key Personnel work location];
    (xiv) [Information on Pfizer CH Key Personnel name], Business Development Manager,
           [Information on Pfizer CH Key Personnel work location];
    (xv) [Information on Pfizer CH Key Personnel name], Senior Sales Strategy Manager,
           [Information on Pfizer CH Key Personnel work location].
(q) A non-exclusive, royalty-free license to the Robax trademark in Canada for use in the
    field of OTC topical pain management, to allow the Purchaser to manufacture, distribute
    and sell wraps produced by the Divestment Business for a period of [Time period] from
    Closing (with the possibility to extend for a further [Time period], at the Purchaser’s
    request and subject to the opinion of the Monitoring Trustee). Throughout this transitional
    period, the Purchaser shall be able to use the Robax brand without limitations in relation
    to the ThermaCare/Robax co-branded products, and the Parties commit not to use the
    Robax brand for topical pain management products during this transitional period;
(r) A non-exclusive, royalty-free license to the Pfizer trademark in the countries where the
    Divestment Business operates, for use in the field of OTC topical pain management, for
    the limited purpose of allowing the Purchaser to sell ThermaCare wraps under the Pfizer
    trademark until the Purchaser fulfills all applicable regulatory requirements (including
    obtaining its own CE marking), for a transitional period not exceeding [Time period]
    from Closing (with the possibility to extend for a further [Time period], at the purchaser’s
    request and subject to the opinion of the Monitoring Trustee);
(s) Transitional supply and service arrangements in order to maintain the economic viability
    and competitiveness of the Divestment Business as agreed with the Purchaser (unless the
    Purchaser does not require such transitional support). All transitional agreements will be
    completed at the option of the Purchaser, for a transitional period of up to [Time period]
    after Closing (with the possibility to extend for a further [Time period], at the Purchaser’s
    request and subject to the opinion of the Monitoring Trustee) on a cost basis. Such
    transitional support includes:
    (i)    Transitional packaging agreement for the secondary packaging of the ThermaCare
           SKUs identified in Annex 9 from [Location];
    (ii)   Transitional agreements covering inter alia transport, warehousing and logistics;
                                               18
 ---pagebreak---      (iii)   Transitional back-to-back arrangements for the distribution of ThermaCare
             products in countries where the Divestment Business relies on third-party
             distributors;
     (iv)    Transitional support for IT systems;
     (v)     Transitional services covering quality systems and adverse event reporting
             (currently provided from Pfizer’s [Location] sites);
     (vi)    Transitional back-to-back arrangement for the dedicated sales support of
             ThermaCare in the US through broker [Third party];
     (vii) The Parties will collaborate with the Purchaser to identify, negotiate and agree on
             additional transitional arrangements to ensure smooth operation of the Divestment
             Business.
3.       The Divestment Business shall not include:
(a)      the space occupied by the Medical Device Design Center in Richmond, Virginia US
         and all equipment, raw materials and records housed in that space, the use of which
         are less than [50-60]% devoted to the Divestment Business (all equipment, raw
         materials and records that are [50-60]% or more devoted to the Divestment Business
         are in scope);
(b)      the Cluj, Romania Site;
(c)      intellectual property rights which are not related to the operation of the Divestment
         Business;
(d)      the Robax brand or trademark (save for a limited, transitional, non-exclusive
         trademark licence as referred to in paragraph 2(q) above);
(e)      the “GSK” or “Pfizer” company name, marks, logos and domain names in any form
         (with the exception of the limited, transitional, non-exclusive license to the Pfizer
         trademark as referred to in paragraph 2(r) above);
 (f)     subject to 2(o)(iv) above, shared functions and personnel who devote less than [50-
         60]% of their work to the ThermaCare Business, including;
         (1) Corporate;
         (2) Finance (except two dedicated FTEs in Albany);
         (3) Human Resources;
         (4) Legal;
         (5) Broader R&D facilities and personnel, provided however, that solely in respect of
         the [Number] personnel from the Combined CH Business’s functional group
                                                19
 ---pagebreak---    “[Personnel Group]”, GSK commits to offer to the Purchaser the opportunity on
   request to interview and employ such personnel;
   (6) Commercial/Marketing;
   (7) Sales, customer support and logistics;
   (8) IT systems;
   (9) other back office functions; and
   (10) a number of shared resources in the areas of regulatory, safety, quality, post-
   market surveillance and pharmacovigilance requirements that are not dedicated to
   Thermacare.
4. If there is any asset or personnel which is not covered by paragraph 2 of this Schedule
   but which is both used (exclusively or not) in the Divestment Business and necessary
   for the continued viability and competitiveness of the Divestment Business (subject to
   the opinion of the Monitoring Trustee), that asset or adequate substitute will be offered
   to the Purchaser.
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