South Korea tells Bayer to divest oral contraceptives business

Bayer Korea has been ordered to divest its oral contraceptives business, chiefly its Mercilon (ethinylestradiol) drug, which it acquired when its Germany parent Bayer bought Merck's ($MRK) consumer-care business recently.

Bayer Korea has an 82% share of South Korea's market for over-the-counter contraceptives with 5 drugs, Mercilon the dominant one with a 43% share by itself. Its other drugs in that category are Myvlar, Minivlar, Meliane and Triquilar, which together claim another 39% of the market.

The FTC said South Korea's market for contraceptives already was dominated by imported drugs and that Bayer's dominance put it in a position to control it. The agency suggested it would move to block any effort by Bayer to increase its prices for any of the drugs.

A Bayer spokesperson said it respected the FTC decision, but suggested the company could oppose it, probably challenging the action in court.

An agency official said it would require Bayer Korea to consult with the FTC while selling the business so it can be sure the buyer is in a position to compete with Bayer.

Under South Korean law, a company with a majority share of a particular market and at least a 25% share more than its closest competitor must reduce its share below that percentage.

Bayer paid $14.2 billion for the Merck business in a deal recently completed in the United States.

- here are the stories from Yonhap News and Korea Times
- and here's the Bayer October release

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