LAVAL, Quebec—Valeant Pharmaceuticals International, parent of Bausch + Lomb, has agreed to divest Paragon Holdings to settle charges that its May 2015 acquisition of Paragon violated both Federal Trade Commission (FTC) regulations and a section of the Clayton Act, according to a FTC news release earlier this week.

Valeant and an independent Paragon both produced polymer discs used to make rigid gas permeable, or “GP,” contact lenses prior to Valeant’s acquisition.

Valeant will sell 100 percent of Paragon to a newly created entity, Paragon Companies LLC, which will be led by the former president of Paragon, Joe Sicari. Under the settlement, Paragon Companies also will acquire the assets of Pelican Products, a contact lens packaging company that Valeant acquired after its purchase of Paragon, according to the FTC statement. Pelican Products is the sole producer of FDA-approved vials used for shipping some GP lenses.

According to the FTC’s complaint, “Valeant’s acquisition of Paragon eliminated competition between Valeant and Paragon for the sale of FDA-approved buttons used for three types of GP lenses: orthokeratology lenses, worn to reshape the cornea; large-diameter scleral lenses, which cover the white of the eye and are used after eye surgery, for corneal transplants, and to treat eye disease; and general vision correction lenses.”

The acquisition combined the two largest manufacturers of GP buttons, accounting for more than 70 percent of U.S. sales across all three button types, the FTC noted. This allowed Valeant to exercise market power unilaterally in each button market by increasing prices, reducing volume discounts, decreasing innovation, and reducing product distribution options, according to the complaint.

FTC commissioners voted 3-0 to issue the complaint and accept the proposed consent order for public comment. The FTC said it will publish the consent agreement package in the Federal Register shortly. The agreement will be subject to public comment through Dec. 7, 2016, after which the Commission will decide whether to make the proposed consent order final.