FTC Sues Ovation Over Alleged Monopoly on Prescription Drugs for Infants
The Federal Trade Commission on Tuesday filed a lawsuit in U.S. District Court in Minneapolis over allegations that Ovation Pharmaceuticals sought to form a monopoly on the two medications for patent ductus arteriosus, a life-threatening heart condition in infants, and increased the price of the treatments by 1,300%, Bloomberg/Seattle Times reports (Rowley, Bloomberg/Seattle Times, 12/17).
According to the lawsuit, Ovation in 2005 acquired from Merck the rights to Indocin, at the time the only medication available for PDA, which affects about 30,000 premature infants annually. In January 2006, Ovation acquired the rights to NeoProfen, a rival medication in the late stages of development, and increased the price of Indocin from $26 to almost $500. Ovation charged a similar price for NeoProfen after the medication reached the market in July 2006 (Marcotty, Minneapolis Star Tribune, 12/17).
The lawsuit states, "Ovation's acquisition of NeoProfen substantially reduced competition and illegally maintained Ovation's monopoly in drug treatments for PDA, depriving consumers of the benefits of competition and the lower prices such competition would bring" (Rockoff, Wall Street Journal, 12/17). In addition, the lawsuit states that the "artificially high prices that hospitals are forced to pay ultimately raise costs for families, tax-supported programs such as Medicaid, and other public and private purchasers" (AP/Washington Post, 12/17).
The lawsuit asks the court to require Ovation to divest one of the medications and repay purchasers "all lawfully obtained profits" from the monopoly that began in 2006 (Bloomberg/Seattle Times, 12/17).
Comments
FTC Commissioner Jon Leibowitz said, "To achieve its dominant position, Ovation monopolized the market and bought its most imminent threat" (Japsen, Chicago Tribune, 12/17). He added, "Ovation's profiteering on the backs of critically ill premature babies is not only immoral, it is illegal" (Minneapolis Star Tribune, 12/17).
In a statement, Ovation officials said that the company "strongly disputes the claims in the complaint, strongly disputes the FTC's characterization of the facts and the propriety of seeking disgorgements" (Snowbeck, St. Paul Pioneer Press, 12/16). Ovation officials said that NeoProfen is superior to Indocin and is not interchangeable for most infants with PDA. They added that the company "welcomes the opportunity to demonstrate in court in Minneapolis that the FTC's allegations and claims are without merit" (AP/Washington Post, 12/17).
