[Ip-health] Ovation Pharma raises price of heart medicine 1300% after buying sole competitor

[Mike Palmedo]

Ovation Sued After Hiking Price of Heart Drug 1,300%

Tuesday December 16th, 2008
Bruce Japsen
Chicago Tribune

The Federal Trade Commission today sued Deerfield-based drug maker
Ovation Pharmaceuticals Inc., saying the company raised the price of its
heart defect medication 1,300 percent after acquiring its only U.S.
competitor.

When it acquired NeoProfen in January 2006, Ovation already held the
rights to Indocin I.V., the only other drug used to treat a serious and
potentially deadly congenital heart defect affecting more than 30,000
premature babies born in the U.S. annually.

"After ensuring that it would not face competition from NeoProfen,
Ovation promptly raised the price of Indocin nearly 1,300 percent, from
$36 to nearly $500 a vial," the FTC said this morning.

When it launched NeoProfen in July 2006, Ovation set a similarly
inflated price, the agency said.
"By acquiring its only competitor in the treatment of a serious heart
condition affecting premature babies, Ovation has been able to charge
dramatically higher prices for its drugs," said Acting FTC Bureau of
Competition Director David P. Wales.

"While Ovation is profiting from its illegal acquisition, hospitals and
ultimately consumers and American taxpayers are forced to pay millions
of dollars a year more for these life-saving medications. The action
taken today is intended to restore the lost competition and require
Ovation to give up its unlawful profits."

Ovation could not be reached immediately for comment.

--
Mike Palmedo
Research Coordinator
Program on Information Justice and Intellectual Property
American University, Washington College of Law
4910 Massachutsetts Ave., NW Washington, DC 20016
T - 202-274-4442 | F 202-274-0659
mpalmedo@wcl.american.edu