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Healthy Skepticism Library item: 14832

Warning: This library includes all items relevant to health product marketing that we are aware of regardless of quality. Often we do not agree with all or part of the contents.

 

Publication type: news

Japsen B.
Ovation sued after hiking price of heart drug 1,300%
The Chicago Tribune 2008 Dec 16
http://www.chicagotribune.com/business/chi-biz-ftc-ovation-heart-dec14,0,2696509.story


Full text:

A Deerfield-based pharmaceutical company gained control of the only two drugs that treat premature babies’ heart defects, then raised the course of treatment nearly 1,300 percent, the Federal Trade Commission said in a lawsuit that accused Ovation Pharmaceuticals Inc. of violating antitrust laws.

The FTC said Ovation engineered an unlawful acquisition when it acquired the drug NeoProfen in January 2006 from Abbott Laboratories, knowing it was buying the only rival to a drug it bought just one year earlier. Ovation already held the rights to Indocin I.V., a drug developed by Merck & Co. The drugs were used to treat a serious and potentially deadly congenital heart defect affecting more than 30,000 premature babies born in the U.S. annually.

“To achieve its dominant position, Ovation monopolized the market and bought its most imminent threat,” FTC Commissioner Jon Leibowitz said. “The course of treatment rose from about $108 in 2005, before the transaction at issue, to about $1,500 today. Ovation’s profiteering on the backs of critically ill premature babies is not only immoral, it is illegal.”

Jeffrey Aronin, chief executive of Ovation, was unavailable for an interview Tuesday. In a statement, Ovation said it “strongly disputes the claims” in the FTC’s complaint and believes the allegations are “without merit.”

Ovation said it believes Neoprofen is “superior” to Indocin even though the FTC, citing doctor and hospital experience, said the drugs are interchangeable. Asked to provide evidence that Neoprofen is superior, Ovation spokeswoman Sally Young said: “We’ll argue those details in court.”

The suit, filed in U.S. District Court in Minneapolis, came after the agency was alerted by U.S. Sen. Amy Klobuchar (D-Minn.). She had been looking into a complaint by Minneapolis Children’s Hospital about Indocin’s pricing. The drug, which is administered intravenously, is a standard treatment and the only alternative to surgery for patent ductus arteriosis, or PDA, a disorder that prevents holes from healing in the hearts of premature infants.

“The rising cost of health care is bad enough without the added problem of price-gouging by a drug company,” Klobuchar said Tuesday. “Pharmaceutical medicines are a remarkable success story of American science, but it’s not a license for a drug company to break the law to take advantage of sick and vulnerable babies.”

The FTC said it hopes its suit forces Ovation to sell one of the drugs and repay to purchasers for what the agency called “unlawfully obtained profits form Ovation’s sales of Indocin and NeoProfen.”

Privately-held Ovation declined to disclose sales or profits from the two drugs. Ovation focuses on niche products that roughly generate between $5 million and $100 million in annual sales that it buys from large drugmakers.

The FTC said Ovation acquired Neoprofen for less than $55 million, the figure which would have triggered an agency review at the time of the deal.

 

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What these howls of outrage and hurt amount to is that the medical profession is distressed to find its high opinion of itself not shared by writers of [prescription] drug advertising. It would be a great step forward if doctors stopped bemoaning this attack on their professional maturity and began recognizing how thoroughly justified it is.
- Pierre R. Garai (advertising executive) 1963