FTC's antitrust loss may set pharma precedent

One drugmaker prevails in an antitrust case, and all drugmakers could benefit. Such is the story with the Federal Trade Commission's recent failure to smack down Ovation Pharmaceuticals (now Lundbeck), The National Law Journal reports. The FTC had accused Ovation of monopolizing treatments for a heart defect in premature infants, then hiking prices by 1,300 percent.

Ovation bought the rights to Indocin IV from Merck in 2005, then snapped up rights to the only other medicine for that heart defect, Abbott Laboratories' experimental NeoProfen. After that acquisition closed, Ovation raised the price of Indocin to $500 per vial from $36 per vial. The FTC stepped in after a U.S. senator and Minnesota doctors called on the agency to act.

But the FTC lawsuit didn't impress Judge Joan Ericksen, and it's her 40-page decision that stands to have a ripple effect for pharma. Ericksen decided that Indocin and NeoProfen didn't occupy the same drug market, even though the two drugs both treat the same condition. So, no monopoly and no antitrust violations, the Journal notes.

"If the case stands, it will be a thorn in the government's side in any future challenge to a pharmaceutical merger," Kevin Arquit, a partner at Simpson Thacher & Bartlett and former general counsel for the FTC, tells the Journal. FTC has 60 days to decide whether to appeal.

- read the story at Law.com