Price-Fixing Alleged in Drug for Babies

MINNEAPOLIS (CN) – After Ovation Pharmaceuticals bought rights to the only competing drug used to treat heart defects in premature babies, it jacked the price up from $26 a vial to $500, an antitrust class action claims in Federal Court.

     From 1985 to 2006, Ovation monopolized the market with Indocin, which helps close a opening between the pulmonary artery and the aorta, says the plaintiff, the Community Medical Center Healthcare System.
     Drug treatment is preferable to surgery, the only other, significantly riskier, treatment available. Every year more than 30,000 babies are born with the defect, called patent ductus arteriosus (PDA), the complaint states.
     “The drug therapy is available only from defendants, which control 100 percent of the market for the only two drugs useable to treat PDA.”
     In 2006, Abbott Laboratories launched a competing drug, NeoProfen. Ovation’s successor, co-defendant Lundbeck Pharmaceuticals, swiftly bought the U.S. rights to it.
     Lundbeck “expected NeoProfen to take substantial sales from Indocin and realized that acquiring NeoProfen would eliminate this competitive threat, thereby allowing (Lundbeck) to maintain its monopoly power,” the complaint states.
     “Having eliminated the threat of competition from NeoProfen, by July 2006 Ovation increased the price of Indocin nearly 1,300 percent (sic) to $500 a vial as compared to $25 a vial in August 2005 when Indocin was being sold by Merck,” according to the complaint. “When Ovation launched NeoProfen, it set the price at $483 per vial, essentially marching the price of Indocin. These prices have remained at or above that level ever since. …
     “Since August 2005 hospitals have had no alternative but to pay the artificially high prices imposed as a result of Defendants’ monopoly power.”
     It’s the second such class action involving the drugs. The Federal Trade Commission sued Lundbeck on similar allegations in December.
     The class in the latest complaint is represented by Daniel Gustafson with Gustafson Gluek.

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