FTC Sues Drugmaker For Price Gouging
1 CommentBy Ed Silverman // December 16th, 2008 // 2:35 pm
The Federal Trade Commission filed a civil lawsuit claiming that Ovation Pharmaceuticals illegally maintained a monopoly by purchasing the only two meds approved to treat premature babies born with a potentially life-threatening congenital heart defect - and then raised prices by 1,300 percent. And so the FTC wants the drugmaker to divest either of the two drugs - NeoProfen and Indocin - and also forfeit all “unlawfully obtained profits,” according to the lawsuit filed in federal court in Minnesota.
In the suit, the FTC says Ovation purchased the rights to Indocin in August 2005 from Merck and, five months later, acquired the rights to NeoProfen, which was about to be approved by the FDA, in order to “eliminate (a) competitive threat.” After buying NeoProfen, Ovation raised the price charged hospitals for Indocin from $36 to about $500 per vial. And when NeoProfen was launched in July 2006, the price was $483 per vial, nearly the same price as Indocin. Prices have since remained at the same level. The Minnesota Attorney General has also filed a suit (see here).
“Ovation’s profiteering on the backs of critically ill premature babies is not only immoral, it is illegal,” FTC Commissioner Jon Leibowitz says in a statement. There was a Congressional hearing this past summer about price gouging that mention Ovation, by the way, and here is the background.
In a statement, Ovation rejected the allegations, maintaining that NeoProfen is superior to Indocin, and is not interchangeable for most premature infants with the heart defect. The drugmaker “welcomes opportunity to demonstrate in court in Minneapolis that the FTC’s allegations and claims are without merit.”
Salmon
The condition is known as Patent Ductus Arteriosus, (PDA). (see http://www.nhlbi.nih.gov/health/dci/Diseases/pda/pda_what.html)
As a baby is about to be born the blood vessels from the heart to the lungs have to change configuration to allow for oxygenation from the lungs rather than the placenta.
This requires cell grow in the pulmonary artery going from the heart to the lung. If it doesn’t occur you can induce it by giving a COX inhibitor (NSAID) like indocin from Merck. This has been known for decades.
Vioxx (Merck) also causes excess growth of this same blood vessel, the pulmonary artery, but when it occurs later in life the back pressure puts strain on the heart and you get things like heart attacks, arrythmias and death. This is especially problematic in the elderly where there is already excess growth, loss of elasticity, and atherosclerosis which a drug such as Vioxx would make worse.
Excess growth in the pulmonary artery causing backpressure is known as Pulmonary Arterial Hypertension. It occurs secondary to Phen-Fen and the FDA has warnings about it with Zyprexa and Symbyax (but you have to go into the FDA website and look because it’s not in the labeling).
Many other classes of drugs either cause (many atypical antipsychotics) or prevent this cell growth (statins?).
If Merck made the treatment for this in newborns for decades it makes you wonder if they and others thought about this when they were developing Vioxx.
Salmon