Generic Versions

East bay, CA: (Feb-25-08) Thirty-four states and the District of Columbia brought an antitrust lawsuit against Barr Pharmaceuticals, alleging that the company struck a deal to keep a cheaper, generic version of the oral contraceptive Ovcon off the market. Sources stated that the lawsuit was brought against Barr, of Montvale, NJ, and Warner Chilcott Ltd., of Bermuda, in 2005, alleging that the companies entered into an illegal arrangement when Barr took a $20 million payment from Warner Chilcott in exchange for agreeing to keep a generic version of Ovcon off the market for five years. Following the lawsuit, company sources said that Warner Chilcott annulled its agreement with Barr, opening itself to competition between the two companies. The price of Ovcon dropped 18%, from $39 to $32 within a month of restoring competition to the marketplace in late 2006.

Barr reached a settlement agreement with the states and the District of Columbia for a $5.9 million payout. Under the settlement terms, Barr pays the states $5.9 million, including $500,000 in statutory penalties and attorney fees. The company further agreed not to enter into noncompetition agreements with companies that sell brand-name drugs. In addition, a 10-year consent decree requires Barr to provide copies of any future related agreements. [EAST BAY BUSINESS JOURNAL: GENERIC CONTRACEPTIVES]

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Published on Feb-26-08