FTC sues Ovation over PDA monopoly

The US Federal Trade Commission has filed a complaint in the District Court for the District of Minnesota challenging Ovation Pharmaceuticals' acquisition of the drug NeoProfen (ibuprofen lysine), which the FTC says eliminated the only competitor for the treatment of patent ductus arteriosus (PDA), a disorder that primarily affects very low birth-weight, premature infants.

In August 2005, Ovation purchased the rights to Indocin (indomethacin) from Merck & Co. According to the FTC's complaint, Ovation expected that fellow PDA drug candidate NeoProfen, once approved, would take a substantial portion of sales from Indocin. To eliminate the threat, the Commission charges, Ovation acquired the US rights to NeoProfen from Abbott Laboratories in January 2006. The transaction fell below the regulatory threshold for reporting to federal antitrust authorities.

By acquiring NeoProfen, the complaint alleges, Ovation preserved its US monopoly in PDA in premature babies. Following the acquisition, the firm raised the price of Indocin from $36 to nearly $500 per vial, and set the price of NeoProfen at virtually the same level. The FDA approved a generic version of Indocin in July 2008, but to date this has not entered the market.