November 7, 2005
Jefferson City, Mo. — Consumers paid more to purchase a popular oral contraceptive because two drug companies illegally blocked the introduction of a generic version, Attorney General Jay Nixon charged in a lawsuit he is filing today in federal district court in the District of Columbia.
Nixon is suing Warner Chilcott Corp. and Barr Pharmaceuticals Inc. for violating state and federal antitrust laws by entering into an agreement which blocked generic competition for Warner Chilcott's oral contraceptive Ovcon. The lawsuit alleges Warner Chilcott paid Barr $20 million to keep it from marketing a generic version of Ovcon. Twenty other states filed the lawsuit with Missouri in federal court; the Federal Trade Commission also filed its own lawsuit against the two companies.
“Competition benefits consumers through increased choices and lower prices,” Nixon said. “These two companies actively prevented competition — and lower prices — for consumers.”
Since 1976, Ovcon has been sold in the United States as a safe and effective oral contraceptive. Warner Chilcott became its exclusive U.S. distributor in 2000. Barr filed an application with the U.S. Food and Drug Administration (FDA) in 2001 to allow it to bring a generic version of Ovcon to market.
In early 2003, Barr announced that it planned to have the generic on the market by the end of that year. In September 2003, Warner Chilcott paid Barr $1 million for the exclusive option to market all products produced once the FDA approved Barr's application. Under the terms of that agreement, once Barr received FDA approval to market the generic version of Ovcon, Warner Chilcott had 90 days to trigger the option by paying Barr $19 million. Once Warner Chilcott made this payment, Barr would be prevented from bringing a generic version of Ovcon to market.
The FDA approved Barr's marketing of generic Ovcon in April 2004. A month later, Warner Chilcott exercised its option by paying Barr $19 million. As of today, Warner Chilcott markets Ovcon and has not marketed any generic version under its agreement with Barr.
“This agreement clearly was meant to restrain competition by keeping generic drugs off the market and protecting the companies' profits,” Nixon said. “The states and the FTC have cooperated to bring these lawsuits to protect consumers.”