New York Drug Litigation Lawyers

States Sue To Stop Anti Generic Drug Collusion

For Immediate Release: November 08, 2005

Lawsuit Alleges Companies’ Agreement Precluded Competition for Oral Contraceptive

The State of New York, 20 other states and the District of Columbia today sued Warner Chilcott Corporation ("Warner Chilcott") and several affiliates and Barr Pharmaceuticals, Inc. ("Barr") for entering into an agreement that blocked generic competition for Warner Chilcott’s oral contraceptive Ovcon. The lawsuit, filed in federal court in Washington, D.C. along with a similar lawsuit by the Federal Trade Commission, alleges that Warner Chilcott paid Barr $20 million to keep Barr from marketing a generic version of Ovcon. The lawsuit seeks injunctive relief, other equitable relief, and monetary penalties.

Under the agreement, signed in March 2004, Warner Chilcott paid Barr $1 million in exchange for an option to acquire an exclusive license to market a generic substitute for Ovcon in the event that the FDA approved Barr’s applications. Under the agreement, which called for an exclusive five year license and a non-exclusive license for the following five years, Barr agreed to supply the product to Warner Chilcott at twice Barr’s manufacturing cost.

The FDA approved Barr’s generic Ovcon in April 2004. Shortly thereafter, Warner Chilcott exercised its option, paying Barr $19 million. As a result, consumers and others have been deprived of a lower-priced generic version to Ovcon since May 2004. Meanwhile, Warner Chilcott has continued to develop its chewable Ovcon, which it expects to launch in early 2006.

The states allege that, in an effort to forestall lower cost generic competition to Ovcon, Warner Chilcott began to develop a chewable, patented form of Ovcon. Once chewable Ovcon was introduced, Warner Chilcott planned to try to switch Ovcon users to the chewable version, and to stop marketing regular Ovcon, thereby extending Warner Chilcott’s monopoly.

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