Wednesday, December 17, 2008

Fed Sues Ovation

The federal government on Tuesday sued Ovation Pharmaceuticals Inc., accusing the Deerfield company of illegally raising the price for a drug that treats heart defects in babies.
The Federal Trade Commission claims that in 2006, Ovation raised the price of its drug, Indocin, to nearly $500 a vial from $36, after acquiring the rights to the only competitor drug on the market.

“By acquiring its only competitor in the treatment of a serious heart condition affecting premature babies, Ovation has been able to charge dramatically higher prices for its drugs,” acting FTC Bureau of Competition Director David P. Wales said in a statement. “While Ovation is profiting from its illegal acquisition, hospitals and ultimately consumers and American taxpayers are forced to pay millions of dollars a year more for these life-saving medications.”

Here is what Chris MacDonald has to say about this price-gouging:

OK, so, find a super-vulnerable population that desperately needs your product. Eliminate all competition. Then jack up the price more than 1000%. Yup, that pretty much takes the cake.

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