Tuesday, December 16, 2008

Ovation Pharmaceuticals help define "gouging"

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.”



Chris MacDonald said...

Lots of people whine about price-gouging, every time they don't like a price.
But this really IS price-gouging.

See my comments here, on the Business Ethics Blog:
Price Gouging on Infant Heart Drugs

Anonymous said...

I have to agree with you on this one. It was very difficult to try and convince physicians that worked on innocent little babies that a drug that used to be pennies a day is the same even though the price was raised. This was an ethical dilemma that I (as an ex-employee) couldn't handle any further. It caused me to completely leave the pharma industry and concentrate my efforts towards the real education of healthcare providers.

I'm glad to see that someone else brought this up even after it first caused a stir over 3 years ago.