Good News on Pill Pricing
A reader wrote in recently to complain that everything I write is negative, a common enough complaint about journalism. Well, today, I've got a bit of good news.
Earlier this week, the Federal Trade Commission won a battle with two drug companies that were preventing the wider distribution of a cheaper, generic form of birth control pill.
In 2001, Barr Laboratories filed an application with the FDA to release a generic form of Ovcon, a birth control pill made by Warner Chilcott. At a cost of about 30 percent less than the brand-name version, it was expected to take market share away from Warner Chilcott.
Two years ago, the FTC alleged, Warner Chilcott paid Barr $20 million to postpone offering the generic until 2009.
"The effect of this anticompetitive agreement between Warner Chilcott and Barr has been to deprive purchasers of the choice of a lower-cost generic alternative to Warner Chilcott's higher-priced branded Ovcon," the FTC
said in a complaint filed in federal court.
Warner Chilcott denies the agreement was anticompetitive. Last month, the FTC sought a preliminary injunction against Warner Chilcott, which was enough to get it to back down from its agreement with Barr. Barr subsequently said that it would begin selling generic Ovcon tablets in the United States.
Barr is not off the hook. The FTC said it's going to keep pursuing a case against the company.
As for Warner Chilcott, a U.S. District Court judge approved a settlement this week that prohibits the company from dabbling in any similar anti-competitive practices in the future. The order lasts 10 years.
Anti-competitive practices obviously have an impact on consumer choice. Typically, though, they seem to involve battles between companies that seem somewhat removed from our everyday lives. I have to admit, in the
gripping prose of an FTC release--written to meet legal requirements--I, too, missed the import of the action.
But according to the FTC's Mitch Katz, the order means women now have access to a lower cost generic form of birth control. And that's good news.
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