Legal Library: Cases and Proceedings

The Commission settled with Barr Laboratories concluding its federal court action challenging an agreement between Warner Chilcott and Barr in which, the Commission alleged, Barr agreed not to sell a lower-priced generic substitute of Warner Chilcott’s branded Ovcon 35, an oral contraceptive drug, for several years for $20 million. On November 5, 2005 a complaint was filed in District Court for the District Columbia seeking to put an end to an agreement between drug manufacturers Galen Chemicals Ltd. (now known as Warner Chilcott) and Barr Laboratories that denies consumers the choice of a lower priced generic version of Warner Chilcott’s Ovcon® oral contraceptive. According to the FTC’s complaint, Barr planned to launch a generic version of Ovcon as soon it received regulatory approval from the Food and Drug Administration. Warner Chilcott expected to lose half its Ovcon sales within the first year if Ovcon faced competition from a generic equivalent. Faced with this prospect, instead of competing with Barr, Warner Chilcott entered into an agreement 24 with Barr, preventing entry of Barr’s generic Ovcon into the United States for five years. In exchange for Barr’s promise not to compete, Warner Chilcott paid Barr $20 million. In September 2006, under the threat of a preliminary injunction sought by the Commission, Warner Chilcott waived the exclusionary provision in its agreement, and the next day Barr announced its intention to start selling generic Ovcon in the United States. Under the terms of the October 2006 order settling the Commission’s charges, Warner Chilcott agreed to certain terms to protect generic entry into the market.