Perrigo Company and Alpharma Inc., F.T.C.

The Commission authorized staff to file a complaint in federal district court charging that Alpharma, Inc. and Perrigo Company drove up the prices for over-the-counter store-brand children’s liquid ibuprofen through an agreement eliminating competition between the two firms and allowing Perrigo to raise its prices creating higher profits to then be shared between the firms. According to the complaint, while both Alpharma and Perrigo filed for U.S. Food and Drug Administration approval to sell a generic version of children’s liquid Motrin, Alpharma was eligible to sell its product at least six months before approval would be granted to Perrigo. The two companies entered into an agreement not to compete whereby Perrigo would sell the children’s liquid ibuprofen for seven years and Alpharma, while would not marketing a competing product, would receive an up-front payment and a royalty on Perrigo’s sales of the product. To settle the charges, Alpharma and Perrigo paid a total of $6.25 million in illegal profits and agreed not to enter into agreements not to compete when one party to the agreement is a first filer of an abbreviated new drug application.