Markets Wired

The Federal Trade Commission announced today that it has agreed to settle its complaint against Barr Laboratories, whose agreement with Warner Chilcott, the Commission alleges, unlawfully delayed entry of Barr’s generic version of Warner Chilcott’s Ovcon birth control pill into the market.

As a result of the settlement, Barr must refrain from entering into anticompetitive supply agreements with branded companies similar to Barr’s agreement with Warner Chilcott regarding Ovcon, refrain from entering other agreements with branded manufacturers that unreasonably restrain competition, and notify the Commission of a broader group of agreements with branded companies that have the potential to harm competition. The terms of the proposed settlement will expire in 10 years.

Entry of the final order against Barr brings to an end the FTC’s prosecution against Warner Chilcott and Barr for conspiring to keep a generic version of Ovcon off the market. According to the FTC’s complaint filed in November 2005, Warner Chilcott paid Barr $20 million in return for Barr’s agreement not to sell a generic version of Ovcon until May 2009. Last year, under threat of a preliminary injunction, Warner Chilcott abandoned the portion of its agreement that kept Barr from marketing a generic version of Ovcon. Shortly afterward, Barr began selling generic Ovcon tablets in the United States. As a result of the FTC’s actions, women taking Ovcon now have the choice to purchase a lower-cost generic version of the product.

The Commission vote approving the proposed settlement and authorizing the staff to file it with the court was 5-0. It was filed on November 9, 2007, in the U.S. District Court for the District of Columbia and was signed by the judge and entered by the court on November 27.

The FTC’s Bureau of Competition works with the Bureau of Economics to investigate alleged anticompetitive business practices and, when appropriate, recommends that the Commission take law enforcement action. To inform the Bureau about particular business practices, call 202-326-3300, send an e-mail to antitrust@ftc.gov, or write to the Office of Policy and Coordination, Room 394, Bureau of Competition, Federal Trade Commission, 600 Pennsylvania Ave, N.W., Washington, DC 20580. To learn more about the Bureau of Competition, read “Competition Counts” at http://www.ftc.gov/competitioncounts.