Sen. Amy Klobuchar Photo: Nancy B. Olsen

Sen. Amy Klobuchar Photo: Nancy B. Olsen

In July, the Minnesota Independent reported on a hearing sponsored by Sen. Amy Klobuchar that demonstrated significant price gouging by the pharmaceutical industry and that it was causing Minnesotans to suffer. On Tuesday, Klobuchar announced that the Federal Trade Commission and the Minnesota Attorney General Lori Swanson are filing suit in U.S. District Court against Ovation Pharmaceuticals as a result of the July hearing.

At issue in the suit is a drug called Indocin I.V. which is used to save the lives of newborns with heart defects. In 2005, it jumped in price from $108 to $1,500 in a matter of months when it was purchased by the Illinois-based Ovation Pharmaceuticals from multi-national pharma giant Merck.

“Indocin is an old drug,” Dr. Alan L. Goldbloom said in July. He is the president of Children’s Hospitals and Clinics of Minnesota. “It has been on the market for more than three decades, so this dramatic price increase cannot be attributed to the high cost of research and development. As purchasers, the children’s hospitals have had no other options. There have been no other manufacturers of Indocin.”

Goldbloom continued, “Effectively, one company has a monopoly and can use it to price-gouge.”

Ovation is being charged with violating federal anti-trust laws by the FTC and is attempting to force Ovation to give up the profits that were allegedly gained illegally. The FTC is also attempting to force Ovation to divest itself of one of two similar drugs for which Ovation is the only manufacturer.

“A company like Ovation knows that when it comes to saving a baby’s life, price is no object,” Klobuchar said at a news conference on Tuesday. “They literally banked on it. But the FTC is now knocking on their door and demanding that they return the money they gained illegally.”