On November 29, 2007, the Federal Trade Commission (FTC) announced that it hadsettled its case against Barr Laboratories relating to the drug Ovcon in return for an agreement by Barr, among other things, not to enter into similar transactions in the future. Also, on November 8, 2007, Warner Chilcott announced that it had settled the final direct purchaser claims pending against it in the Ovcon antitrust litigation for $9 million. As we have discussed in prior issues of this Update, the Ovcon antitrust litigation arose out of a transaction pursuant to which Warner Chilcott purchased exclusive rights to Barr’s generic substitute to Warner Chilcott’s Ovcon drug, which the plaintiffs characterize as an agreement by Barr not to compete. After the FTC and 34 states filed antitrust lawsuits against Warner Chilcott and Barr challenging the transaction, private actions by indirect and direct purchasers of Ovcon followed.

Warner Chilcott settled with the FTC in October 2006 shortly after it abandoned the aspect of its transaction that prevented Barr from launching its own generic form of Ovcon. The FTC settlement required Warner Chilcott to take certain steps to preserve the market for the tablet form of Ovcon for several months so that Barr could bring its generic product to market before Warner Chilcott attempted to move the market to a newly-developed chewable form of Ovcon. More recently, Warner Chilcott settled with 34 states, the District of Columbia (and certain indirect purchasers) for $5.5 million, and two other direct purchaser cases for $10 million. Barr’s settlement with the FTC prohibits it from entering into agreements similar to the Warner Chilcott transaction, and also requires Barr to provide notice to the FTC if it enters into certain other types of agreements with branded pharmaceutical companies, for a period of ten years. Barr continues to defend the cases brought against it by the states and private plaintiffs. On October 22, 2007, the district judge hearing the cases raised the stakes in the private litigation when it granted the direct purchasers’ motion for class certification.