The FTC announced on December 2, 2009, a proposed consent order settling charges that Watson Pharmaceuticals, Inc.’s acquisition of Robin Hood Holdings Limited, owner of Arrow Pharmaceuticals, would have eliminated future competition for the generic drugs used to treat Parkinson’s disease (Cabergoline) and the side effects of chemotherapy (Dronabinol). The Commission required Watson to sell its generic Cabergoline product to Impax Laboratories Inc., and required Arrow to spin off its subsidiary, Resolution Chemicals, which is currently developing generic Dronabinol, to a new entity, Reso Holdings, within 10 days of the acquisition. Arrow also must sell the U.S. marketing rights for generic Dronabinol to Impax.
Cabergoline, the generic name of Pfizer’s Dostinex, is a dopamine receptor used to treat Parkinson’s disease and medical problems related to the overproduction of the hormone prolactin.The FTC alleged that the U.S. market for the generic version of the drug is highly concentrated, and Arrow is one of only three suppliers in the United States. According to the Commission complaint, Watson has FDA approval to sell generic Cabergoline, and was poised to enter the market within the next two years.
Dronabinol, the generic name for Solvay Pharmaceutical’s Marinol, is used to treat nausea and vomiting caused by chemotherapy, as well as loss of appetite and weight loss in HIV patients. The FTC alleged that the U.S. market for generic Dronabinol is also highly concentrated, with only Watson and Par Pharmaceuticals currently supplying the drug. According to the FTC, Arrow’s subsidiary, Resolution, was one of a limited number of companies developing a generic Dronabinol product, and is planning to enter the market within two years.