Norvir Pricing Campaign

ABBOTT NORVIR PRICE HIKE MATERIALS


ABBOTT PATIENT ASSISTANCE PROGRAM

SPREADSHEET ON PRICE INCREASE IMPACTfrom AIDS Treatment Data Network


CHART SHOWING EFFECT OF PRICE HIKE ON COSTS OF REGIMENS

 

Historic Bayh-Dole Hearing at NIH on May 25, 2004
Comments of Bob Huff, ATAC & GMHC Treatment Issues Comments of Lynda Dee, JD, ATAC & AIDS Action Baltimore Comments of Benjamin Young, MD Abbott's testimony

 

FDA WARNING TO ABBOTT ABOUT NORVIR



ARTICLES ABOUT PRICE INCREASE

FLYERS ABOUT PRICE INCREASE

 

ABBOTT PATIENT ASSISTANCE PROGRAM

Abbott recently raised the price of Novir by 400%. Abbott is also claiming that its Patient Assistance Program (PAP) has ben expanded to assist people without preseciption drug coverage or public assistance to access free Norvir regardless of their financial status. You may receive a PAP application by calling 1-800-222-6885 and selecting option 2 from 8am to 5pm CST Monday thru Friday or by visiting the Abbott website at www.Abbottvirology.com.

If you have any problems accessing Norvir from Abbott, please contact Lynda Dee immediately at [email protected].

Thank you and good luck.

http://www.aidsmap.com/news/newsdisplay2.asp?newsId=2466

18 December 2003
Keith Alcorn

US doctors plan cross the board Abbott product boycott after 400% ritonavir price hike
Abbott Laboratories is facing mounting criticism following its decision to quadruple the price of ritonavir Norvir in the United States. The company emphasises that the price rise only applies to the US, not to Europe.

An Abbott spokesperson told aidsmap that the price rise "reflects the value that Norvir brings to combination therapy", and argued that the price rise is necessary in order to support investment in new formulations of Kaletra and Norvir that will not require refrigeration, together with a new HIV protease inhibitor in preclinical development. The company also claims that much of the cost of research that has established ritonavir's value as a pharmacokinetic enhancer of other protease inhibitors has been borne by Abbott, an assertion strongly disputed by other companies.

Ritonavir is now used almost entirely to boost levels of other protease inhibitors. The effect of the price increase will be to make Abbott�s product Kaletra (a combination capsule containing lopinavir and ritonavir) the cheapest boosted protease inhibitor on the market.

However, the move is likely to hurt Abbott in other product areas. Outraged US and UK HIV specialists are planning a boycott of Abbott products across all disease areas, designed to ensure that Abbott will lose financially in areas where customers have a choice of product.

Dr Graeme Moyle of the Chelsea and Westminster Hospital told aidsmap: "HIV physicians are very unhappy about this decision and the implications it has on treatment choice and the development of new drugs such as tipranavir and capravirine.

"Physicians are looking at ways we can bring our discontent home to Abbott, including talking to our formulary committees and other physicians about limiting the use of all Abbott drugs and diagnostics and where feasible substituting alternative agents."

Dr Moyle also suggested that the symbiotic relationship between industry and medical community could be fractured by the announcement. He said that some clinicians were considering whether to boycott Abbott meetings and speaking engagements connected with Abbott products, and were even considering a go-slow on recruitment of patients to Abbott studies.

In an open letter issued today, Paul Volberding and Dan Kuritzkes of the US HIV Medicine Association asked Abbott to rescind the price increase. Reflecting a widespread concern over the longer-term implications of the price increase amongst US and British physicians, Dr Joe Eron of the University of North Carolina told aidsmap: "While I understand the business perspective I am dismayed that this happened. This move has dramatic implications for programmes that have limited funding such as Medicaid, and ADAP in some states."

How much?!!

On December 3rd Abbott informed customers that the wholesale price of ritonavir had increased from $205.74 to $1028.71 for 120 100mg capsules � the equivalent of $515 a month if ritonavir is being dosed at 100mg twice daily with another protease inhibitor. The previous cost of the drug lay around $100 - $110 a month when dosing at 100mg twice daily. However, the actual cost to the most vulnerable consumers in the United States - those without insurance who must pay directly for their medicines � is unpredictable due to the complex discounts and charging structures that operate between pharmacies (click here for further information on this issue.

US treatment advocates meeting last week in Phoenix, Arizona, accused Abbott of "feeding off the bones of Medicaid and state ADAPs like a vulture", according to a flyer circulating at the meeting.

However, Abbott says that 90% of US patients will not be affected by the price increase because they are covered by medical insurance of some sort, and any patient who cannot afford Norvir, or whose insurer refuses to cover the cost of the drug, will be able to receive free medication. The company also promises to drop the onerous means testing requirement, in which patients have to provide detailed proof of income for all family members in order to receive the drug free of charge (although at the time of publication, patient assistance information published by Abbott continued to require detailed proof of income and did not inform applicants of the change with respect to Norvir).

Abbott also says that the price of Norvir will remain neutral for public payers, including state Medicaid programs. Drug companies are only allowed to increase the prices they charge public payors by the rate of inflation each year. The cost to state AIDS Drug Assistance Programs (ADAPs) has also been frozen at the old price until March 2005, when the entire funding structure for ADAPs is due to be reviewed by the US Congress.

However, a price hike is possible after this point for both Medicaid and ADAPs, since new formulations of Kaletra and Norvir are promised by 2005. Abbott would be free to charge a higher price to these programmes for a new formulation of Norvir, and might agree in return to offer generous discounts in return for the ability to charge substantially more for Norvir than the current Medicaid price.

The HIV Medicine Association said today: "This increase comes at a time when public programs that provide access to HIV treatment are struggling to keep costs down, and numerous ADAPs have been forced to impose eligibility and formulary restrictions and/or waiting lists". Even though the price for ADAPs has been frozen, pharmacies will bill ADAPs at the new price, leaving them to collect a rebate from the manufacturer. This will take up to six months, HIVMA warns, and could leave state ADAPs in a very difficult financial position.

http://www.aidsmap.com/news/newsdisplay2.asp?newsId=2477

18 December 2003
Keith Alcorn

Ritonavir price increase: what are the consequences in 2004?

Consequences for competitors

This article is part 2 of a two part article. Click here to view part 1.

Although Abbott is trying to downplay the consequences of the ritonavir price increase that took effect on December 4th, pointing to the arrangements made to protect patients and payers from the price shock, a company spokesperson was unrepentant when questioned on the effect of the ritonavir price increase on the cost of other boosted protease inhibitors.

"Other companies must look to their own pricing," said Ann Fahey-Widman of Abbott Laboratories Public Affairs division. "If you're asking about the pricing of another product, you need to call that company and ask about its pricing."

The effect of the price increase is indeed likely to focus attention on the pricing of all new HIV drugs, and will be particularly troubling for the development of tipranavir, a new protease inhibitor which must be boosted with a total of 400mg of ritonavir each day. Tipranavir�s manufacturer Boehringer Ingelheim is widely believed to be contemplating a price for tipranavir that would lie somewhere close to the cost of the new fusion inhibitor Fuzeon (T-20) (around $20,000 a year).

Abbott�s price increase will add approximately $9,000 to the cost of using tipranavir, forcing Boehringer Ingelheim either to cut the price of tipranavir drastically, or limp to market with a product that will cost almost 40% more than Fuzeon (a drug which took many state ADAP programmes to the brink of bankruptcy and forced many states to introduce waiting lists for medications).

The move is also being interpreted as a bid to see off competition in the protease inhibitor market from Bristol Myers-Squibb�s Reyataz (atazanavir). Reyataz costs around $700 a month, and boosting once daily with 100mg of ritonavir added around $50 to this cost prior to the price increase. Until last week, ritonavir-boosted Reyataz was slightly more expensive than Kaletra. The effect of the price increase is to push the cost of ritonavir-boosted Reyataz up by at least $260 a month, making it substantially more expensive than Kaletra.

However. Dr Mike Youle of London's Royal Free Hospital believes that Abbott's action could have an unintended effect on Bristol Myers Squibb's atazanavir development strategy. "This makes it much more attractive for BMS to study the use of atazanavir 600mg as an alternative to Kaletra, since you may achieve very good blood levels at that dose without the need for ritonavir boosting." Bristol Myers Squibb shelved investigation of a 600mg dose after phase II studies showed a higher rate of treatment-limiting hyperbilirubinemia at that dose.

The price increase will have an even more inflationary effect on the cost of Lexiva, the new formulation of amprenavir recently approved in the United States. A license for Lexiva was granted with the recommendation that it should be boosted with ritonavir when used in treatment-experienced patients, at a dose of 700mg of Lexiva and 100mg of ritonavir twice daily. That�s an extra $400-plus a month for any patient who needs amprenavir due to their drug resistance pattern. To dose it once daily would be just as expensive.

Abbott's competitors are also angered by the company's assertion that it must recoup the development costs of research into ritonavir's role as a booster for other company's protease inhibitors.

"In the case of saquinavir, it was Roche who funded the studies into boosting of saquinavir with low dose ritonavir, from 1997 onwards," Andrew Hill of Roche told aidsmap. "The MaxCmin trials were funded 100% by Roche, as were several other clinical trials. Roche has funded trials with the Chelsea and Westminster Hospital in London looking at low dose ritonavir boosting double boosted combinations (atazanavir/SQV/r, fosamprenavir/saquinavir/ritonavir). Roche has also funded research into mechanisms of boosting with alternative drugs, such as ketoconazole and itraconazole [which showed that ritonavir was a superior boosting agent]. The combined cost of this work to Roche is over US $12 million."

The same holds true for Abbott's other competitors. The BEST and HIVNAT 005 trials of indinavir/ritonavir 800/100 mg were funded mainly by Merck, and the CONTEXT, NEAT and SOLO trials of amprenavir/ritonavir were funded by GlaxoSmithKline. Research into use of tipranavir with ritonavir is funded by Boehringer-Ingelheim.

How long before Europe faces a similar price hike?

Although Abbott has assured physicians and community groups in the UK that the price rise only applies to the United States, there is mounting anxiety across Europe that Abbott will seek to price its new formulations, especially Norvir, at much higher levels. Publicly funded health care budgets in Europe may not have the same resilience as US insurance funds when it comes to a large hike in the price of Norvir.

Concern in the UK focuses on the rising cost of salvage therapy, particularly where T-20 and tipranavir might be used together. Some clinicians doubt whether such treatment would be considered cost-effective by NHS purchasers if its annual cost approached �30,000 a year. Recent research based on the TORO 1 and 2 studies of T-20 showed that in advanced HIV patients, the cost per quality adjusted life year of a regimen containing T-20 was �23,200. Forcing the price of other drugs up to the T-20 level, they argue, would make salvage therapy for HIV infection unattractive to the NHS in comparison to other competing claims.

What's it all about?

"People who need salvage regimens are under attack," said Bob Huff, editor of GMHC�s Treatment Issues, a leading treatment newsletter in the United States.

Abbott insists that the price rise is not aimed at fixing its competitors, but at delivering better drugs for patients.

Others see a longer range plan to destabilise the protease inhibitor marketplace by changing the economics of treatment at the very moment when promising data on the use of single-boosted protease inhibitors as maintenance treatment, on dual boosted protease inhibitor treatment and on nucleoside analogue-sparing regimens are beginning to trickle out.

"This isn't just an attack on competitors' pricing, it's an attack on their research strategies. Why bother investing in these areas if Abbott has effectively priced you out of the market in the US?", one pharmaceutical company research scientist told aidsmap.

By pricing others out of the market, Abbott will effectively shape the evidence base in such a way as to ensure that all roads lead to its products, he argues.

"It's a scary abuse of monopoly," he went on, suggesting that all other research into single boosted protease inhibitors and any dual boosted protease inhibitor that excludes Kaletra will grind to a halt.

Is one company to blame?

The dispute plays into a wider debate beginning to take shape in the US, over the extent to which the pharmaceutical industry should be free to set prices. In the UK, the pharmaceutical industry has been warned that the days of the blank cheque may be over, and in many other developed world countries, spiralling drug costs are forcing tougher negotiations over price.

A recent report on HIV drug pricing by the market research company Datamonitor points out: "An influx of new products will require manufacturers to justify setting relatively high price points to sustain profitability in the face of increasing competition."

A collision between the needs of the pharmaceutical industry (for profit and shareholder value), governments (to make tax revenue go further) and patients (for life-sustaining treatment) is fast approaching in North America and Europe, and there are only two possible solutions.

One is a complete overhaul of the profit structure in the pharmaceutical sector, leading at one end of the spectrum to the consolidation of the pharmaceutical sector into a handful of key players, or at the other end to the breakup of big pharma and the advent of a writer/publisher type arrangement, as proposed by the Consumer Project on Technology, in which biotech companies invent drugs and multiple generic manufacturers compete to license those products, with phase III and IV research funded by health maintenance organisations and public payers who seek to define which drugs represent best value.

The other is stricter regulation of price without any structural change in the industry, as proposed recently by The Economist, by which governments reward genuine innovation with higher prices but force drug companies to submit to tighter price regulation.

Either way, a more sophisticated conversation about value and pricing between industry, doctors and patients will be forced to evolve in the next few years.

PRESS RELEASE
For Immediate Release, December 18, 2003
Contact: Jeff Minerd, HIVMA Public Affairs
(703) 299-0412 or [email protected]

HIVMA Asks Abbott to Reconsider Price Hike

The HIV Medicine Association (HIVMA) today called on Abbott Laboratories to rescind its recent 500 percent price hike of ritonavir (Norvir�), a drug necessary to the success of virtually all protease inhibitor combinations for treating HIV infection.

Although ritonavir has little anti-HIV activity of its own at currently used doses, it has become an essential part of many protease inhibitor combinations because it enhances the effect of other anti-HIV drugs. The new pricing means that ritonavir-boosted drug combinations will likely become substantially more expensive.

�While we recognize the value of ritonavir, we are alarmed by your decision to raise the cost of protease inhibitor regimens to the point where many people who need these life-saving drug combinations will struggle to pay for them or won�t have access to them at all,� said Paul Volberding, MD, chairman, and Daniel Kuritzkes, MD, vice-chairman, of the HIVMA Board of Directors, in a letter to Abbott. �In addition to our particular concern about the price increase for ritonavir, we are generally concerned about continuing upward pressure on prices as each new HIV drug is approved.�

The letter acknowledges the important role Abbott played in developing �boosted� protease inhibitor regimens, but asks the drug manufacturer to consider the following detrimental effects of the price hike:

The decision increases the Average Wholesale Price of ritonavir to $8.55 for 100 mg, which equates to a monthly total of $260 for patients who take 100 mg daily as part of an ATV/RTV regimen. Previously, the monthly price was $45.

This much higher cost will likely raise insurance premiums and increase the amount of individuals� co-payments for ritonavir�co-payments that most people with HIV/AIDS can ill afford.

The dramatic increase in price could cause payors to impose restrictions on available HIV/AIDS therapies.

AIDS Drug Assistance Programs (ADAPs) may have to pay more. The price increase will result in higher profits to the pharmacy and wholesaler, which will translate into higher costs to ADAPs, if the reimbursement rate used for pharmacies is indexed to the Average Wholesale Price.

The price hike may create budget problems for ADAPs, since the lag time between payments to pharmacies and receipt of rebates from the manufacturer can be as long as six months.
� This increase comes at a time when public programs that provide access to HIV treatment are struggling to keep costs down, and numerous ADAPs have been forced to impose eligibility and formulary restrictions and/or waiting lists,� the HIVMA letter concludes. �We are deeply disappointed that Abbott has taken a step that will increase costs to these vital safety net programs. On behalf of our members and their patients, we urge you to rescind the price increase for ritonavir.�

The HIV Medicine Association (HIVMA) is the professional home for more than 2,600 physicians, scientists and other health care professionals dedicated to the field of HIV/AIDS, not only those trained in infectious diseases. The Association promotes quality in HIV care and advocates for policies that ensure a comprehensive and humane response to the AIDS pandemic informed by science and social justice.

December 18, 2003


Jeff Devlin
HIV Marketing Director
Abbott Laboratories
200 Abbott Park Road
Abbott Park, IL 60064-6182
Sent via fax to: 847-935-3305

Dear Mr. Devlin:

We are writing on behalf of the Board of Directors of the HIV Medicine Association to urge you to reconsider the recent 500 percent price increase of ritonavir (Norvir�), a drug which as you know is necessary to the success of virtually all protease inhibitor combinations for the treatment of HIV infection. The HIV Medicine Association (HIVMA) represents 2,600 physicians and other health care providers who practice HIV medicine. While we recognize the value of ritonavir, we are alarmed by your decision to raise the cost of protease inhibitor (PI) regimens to the point where many people who need these life-saving drug combinations will struggle to pay for them or will not have access to them at all. In addition to our particular concern about the price increase for ritonavir, we are generally concerned about continuing upward pressure on prices as each new HIV drug is approved.

We appreciate the costs and complexities involved in developing and marketing pharmaceutical products, and your company�s obligation to its shareholders. We also acknowledge the important role that Abbott investigators have played in studying the use of ritonavir as a CYP 3A4 inhibitor and its role in �boosted� PI regimens. Nevertheless, it is critical that the implications of your action on access to the majority of treatment regimens available to persons living with HIV/AIDS in the U.S. be given paramount consideration. In particular, we want to bring to your attention the following:

This decision increases the Average Wholesale Price of ritonavir to $8.55 for 100 mg, which equates to a monthly total of $260 for patients who take 100 mg daily. Previously, the monthly price for these patients was $45.

The new pricing places the cost of ritonavir on a par with that of a number of other protease inhibitors. Whereas ritonavir is an essential component of many boosted protease inhibitor regimens, at currently used doses for boosting (100 mg daily or twice daily) the drug has little or no anti-HIV activity of its own. Therefore, the pricing of this boosted dose of ritonavir at the same level as fully active antiretroviral agents is difficult to support.

This much higher cost will likely raise insurance premium payments and increase the amount of individuals� co-payments for ritonavir�co-payments that most people with HIV/AIDS can ill afford.

It is conceivable that this dramatic increase in price of ritonavir could result in the imposition of restrictions on available HIV/AIDS therapies by payors. We have grave concerns about this precedent and its impact on our patients.
Although Abbott has assured state AIDS Drug Assistance Programs (ADAPs) that they will be held harmless from the price hike, ADAPs will in fact experience additional costs as a result of this action. The price increase will result in higher profits to the pharmacy and wholesaler, which will translate into higher costs to ADAP programs, if the reimbursement rate used for pharmacies is indexed to the Average Wholesale Price. The price increase may create budget problems for ADAP programs, since the lag time between payments to pharmacies and receipt of rebates from the manufacturer can be as long as six months.

This increase comes at a time when public programs that provide access to HIV treatment are struggling to keep costs down, and numerous ADAP programs have been forced to impose eligibility and formulary restrictions and/or waiting lists. We are deeply disappointed that Abbott has taken a step that will increase costs to these vital safety net programs.

On behalf of our members and their patients, we urge you to rescind the price increase for ritonavir.

Sincerely,

Paul Volberding, MD
Daniel R. Kuritzkes, MD
Chairman Vice-Chairman
HIVMA Board of Directors HIVMA Board of Directors

cc: Paul Kelly, Senior Product Manager

Abbott Lifts Price of Norvir 400%
Cost of Longtime HIV Drug Jumps, Reigniting Debate Over Drug Pricing Policies


Wall Street Journal, December 19, 2003

Vanessa Fuhrmans
Staff Reporter

Abbott Laboratories has raised the U.S. price of a key AIDS drug by 400%, a move that could roil the market for HIV treatments and has already reignited the debate over drug pricing policies.

The medication is called Norvir, a protease inhibitor that hasn't been a lucrative seller for Abbott but is widely used in small doses to boost the potency of some AIDS combination-drug therapies. Earlier this month, the Abbott Park, Ill., company notified doctors, AIDS groups and pharmacies that it would raise Norvir's wholesale price for a month's treatment to $265 from $54. The increase, Abbott Laboratories says, adjusts Norvir's price to better reflect the drug's importance in treating AIDS and the costs for improving Norvir's formulation.

The increase triggered a furor that is fast gaining intensity. Because of the special booster role that Norvir plays in HIV treatment, Abbott's move sharply raises the price of a number of combination regimens, which already usually cost between $800 and $1,300 a month.

Critics say Abbott's intention is to push patients away from using Norvir in drug cocktails and switch to its newer AIDS treatment, Kaletra, instead. That would also have the effect of gaining market share for Abbott. Norvir typically is used with other drugs including either Bristol-Myers Squibb Co.'s Reyataz or GlaxoSmithKline PLC's Lexiva. Kaletra, which includes Norvir, is a competitor to both of those drugs.

Reyataz and Lexiva have been making inroads on Kaletra's market share. But with Norvir's price jump, drug cocktails using it suddenly become far costlier than Kaletra. Reyataz's wholesale price is $684 a month and Lexiva wholesales for $480 a month, compared with Kaletra, which Abbott has priced at $580 a month wholesale.

Abbott denies it is raising Norvir's price to shift patients to Kaletra. Rather, the drug maker says, the sharp price increase is a long-overdue adjustment after years of being priced below other protease inhibitors, the class of drugs that has transformed the treatment of AIDS by extending the lives of patients by years. What's more, the company says it invested a substantial amount in reformulating the drug a few years ago after problems with its chemistry temporarily stopped the drug's production.

HIV doctors say they worry that the move could prompt many private insurers to steer patients away from other cocktails toward Kaletra by requiring doctors to get special permission to use the more expensive combination therapies with Norvir.

Or, the higher cost could translate into higher co-payments for patients who take a more expensive regimen with Norvir. "That's likely to happen if insurance companies are smart enough to understand what's happening," said Charles Farthing, chief of medicine at the AIDS Healthcare Foundation.

The higher price for those combined drugs could influence the development of future drugs: At least one widely anticipated AIDS treatment currently is being tested by Germany's Boehringer Ingelheim GmbH, with the idea that it would be used in combination with Norvir.

Critics also say that Abbott's decision belies the drug industry's primary rationale for high drug prices -- that pharmaceutical
companies need to recoup their research and development costs and to fuel innovation. Norvir has been on the market for seven years and has enjoyed a relatively long product life compared with most AIDS drugs.

"This really puts a lie to the idea that companies set drug prices to fund their R&D," says Michael Weinstein, president of the AIDS Healthcare Foundation, an AIDS group that operates clinics in the U.S., Africa and Central America.

The price increase doesn't affect drugs bought by government programs such as Medicaid or community clinics or AIDS Drug Assistance Programs, which collectively cover the majority of Norvir prescriptions written in the U.S. The state-run drug assistance programs, or ADAPs, have negotiated price discounts and freezes for Norvir and other AIDS drugs with companies through the end of 2005.

"We will be very willing to talk through those issues again," when the current ADAP price contracts expire, said Melissa Brotz, an Abbott spokeswoman.

In the past, critics of the drug industry had few complaints about Abbott's pricing policies. In fact, two months ago, the AIDS
Healthcare Foundation publicly praised the company for a recent decision to sell Norvir, Kaletra and other drugs at cost in poor
countries. That will continue despite the U.S. cost increase.


Norvir was the second protease inhibitor to come on to the market in 1996 and the first to show that it increased patients' survival chances. At the time it was priced at $20.52 a day for 1,200 milligrams. But Norvir had harsh side effects for many patients and doctors discovered that the drug worked better in a lower dose that boosted the potency of other protease inhibitors. Of the HIV patients who take Norvir today, 80% use it at the much smaller dose of 100 mg, which until recently cost $1.75 a day.


Abbott currently has another formulation of Norvir in development that wouldn't require refrigeration and would allow patients to take in tablet form -- changes that could help patients better adhere to the drug regimen. Once the new formulation comes to the market, possibly in 2005, the company says the price will be close to Norvir's new price today.

Abbott acknowledges its move has set off a storm of protest. "It's a decision that we did not take lightly, which is why we reached out to [AIDS groups] so proactively," Ms. Brotz said.

"They've got a P.R. problem," said Bill Arnold, chairman of the ADAP working group, which helps advocate for more funding to AIDS Drug Assistance Programs. With such a huge increase, "people will be livid about that no matter what."

Write to Vanessa Fuhrmans at [email protected]

Updated December 19, 2003 9:54 a.m.

Abbott hikes HIV drug price
Critics say move will steer patients to new product

Chicago Tribune, December 20, 2003
By Bruce Japsen
Tribune staff reporter

Abbott Laboratories has drawn fire from AIDS activists in the United States for raising the price of its well-known HIV drug by more than 400 percent.

Norvir, one of the earlier treatments for HIV, isn't the top-seller it once was, but it is commonly used to boost the effectiveness of other treatments used in so-called AIDS cocktails, which have been hailed in fighting the deadly disease.

Abbott has raised the wholesale price of Norvir to $8.57 a day, or $257.10 a month, from $1.75 a day, or $52.50 for a 30-day supply, company records show.

The spike has rekindled a heated debate over drug pricing policies and could jeopardize Abbott's otherwise good image in the AIDS community.

The North Chicago-based drug giant has long been among the leaders in providing low-cost AIDS medicines to African countries and a supporter of the HIV research and medical community.

"In the good, the bad and the ugly of the pharmaceutical industry when it comes to HIV treatment, I would say that, overall, according to many measures, Abbott is the good," said Michael Weinstein, president of the Los Angeles-based AIDS Healthcare Foundation. "They have been generous in supporting efforts in the developing world, and they have been
cooperative in providing discounts. This is uncharacteristic."

With various combinations of treatments already costing up to $1,600 a month, AIDS activists believe Abbott could be encouraging cost-conscious health insurers to force patients to pick Kaletra, Abbott's next-generation AIDS drug.

Kaletra costs about $18.78 a day, or $563.40 a month, the company said. It doesn't need a boost from other drugs to be effective because it includes Norvir as an ingredient, but AIDS activists say Kaletra might not work for all patients.

"This is purely a marketing ploy to push for a larger market share for Kaletra by driving providers and patients to this cheaper Abbott combination therapy," Weinstein said. "The HIV community as a whole should unite and speak out against Abbott's baldfaced greed."

Abbott said its price increase for Norvir is long overdue after years of being priced well below rivals. Norvir, which came on the market in 1996, was one of the first protease inhibitors.

Market share for Norvir slides

Over time, though, Norvir lost market share, as did a lot of the other early AIDS treatments because some patients developed a resistance to them. Abbott scientists developed Kaletra as a replacement for Norvir, and the newer drug became the nation's top-selling protease inhibitor because of its effectiveness.

Since its launch in 2000, Kaletra has surpassed original projections and is expected to generate more than $700 million in worldwide sales this year.

At its peak, Norvir generated about $250 million in annual sales, but last year's revenues were about half that.

Price freeze in place for some

Abbott does not plan to revisit its decision. Furthermore, Abbott and even some AIDS activists admit most patients won't have to pay the huge increase because the company has frozen the price charged to community health centers and government insurers through 2005.

"We didn't take this decision lightly, which is why we froze the price of Norvir to AIDS drug assistance programs through March of 2005 and expanded our patient assistance program to ensure patients who can't afford it continue to have access," Abbott spokeswoman Melissa Brotz said.

"The value of Norvir in HIV treatment has increased dramatically over the last several years, and the new price of Norvir continues to represent a small fraction of the overall cost of an antiviral regimen," she said. "We continue to invest in HIV research both in Norvir and Kaletra and with a third-generation protease inhibitor currently in pre-clinical research."

Today, Norvir is largely prescribed by doctors as a boost to Kaletra rivals such as Bristol-Myers Squibb Co.'s Reyataz, a drug that came on the market this summer. Bristol would not comment about Abbott's move.

Cost might prompt switch

A higher cost for Norvir might force patients to switch to Kaletra, which may not work as well for them or could force them to lose access to medicines altogether, depending on what insurers do, doctors say.

The concern is real, analysts say, because Reyataz costs $22.08 a day, or $662.40 a month, and it was priced higher than Kaletra before Abbott raised the price of Norvir.

Abbott, however, thinks health plans have historically given doctors more latitude when it comes to prescribing HIV drugs that can mean life or death, rather than allergy or heartburn medications considered routine maintenance drugs with ample competition.

Still, health insurance companies increasingly look at ways to restrict access to more expensive treatment regimens, especially given that overall health-care premiums are rising rapidly.

"This much higher cost will likely raise insurance premium payments and increase the amount of individuals' co-payments for
[Norvir]--co-payments that most people with HIV/AIDS can ill afford," Drs. Paul Volberding and Daniel Kuritzkes, members of the board of the HIV Medical Association, said in a letter to Abbott.

ATAC Drug Development Committee Letter to Abbott, December 22, 2003

To: [email protected]
Subject: Norvir
From: [email protected]
Date: Mon, 22 Dec 2003 09:27:42 EST

December 20, 2003

Mr. Miles White
Chief Executive Officer
Abbott Laboratories
100 Abbott Park Rd.
Abbott Park, Illinois 60064-3500


Dear Mr. White:

A recent action by your company has shaken the HIV/AIDS community to its very core, threatening to transform and erode a productive relationship that has evolved between us in combatting this epidemic. The AIDS Treatment Activists Coalition (ATAC) is a national coalition of AIDS activists, many living with HIV/AIDS, working together to end the AIDS epidemic by advancing research on HIV/AIDS. We recently became aware of a price increase of greater than 400% for Abbott's protease inhibitor ritonavir (Norvir). This price increase may well have been the result of overly eager marketing and sales personnel seeing and seizing an opportunity without considering the absolutely appalling effects this move would have on public perception and community/consumer relations.

As you know, Norvir was granted accelerated approval by the U.S. Food and Drug Administration, based on its encouraging performance in clinical trials evaluating its effects on both surrogate and clinical markers. When used at the approved therapeutic dose (600 mg BID), it is associated with significant toxicities and side effects that render it intolerable for many HIV-positive individuals. However, the drug has enjoyed continued and growing use, albeit at smaller doses, as a pharmacokinetic (PK) booster for other, more tolerable protease inhibitors by inhibiting the CYP3A4 hepatic enzymes, which metabolize other drugs. In fact, Norvir-boosted protease inhibitor therapy has created a novel therapeutic approach for achieving more potent antiretroviral efficacy, especially in patients with fewer treatment options, such as "salvage" therapy patients who harbor resistance to several or many HIV drugs. Consider the example of an investigational protease inhibitor tipranavir being developed by Boehringer Ingelheim, which has effectiveness against resistant virus but which will also require boosting with Norvir of up to 400 mg.

Surprisingly, the price of another Abbott drug, Kaletra (itself a Norvir-boosted protease inhibitor) has stayed the same, providing an unquestionable economic advantage to choosing Kaletra over other boosted protease inhibitor regimens (such as the recently approved drugs Reyataz and Lexiva), which may now increase in price by as much as double. The price of boosted tipranavir, if approved, would now be around the price of Fuzeon, an entry inhibitor and the most expensive antiretroviral drug ever developed (around $20,000/year). Does this seem like a rational direction for protease inhibitor-based therapy?

Obviously, this Norvir price increase has implications for salvage therapy research because potential therapies that require boosting with Norvir may be abandoned. Instead of being grateful that Norvir still has therapeutic application and will enjoy continued sales, Abbott has apparently made an ultimatum that therapeutic options for salvage patients or even those who just need more potent therapy (arguably any patient with HIV) will cost, and cost dearly. Unless, of course, doctors and patients choose Kaletra, which as mentioned above, has not increased in price and will be cheaper than other boosted options.
Unfortunately, one drug regimen does not fit all and many patients can benefit virologically or metabolically from drugs other than Kaletra.

We appreciate the need to remain profitable, especially in uncertain economic times, but this price increase goes far beyond what is reasonable or necessary. No degree of research and development justifies this type of increase for this type of drug. We understand Abbott's preemptive move to ease restrictions on its Patient Assistance Program for Norvir. We know that prices for AIDS Drug Assistance Programs (ADAP) will not be affected until renegotiation in 2005. However, we cannot accept this unprecedented opportunism in the face of dwindling resources and growing HIV infections, both domestically and worldwide. What Abbott has done will affect healthcare resource allocations (public and private), drug research and development, and patient care and well-being for decades to come.

Abbott has just changed the landscape of HIV/AIDS for the worse-is this what it wants to be known for? ATAC urges Abbott to reconsider its recent actions and to rejoin the battle against HIV/AIDS by advancing research and therapeutics until this scourge against humanity is conquered. Further, we challenge you to roll back the price of Norvir. Abbott has obviously regained its development costs many times over with this drug, which received full approval on the basis of a minimal development package and without an Expanded Access Program.

We believe that it is in the overall best interests of your company to reconsider this shameful and destructive path. We look forward to learning that you have reversed this inhumane decision as soon as possible. Thank you for your immediate attention to this matter.


Very truly yours,


Lynda Dee & Matt Sharp, Co-Chairs
ATAC, Drug Development Committee

POSITIVE VOICE ALERT

December 23, 2003

National Association of People with AIDS (NAPWA)

www.napwa.org
[email protected]
202.898.0414

CALL ABBOTT LABORATORIES CEO MILES WHITE AT (847) 937-6100

Abbott increased its price of Norvir (ritonavir) by more than 400 percent, and activists around the country have called for a phone zap beginning RIGHT NOW. Abbott just increased the wholesale price for a month's supply of Norvir from $54 to $265. Pick up your telephone and let Abbott CEO Miles White know what you think.

Background

Although Norvir has little anti-HIV activity of its own at currently used doses, it has become an essential part of many protease inhibitor combinations because it enhances the effect of other anti-HIV drugs. The new pricing means that Norvir-boosted drug combinations will become substantially more expensive, spending out scarce ADAP funds faster, putting Medicaid recipients at risk for program cuts and increasing private insurance premiums.

Abbott's price increase seems designed to increase market share of its combination drug Kaletra, which includes Norvir. Abbott has not increased the price of Kaletra, even though it contains Norvir. The more than 400 percent price increase will serve to increase the price differential between Kaletra and other combinations. For example, Abbott's move results in a the combination Bristol-Myers Squibb's Reyataz plus Norvir becoming much more expensive than Kaletra.

For much more information, go to the AIDS Treatment Activists Coalition at www.atac-usa.org and click on "Abbott Ritonavir Price Hike Materials."

This is a Zap

Targeted phone and fax zaps historically have been a successful direct action strategy to mobilize thousands of people with the use of modern technology. Zaps have been successful in AIDS actions to get the message across quickly and effectively, jamming up corporate phone and fax line and spreading the word to thousands of people.

A zap works best if you call multiple times and forward this alert to your friends and colleagues and ask them to do the same.

Call Abbott Laboratories today at (847) 937-6100 and ask for CEO Miles White; you'll be connected with assistants in his office. Tell them what you think about a 400-plus percent price increase. Tell them the price increase will double the cost of some protease inhibitor-based therapies.
Tell them you don't believe they need the money for product research. Tell them people are talking about a boycott of all Abbott products until this
price increase is rescinded. Tell them whatever you want, just keep them onthe phone as long as you can stand. Then hang up and call again.

If you have a fax machine, print out some of the materials from the ATAC website and fax them to the attention of CEO Miles White at (847) 938-6277. The longer the better.

Please forward this message to all of your friends and colleagues. A zap needs large numbers of calls to be effective. Please make your first call RIGHT NOW.

GENERIC MEDICINE SUPPLIER REQUESTS SECRETARY TOMMY THOMPSON TO TAKE ACTION TO LOWER PRICE OF TWO BLOCKBUSTER DRUGS

EMBARGOED UNTIL 10:30AM THURSDAY JANUARY 29, 2004

Essential Inventions, Inc., announces that it will request Secretary of Health and Human Services Tommy Thompson to use authority under Bayh-Dole Act to license generic production of two blockbuster drugs funded by federal government; abusive pricing cited as grounds.


PRESS CONFERENCE:
9:30-11:00am
Thursday January 29, 2004
Washington Press Club

SPEAKERS:
James Love, President of Essential Inventions, Inc./ Director Consumer Project on Technology (CPTech)
(202-387-8030; 202-361-3040; [email protected])

Sean Flynn, Senior Attorney, CPTech
(202-387-8030, cell: 202-294-5749; [email protected])

ADD�L CONTACT:
Joy Spencer, [email protected]; 202-387-8030; cell: 703-727-6761

On Thursday January 29, 2004, Essential Medicines, Inc., will file two complaints with Secretary of Health and Human Services Tommy Thompson alleging abusive pricing of government funded medicines by two of the largest pharmaceutical companies in the world.

One complaint will state that Abbott Laboratories has endangered public health and failed to make a government-supported invention available to the public on reasonable terms when it recently increased five-fold the price of the best selling AIDS medicine, Norvir.

A second complaint will state that Pfizer Corp. has failed to make a government-supported invention available to the public on reasonable terms by charging U.S. consumers between two and five times as much as Canadians and Europeans for the best-selling glaucoma treatment, Xalatan.

Each of the two medicines was discovered in the performance of federal research grants, awarded by the National Institutes of Health. The Bayh-Dole Act, passed in 1980, gives the Secretary the authority to �march-in� on each patent and license other producers to supply U.S. consumers where necessary to alleviate health needs or because the patent holder has failed to make the invention available on reasonable terms.

To allay concerns about negative impacts on research and development for new medicines, each complaint will request that Secretary Thompson require that generic producers under the licenses contribute to special funds for new medicine development.


ESSENTIAL MEDICINES

  • Essential Inventions, Inc. is a non-profit corporation organized under the laws of the District of Columbia in January 2004. The Corporation�s Articles state that it was organized to �promote the creation and distribution of essential inventions and other works that support public health, nutrition, learning, and access to information and cultural life.�
  • Essential Inventions, Inc., has suppliers that are ready to manufacture generic versions of Xalatan and Norvir at highly reduced prices to U.S. consumers.


BAYH-DOLE ACT

  • The Bayh-Dole Act (passed in 1980) permits inventors to retain ownership of inventions supported by federal grants, subject to �march-in� rights that can be used to license anyone to use the patent without consent of the patent holder.
  • The government�s march-in rights may be used if the invention is not made �available to the public on reasonable terms� or if �action is necessary to alleviate health or safety needs.�
  • The government has apparently never used its march-in rights for a medicine. Essential Inventions, Inc. will argue that these cases do provide grounds for use of the government�s march-in rights.

LATANOPROST/XALATAN

  • Latanoprost (sold by Pfizer under the trademark Xalatan) was discovered by a scientist at Columbia University working under a grant from the National Eye Institute.
  • Latanopost is the highest selling glaucoma treatment, with sales over $1 billion in 2003.
  • Xalatan is sold in the U.S. (CVS price) for $60 for a 4-6 week supply (active ingredient: 1% of sales price). The U.S. price is generally 2-5 times higher than in Canada or Europe, despite U.S. taxpayers having funded its invention.
  • Extensive information about the development of Latanoprost is provided in an April 23, 2000 article in the New York Times written by Jeff Gerth and Sheryl Gay Stolberg, titled "Drug Companies Profit From Research Supported by Taxpayers." http://www.nytimes.com/library/national/science/health/042300hth-drugs.html


RITONAVIR/NORVIR

  • Ritonavir (sold by Abbott under the trademark Norvir) is a protease inhibitor used to treat HIV/AIDS. Its most common use is as a �booster� to increase the efficacy of other protease inhibitors.
  • Ritonavir was invented with a grant to Abbott from the National Institute on Allergies and Infectious Diseases.
  • Abbott made over $1 billion in ritonavir sales in the first 5 years on the market.
  • In December 2003, Abbott increased the price of ritonavir five-fold. A full treatment dose will now cost over $45,000/year and a 200mg booster will cost nearly $8,000 /year (which must be combined with three or more other HIV drugs).
  • Abbott anticompetitively insulated its own ritonavir boosted product, Kaletra, from the price increase. Kaletra is now the cheapest ritonavir-boosted protease inhibitor on the market.

AIDS drug's high cost spurs doctors' boycott


Boston Globe, March 19, 2004
Stephen Smith, Globe Staff

In an unusually combative display of physician anger, AIDS specialists in Boston and elsewhere across the nation are protesting a drug maker's steep price increase by boycotting that company's medicines, shunning its sales representatives, and severing research relationships.

Organizers say that 250 doctors and other health care workers in the United States are participating in the action that targets Abbott Laboratories, which in December boosted the wholesale price of a month's supply of the AIDS drug Norvir from about $50 for a daily 100-milligram pill to more than $250. The protest includes physicians from some of the best-known HIV practices in the country, including Fenway Community Health Center in Boston and AIDS Healthcare Foundation, based in Los Angeles. Doctors championing the boycott contend that Abbott increased the price of Norvir, among the first members of a class of drugs known as protease inhibitors, in part to persuade doctors to prescribe a newer AIDS pill made by the company. Abbott executives respond that they are attempting to derive a fair return on a medicine originally designed to be taken many times daily but now typically used only once or twice a day to enhance the effectiveness of other companies' drugs.The action comes amid intensifying opposition to high drug prices by patients and insurers and, industry analysts said, could signal a new brand of militancy among doctors who have been loath to use tools of protest more commonly associated with political and social activists. "If this is an effective mechanism, I suspect there's going to be a move of many more physicians across the country to use this kind of mechanism to attempt to control drug prices," said Kenneth Kaitin, director of the Tufts University Center for the Study of Drug Development. "To not carry Abbott drugs and not allow Abbott sales reps in, if that catches on, that's going to send shudders through the industry."

The protest is of sufficient concern to Abbott that the firm sent a vice president from its Illinois headquarters to Boston to meet with Fenway physicians after the protest began.

Dr. Stephen L. Boswell, Fenway's executive director, said he does not begrudge Abbott a reasonable profit. "But this is beyond any reasonable, justifiable increase," he said. "People depend on these drugs for their lives. We're going to object whenever we think what drug companies are doing is unreasonable and not in the best interest of the patients we're caring for." Physicians at Fenway and other clinics involved in the protest are refusing to prescribe Abbott's products whenever possible, so long as equally effective options exist from other companies. The impact, so far, of the drug boycott is unclear, with industry analysts saying that it is too early to assess.

Another part of the protest involves refusing to collaborate with Abbott on studies of new drugs, a decision that could potentially deprive the company of access to thousands of patients for clinical trials. The price increase has not been felt by most patients so far. Those with insurance generally are charged a set copayment, and AIDS patients who are uninsured typically get their medicines through state assistance programs. In some states, though not in Massachusetts, those programs have waiting lists.

Norvir has been on pharmacy shelves since 1996, and its arrival heralded a new era in the treatment of AIDS patients. Until then, AIDS medicines achieved only marginal success in arresting the virus. That changed dramatically with the development of protease inhibitors, with Norvir being the second from that class to become available. The protease drugs proved so effective that, in many AIDS patients, the virus was reduced to undetectable levels.

As originally designed, 12 pills of Norvir were to be taken by patients each day. But at such high dosages, the drug turned out to produce significant side effects, notably nausea and other gastrointestinal problems.

As the drug fell out of favor as a stand-alone treatment, researchers and doctors discovered that it could play a powerful role at a far lower dose in combination with other AIDS medicines. Norvir, it turned out, slowed the body from metabolizing those other drugs, an unexpected bonanza that allowed those drugs to stay in the bloodstream longer, making them more effective. In the language of the drug world, Norvir became a "booster" drug.

"It turned out to be a product that clogged up the molecular drain for lots of other drugs," said Dr. John Leonard, vice president of global pharmaceutical development for Abbott. At its zenith, Norvir produced $250 million in annual sales for Abbott. But as the use of the drug shifted, with patients taking just a pill or two a day, revenue fell sharply. Company figures show that 22,000 US patients now take Norvir.

"For us at Abbott Labs, this product that has become very important for propping up other drugs has declined to one-twelfth of its original dose," Leonard said. "From a revenue standpoint, Norvir dropped to $50 million a year.

"$50 million sounds like a big number but relative to research and development expenses, it is insignificant."

To more accurately reflect the value of Norvir, and to provide the money needed to discover new drugs, Abbott decided on the price increase late last year, Leonard said.

The development of AIDS drugs is among the hottest fields in the pharmaceutical business. The transformation of AIDS from an almost-certain death sentence to a chronic condition created a population of patients who will need expensive drugs for decades.

Competition for their business is intense. Along with the older-generation Norvir, Abbott makes a drug called Kaletra that combines Norvir with another medicine. In effect, Kaletra does in a single pill what Norvir had been doing in tandem with medicines made by Abbott's competitors.

Clinic doctors and attorneys involved with the protest said they believe that Abbott hiked the price on Norvir as a way of steering patients to Kaletra. "They're leveraging their market on Norvir to get a monopoly in the whole protease inhibitor booster market," said Tom Myers, general counsel for AIDS Healthcare Foundation, which has sued Abbott in federal court in Los Angeles, accusing it of antitrust violations.The drug company denies the antitrust allegations, and even as its executives pledged not to bow to pressure to reduce the price of Norvir, they said they have adopted a series of measures to ensure that the Norvir price increase causes as little pain as possible. Among those steps: The company said that it has permanently frozen at the earlier lower price what it charges government programs that provide Norvir to AIDS patients lacking health insurance. Not all AIDS physicians have joined the protest. Leading scientists such as Dr. Calvin Cohen, research director of Community Research Initiative of New England, continue to collaborate with Abbott. Cohen, whose Boston institute studies HIV drugs, said he believes the company will direct any increase in profits to the development of new drugs.

Still, even Cohen acknowledged that cynicism about the price hike is predictable. "There's good reason we should be skeptical of companies pleading poverty," he said. "I think the harder question is how do we tell real dedication from abuse."

Stephen Smith can be reached at [email protected].

 

Price of AIDS Drug Intensifies Debate on Legal Imports

The New York Times, April 14, 2004
By Gardiner Harris

The recent decision by Abbott Laboratories to quintuple the price of its crucial AIDS drug Norvir will be at the center of a federal hearing today in which AIDS groups and consumer advocates plan to argue that the government should begin allowing the import of cheaper drugs.

The hearing, which will be conducted by the Department of Health and Human Services, is a result of last fall's Medicare drug legislation, in which Congress called for a general inquiry into the import question. But the escalating protest over Norvir, whose average annual dosage cost rose to about $7,800 in January from $1,500, has suddenly given the import issue unexpected urgency.

Norvir is a vital ingredient in many of the drug "cocktail" regimens prescribed for tens of thousands of AIDS patients. Abbott, which cannot raise its prices overseas where governments control drug markets, says it has had to raise prices in the United States to continue financing its research into H.I.V. and other diseases.

Norvir will also be the focus of a hearing that has yet to be scheduled. At that session, the National Institutes of Health will hear arguments over whether federal health authorities should take the unusual step of allowing generic versions of Norvir years before Abbott's patents expire.

In the cases of drugs that were developed with federal money � as

Norvir was � the government has long held the right to demand "reasonable" prices, but has never done so.

"The taxpayers already paid for this invention, so if anything it should be cheaper in the United States," said James Love, director of the Consumer Project on Technology, a group that pushes for lower drug prices.

Mr. Love plans to testify at today's hearing, as do a number of consumer advocates and members of AIDS groups who have protested Abbott's pricing of Norvir.

With total sales of more than $1 billion since its introduction in 1996, Norvir long ago became profitable for Abbott. But with the recent price increase, the thousands of Americans who use Norvir now pay 10 times what the price is in Europe, where drug prices are regulated under national health care plans. An annual Norvir dosage in Belgium, for example, costs less than $720 a year.

Abbott explains its pricing in this country by saying that patients are using smaller doses of Norvir than originally expected, and so the price increase is intended to recoup those losses. Because drug prices are regulated abroad, but are not in this country, American consumers often end up in effect subsidizing overseas patients.

"To continue the work in H.I.V. and other therapeutic areas, we decided the appropriate thing to do to resource our program was to make up our losses with the price increase," said Dr. John Leonard, an Abbott vice president in charge of drug development.

Support for legalizing drug imports is building in Congress. Last Thursday, Senator Charles E. Grassley, the Iowa Republican who is the chairman of the Senate Finance Committee, introduced legislation that would gradually legalize drug imports from Canada, Australia and Europe.

More bills are expected. Senator John Kerry, the Massachusetts Democrat and the party's presumptive presidential nominee, has announced his support for import legislation � an issue the Democrats hope to exploit in the presidential campaign.

Drug makers fiercely oppose all efforts to legalize drug imports. They argue that bringing in foreign drugs � even when made in the companies' own factories � would effectively import foreign price controls, while reducing profits so much that companies would be unable to continue much of their research efforts.

Federal drug officials, meanwhile, have argued that with imported drugs they cannot protect consumers from dangerous counterfeits that have none of the safeguards that cover drugs approved for sale in the United States.

But import advocates say that legalizing drug imports is the only way to make medicines affordable.

All sides have something to say about Norvir, which has quite suddenly become a touchstone in these swirling debates.

"Norvir is sort of a nexus of all the bad practices that all the drug companies use," said Senator Charles E. Schumer, Democrat of New York. "Abbott should understand that what they're doing invites scrutiny and change."

In 1996, Norvir became the second marketed protease inhibitor, a class of compounds crucial to most AIDS drug regimens. The drug's introduction followed an eight-year research effort at Abbott that began with a grant from the National Institutes of Health, according to John Erickson, the former chief of Abbott's AIDS drug research program.

"The grant was critical in allowing us to make the rapid progress that we made," said Dr. Erickson, who is now president of Sequoia Pharmaceuticals in Gaithersburg, Md.

Researchers soon discovered that Norvir, in small doses, had a unique ability to enhance the effectiveness of nearly all protease inhibitors. So even as other companies introduced newer drugs with fewer side effects than Norvir, the older drug became widely used as an adjunct.

Matt Sharp, an AIDS patient in Chicago, takes Norvir in relatively high doses along with an experimental drug from Boehringer Ingelheim. Because he is participating in a clinical trial, his medicine is free. But once the trial ends, Mr. Sharp said that he worried about how he would pay for his medicines.

Many AIDS groups have for years resisted criticizing drug makers' pricing decisions because of their intense interest in encouraging more discoveries. "Our lives depend on future research," said Lei Chou, the director of the Access Project, an AIDS information clearinghouse in New York City.

But Abbott's surprise decision regarding Norvir, which it announced in December, led to cries of outrage from AIDS groups across the country, Mr. Chou said.

Cesar Portillo, a spokesman for the AIDS Healthcare Foundation, the largest nonprofit provider of H.I.V./AIDS medical care in the country, said that Abbott's decision would result in even more patients having to join waiting lists for care.

"To take a drug that was approved in the mid-1990's and increase its price by 400 percent to meet some marketing strategy is outrageous," Mr. Portillo said.

An Abbott spokeswoman noted that the company had not raised the price it charges publicly financed AIDS assistance programs. But Lynda Dee, a member of the Maryland AIDS Drug Assistance Program advisory committee, said that many assistance programs not only provide drugs directly to low-income patients, but they reimburse drug co-payments to patients with private insurance. As Norvir's price rises, those co-payments will probably go up, too, she said.

"Nobody's saying they shouldn't have a reasonable profit, but to raise a drug's price like this seven years after they've already made a fortune is unconscionable," Ms. Dee said. "Nothing has united the AIDS community like this in years."

Some physicians who treat patients with H.I.V. have banded together to urge their colleagues to avoid Abbott medicines when possible. "If there is a choice in medicines, we are urging doctors not to choose Abbott drugs," said Howard Grossman, an internist in New York City who is leading the boycott effort. "In H.I.V., unfortunately, Abbott has a monopoly. But in other areas, it doesn't."

That Norvir was discovered with public funds only fuels the debate. Mr. Love has petitioned the National Institutes of Health to take advantage of the fine print included in grant bequests that allows the federal government to insist upon "reasonable" prices for discoveries made with federal money. These provisions have rarely been invoked by federal health authorities, who fear any effort on their part to control drug prices would lead drug companies to abandon collaborations with federal health agencies.

Six members of the House, most of them political liberals including the Democrats Sherrod Brown of Ohio and Henry A. Waxman of California, recently signed a letter to Tommy G. Thompson, the secretary of health and human services, asking him to support the petition.

Yesterday, John Burklow, a spokesman for N.I.H., said that the agency decided "to provide a venue for public input on this issue," although the timing and format of that input is still being discussed.

Alan Holmer, president of the Pharmaceutical Research and Manufacturers of America, the drug industry's trade association, said that neither legalized drug imports nor government price controls would help AIDS patients.

"The cost of AIDS medicines today is what funds the research for the better treatments and cures for tomorrow," Mr. Holmer said. "It's true that other developed countries are free-riding on American research and we need to address that, particularly in trade agreements."

Today's meeting will be conducted between 9 a.m. and 5 p.m. in the Natcher Auditorium at the National Institutes of Health in Bethesda, Md.

AIDS-drug price hike spurs suit
S.F. MAN SUES AFTER ABBOTT RAISES NORVIR PRICE FIVEFOLD

Mercury News, April 20, 2004
By Lisa M. Krieger

In the latest salvo in the war against climbing drug prices, a class-action lawsuit filed Monday in San Francisco alleges Abbott Laboratories took advantage of a monopoly to overcharge thousands of AIDS patients for the drug Norvir.

A 50-year-old San Francisco man, identified only as John Doe, ``can no longer afford the treatment he needs to stay alive,'' said attorney Sharon Maier of law firm Berman DeValerio. ``It's life or death for patients like him.''

In December, the company boosted the wholesale price of a month's supply of the drug from about $50 for a daily 100-milligram pill to more than $250.

The action came amid growing opposition to high drug prices by all patients.

``It's become a rallying cry over drug pricing,'' said Martin Delaney of the AIDS advocacy group Project Inform of San Francisco. ``In the long haul, it creates anti-competitive pressure and continues the process of prices going up and up and up.''

The drug company denies the antitrust allegations.

``The lawsuit is completely without merit,'' said spokeswoman Jennifer Smother of the Illinois company. ``Abbott will defend against the allegations and continue working to deliver cost-effective medicines for people with HIV.''

The company says it raised the price to more accurately reflect the value of the drug and to produce funds needed for greater research into new products. Other AIDS drugs are more expensive than Norvir, it said.

Norvir, trade name for the drug ritonavir, plays a powerful role in combination with non-Abbott AIDS medicines, allowing them to stay in the bloodstream longer, making them more effective.

The attorneys charge that Abbott increased the price on Norvir as a way of directing patients to a newer single-agent Abbott drug, called Kaletra.

By raising the price of Norvir, Abbott added thousands of dollars a year to the cost of its competitors' drug regimens, which need Norvir to work best.

Abbott did not raise the price of Kaletra -- so by comparison, the single-agent Kaletra costs less than the combinations with Norvir.

``It is one thing for a pharmaceutical company to make money, but Abbott's unjustified price increase has taken unfair advantage of the very people it should be trying to help,'' said Joseph J. Tabacco Jr., the Berman DeValerio attorney overseeing the case.

Norvir has been sold since 1996 and the company has recouped costs associated with developing the drug, the attorneys say.

The lawsuit follows on the heels of another suit filed against Abbott this month. In that case, the AIDS Healthcare Foundation accused the company of false advertising for saying that state programs would not be affected by the price increase.

Last month, AIDS specialists around the nation protested the Norvir price increase by boycotting the company's medicines, refusing to prescribe Abbott's products whenever possible.

And in a hearing before the National Institutes of Health later this year, the federal government will hear arguments over whether it should take the unusual step of allowing generic versions of Norvir -- years before the drug's patent expires.


--------------------------------------------------------------------------------
Contact Lisa M. Krieger at [email protected] or (408) 920-5565.

PRESS RELEASE (04/21/04):

AIDS researchers to Abbott: Norvir price increase cannot be tolerated

Physicians and researchers from the HIV Outpatient Study (HOPS), a diverse multi-center national research collaborative, voiced their opposition to Abbott Laboratories increase in the price of Norvir, in an open petition to Abbott CEO Miles White and vice-president, John Leonard.

The HOPS investigators agreed that the Novir price increase was unprecedented, unethical and threatens access to care across the United States. In the letter, the investigators state that Abbott's pledge to freeze the price of Novir to publicly-funded drug programs failed to address the full impact of the policy, calling the Novir price increase highly injurious to the US HIV treatment and research community.

In previous statements, Abbott has characterized the physicians who oppose the price increase as an insignificant minority. Dr. Frank Palella of Northwestern University, Chicago, countered this belief and stated, "As primary care providers for a large and demographically diverse group of HIV-infected Americans, we feel compelled to speak out on their behalf. It is unconscionable that the dramatic and unjustified increase in Norvir pricing go unprotested by the HIV caregiving community. Let us think about the possible implications of the measure that Abbott Labs has taken. Not only does this abrupt cost escalation comprise a potential barrier to vital drug access for a group of individuals who, as a group, tend to be resource-poor, it also sets an ominous precedent. For the sake of those who depend upon us and who often cannot speak for themselves let our unified message be clear: This cannot be tolerated."

The HOPS investigators called on Abbott executives to strongly reconsider the Norvir price increase and to begin productive discussions with both patient and medical communities about HIV drug pricing.

- - - - - - - - - - - - - - - - - - - - - - -

21 Apr 04

HOPS Investigator Statement Regarding NORVIR Price Increase:


We the undersigned members of the HIV Outpatient Study (HOPS) group affirm that Abbott Laboratories recent increase in the price of ritonavir (NORVIR) is:

  • Unprecedented in the history of the pharmaceutical industry
  • Unethical
  • Threatens patient access to care
  • Highly injurious to the US HIV treatment and research community, despite pledges to freeze the NOVIR price to the AIDS Drug Assistance Program

We ask Miles White, CEO and John Leonard, Vice-President of Abbott Laboratories to:

Strongly reconsider the price increase of NOVIR
Enter substantive multilateral discussions with community and professional leaders regarding pricing

Signed:

Jack Fuhrer, MD SUNY-Stony Brook, New York
Kenneth Greenberg, DO Rose Medical Center, University of Colorado
John Hammer, MD Rose Medical Center, University of Colorado
Scott Holmberg, MD Centers for Disease Control and Prevention, Atlanta
Joseph Marzouk, MD Oakland, California
Anne Moorman, RN Centers for Disease Control and Prevention, Atlanta
Richard Novak, MD University of Illinois
Frank Palella, MD Northwestern University, Illinois
Ellen Tedaldi, MD Temple University, Pennsylvania
Jonathon Uy, MD University of Illinois
Douglas Ward, MD Washington DC
Bienvenido Yangco, MD Tampa, Florida
Benjamin Young, MD PhD Rose Medical Center, University of Colorado

Copied as fair use.

AIDS drug price hike prompts calls for intervention

Nature 429, 6 (May 6, 2004); doi:10.1038/429006b
By Erika Check

[WASHINGTON] The National Institutes of Health (NIH) has been asked to step in and halt the spiralling cost of AIDS medications in the United States.

Under a 1980 technology-transfer law, the biomedical research agency can arrange for the generic production of pharmaceuticals whose invention was based on NIH-funded research, if the existing manufacturer will not provide the treatment on "reasonable terms".

In January, Essential Inventions, a non-profit group based in Washington DC, asked the NIH to invoke these 'march-in' rights with regard to the AIDS drug Norvir, made by Abbott Laboratories of Abbott Park, Illinois. Last December, Abbott raised the US price of Norvir treatment from $1.71 to $8.57 per day.

The NIH will discuss the request at a public hearing at its headquarters in Bethesda, Maryland, on 25 May. Abbott says the price rise is necessary because the drug is used in low doses, resulting in lower sales.

The request's supporters include Sherrod Brown (Democrat, Ohio), the senior minority member of the House of Representatives subcommittee, which oversees the NIH. "When a company raises the price of an essential medicine by 400%, it gets anybody's attention," Brown says. Taxpayers pay for biomedical research, he says, "but we never invoke the mechanism that would bring prices down for the public".

The price increase angered AIDS activists because Norvir boosts other AIDS drugs called protease inhibitors � so all patients taking these are affected. The issue also coincides with a national argument over drug pricing in the run-up to November's elections.

That environment could make it hard for the NIH and its parent agency, the health department, to turn down the request. Health secretary Tommy Thompson "would have to say yes, it is reasonable for an invention to be ten times more expensive here than in other countries, even if US taxpayers funded it", says James Love, president of Essential Inventions.

Abbott says the price increase will not affect uninsured patients, who get the drug free, or others who get it under government programmes.

The company's supporters say that the Bayh�Dole Act, which contains the march-in clause, was not meant to control drug prices. Joseph Allen, president of the National Technology Transfer Center in Wheeling, West Virginia, and a former Senate staff member who worked on the act, says the phrase "reasonable terms" was not supposed to embrace price increases.

Love agrees that the question of what constitutes "reasonable terms" will be crucial to the outcome of the request. But he argues that Abbott is trying to quash competition by charging more to patients who use Norvir to boost other protease inhibitors, rather than using Abbott's own treatments, which incorporate the drug. "This is designed to prevent people from buying non-Abbott protease inhibitors," he says. "If this doesn't trigger the march-in, nothing does."

Abbott Laboratories Faces Heat Over Raising Price of AIDS Drug


Wall Street Journal, May 13, 2004

Leila Abboud
Staff Reporter

Abbott Laboratories is facing mounting pressure from activists, members of Congress and the federal government over its nearly fivefold price increase on its AIDS drug Norvir.

The National Institutes of Health will hold a public meeting in Washington May 25 to consider whether the federal government should exercise its rights, under a little-known law, to issue a license allowing cheaper, generic copies of Norvir to be made before the drug's patents expire.

On Tuesday, eight Democratic senators wrote a letter to the head of the NIH asking that an official from the Federal Trade Commission speak at the meeting about competitive issues raised by the price increase. The FTC declined to comment.

In December, Abbott Labs, based in North Chicago, Ill., raised the wholesale price for a month's worth of Norvir to $265 from $54.

Essential Inventions, the consumer advocacy group that requested the NIH meeting, argues that Norvir was developed with support from taxpayer funds and now is being sold at an unreasonable price. The group is urging the federal government to use its authority under the Bayh-Dole Act to allow others to make Norvir at lower cost, something that has never been done under the law.

Norvir is a protease inhibitor that hasn't been a lucrative seller for Abbott but is widely used in small doses to boost the potency of some AIDS combination-drug therapies. The price increase, Abbott Laboratories says, adjusts Norvir's cost to better reflect the drug's importance and value in treating HIV therapy. Jeffrey Leiden, the president of Abbott's pharmaceutical-products group, says Norvir is still the cheapest protease inhibitor.

The December price increase touched off protest from AIDS activists and physician groups who see it as a threat to patients' health. Activists protested at the company's offices and annual meeting, and filed civil lawsuits in state and federal court. Three state attorneys general are investigating, and the FTC received a complaint alleging that the price increase was anticompetitive.

Abbott has maintained the price increase was justified and said steps were being taken to make sure patients were still able to get the drug.

The central issue to be considered by the federal government is: Does the Norvir price increase represent an "unreasonable" use of the patent that limits public access to the drug? Abbott's Dr. Leiden says the move "in no way" reduced access to Norvir. "We took extraordinary measures to make sure that not a single patient was deprived of the drug," he said. The company says it has frozen the lower price for public programs that pay for AIDS drugs for low-income people, hasn't changed prices for Medicaid, and has made it easier for those without insurance to get Norvir free of charge.

Write to Leila Abboud at [email protected].

Group Says U.S. Should Claim AIDS Drug Patents

Washington Post, May 26, 2004

David Brown
Staff Writer

A Washington-based nonprofit company yesterday asked the federal government to claim control of patents covering an important AIDS drug on the grounds that the medicine was invented with the help of taxpayer-funded research and a recent steep increase in its price is gouging the public.

The rare request calls for a novel application of the 24-year-old law that governs much of the "technology transfer" of medical discoveries from the government to private industry. It also is the latest skirmish in the ongoing war in the United States over the price of patented pharmaceuticals, and of life-saving AIDS drugs in particular.

"This is a case of unmitigated corporate greed at a time of unprecedented concern about drug prices," said Benjamin Young, an AIDS physician from Denver who spoke in support of the Essential Inventions request that Health and Human Services Secretary Tommy G. Thompson stake a government claim to six of Abbott Laboratories' patents for the drug ritonavir, sold as Norvir. The National Institutes of Health in 1988 provided a $3.5 million grant to Abbott, the country's 11th largest pharmaceutical company with annual sales of more than $12 billion. The purpose was to help the company create a research team to try to develop drugs that inhibited a key enzyme, called protease, the virus needs to replicate. That family of drugs, when used in combination with other antiretroviral medicines, revolutionized AIDS treatment and dramatically cut mortality from the disease.

Although the grant did not lead directly to Norvir, the team eventually developed that drug, and Abbott spent many millions of dollars of its own money testing it. In 1996, it was the second protease inhibitor to win federal approval.

Taken at its original dose of 1,200 milligrams a day, Norvir effectively controlled the AIDS virus, but it caused many side effects and required a patient to take 12 pills a day. However, it turned out that at doses as low as 100 milligrams, Norvir made other protease inhibitors far more effective, allowing them to be taken less frequently and at lower doses. Norvir does this by greatly slowing down the body's ability to burn off the other drugs. Virtually all of the protease inhibitors now in use are "boosted" with Norvir. The best-selling protease inhibitor in the country is actually a two-substance pill made by Abbott and sold as Kaletra. It contains a protease drug called lopinavir, and a low dose of Norvir.

To capitalize on Norvir's new use and increasing importance, Abbott in December increased the price of a 100-milligram capsule from $1.71 to $8.75. This had the effect of raising the price of boosted protease-inhibitor combinations�in many cases, very steeply.

For example, the annual wholesale price of the Merck drug Crixivan (indinavir) boosted with Norvir went from $5,996 to $12,254 a year. Abbott, however, didn't raise the price of Kaletra�a decision that overnight made its combination drug a bargain. In addition, the new price applied only in the United States. A one-month supply of Norvir in countries such as Australia and Canada�where long-term, high-volume contracts drive prices down�costs less than 10 percent of what it now does in the United States.

The move�which Abbott calls "re-pricing," rather than a price increase�drew immediate criticism from many physicians and AIDS activists even though the company took several steps to shield some Norvir users from the higher costs.

Abbott froze the drug's price at the old level for the federal Medicaid program and the AIDS Drug Assistance Programs run by each state. Together, those programs provide medicines to about half the people infected with human immunodeficiency virus (HIV) in the United States. It also removed the income ceiling for people seeking Norvir through the company's drug charity program. This meant that private pharmaceutical benefit plans and hospitals were the main payers of the higher price.

Essential Inventions is asking Thompson to invoke the "march-in" provisions of the Bayh-Dole Act of 1980. That act allows universities and companies to patent discoveries made in part by research funded by government grants. Many experts believe it helped ignite the explosion of the biotechnology industry in the United States.

Under Bayh-Dole, the government can claim the patents if companies do not pursue useful applications of them or try to bring products to market on "reasonable terms."

In a meeting before officials of NIH's Office of Technology Transfer yesterday, James Love of Essential Inventions argued that Norvir's price increase violates the "reasonable terms" clause of the law.

But many experts, including one of the law's sponsors, former senator Birch Bayh (D-Ind.), said Love was misreading the act's purpose. The "march-in" provision was meant to give government a recourse if companies holding the patents bottled them up. It was not meant to provide leverage over a product's ultimate price, they said.

Price of AIDS drug challenged

Boston Globe, May 27, 2004

Associated Press, Globe Staff

In the latest skirmish in an intensifying battle over the price of an AIDS drug, patient advocates appealed to federal regulators this week to force a major drug company to roll back a substantial price increase.

The National Institutes of Health held a hearing Tuesday in Bethesda, Md., on whether it should compel Abbott Laboratories to drop the price of Norvir, which the company boosted by 400 percent last December. The groups seeking the price decrease argued that a little-noticed law gives the NIH the power to force a price reduction because Abbott had used federal dollars to help develop the drug.

The hearing was held amid an ongoing protest of the price increase by several hundred doctors, including physicians at the Fenway Community Health Center in Boston.

The protest has resulted in physicians boycotting Abbott's drugs, shunning its sales representatives, and severing research relationships.

Abbott executives responded that they are attempting to earn a fair return on a medicine originally designed to be taken many times daily but now typically used only once or twice a day to enhance the effectiveness of other companies' drugs.

As part of their petition, the patient advocates have asked the NIH to allow other companies to make and sell Norvir in an effort to reduce its cost.

In rare cases, the 1980 Bayh-Dole Act lets the government step in and grant licenses for other companies to make the products it helped finance. If the government should do that with Norvir, it would be the first time that had been done with a privately patented drug.

James Love -- president of Essential Innovations Inc., a nonprofit group in Washington, D.C. -- charged that the cost increase is an abuse of pricing practices. Robert Huff, of Gay Men's Health Crisis in New York, contended that because Norvir is used as a booster with many other AIDS drugs, Abbott raised the price in an effort to increase the cost of using other firms' drugs.

The price increase ''will inhibit innovation, restrict research, limit medical options, and hurt people with HIV," Huff said.

Dr. Jeffrey M. Leiden, president of the Pharmaceutical Products Group at Abbott, told the meeting at the NIH that despite the 400 percent increase in December, from $1.71 per day to $8.57 per day, Norvir remains one of the least expensive AIDS drugs.

The company needs to earn back the approximately $300 million it spent developing Norvir, he said. NIH provided a basic research grant for the drug of about $3.5 million.

Shares of Illinois-based Abbott rose $1.07 to $40.62 on the New York Stock Exchange Tuesday.

Ted Poehler of Johns Hopkins University, representing the American Association of Universities, said that releasing Norvir to other manufacturers would introduce an element of uncertainty among researchers that could discourage development of new drugs.

Former Indiana Senator Birch Bayh, who coauthored the law that would permit the government action, said his intent was not to have the government set prices. His aim, Bayh said, had been to prevent a company from licensing a product and then holding off development of it to protect another product already on sale.

Mark L. Rohrbaugh, director of the NIH Office of Technology Transfer, and his deputy, Bonny Harbinger, will report on the meeting to NIH director Elias Zerhouni, who will make the final decision.

Stephen Smith of the Globe staff contributed to this report.

MCC Condemns Abbott Labs Stance On HIV Meds

A Public Statement on Behalf of the 43,000 Members and Adherents of Metropolitan Community Churches

The 300 congregations of Metropolitan Community Churches join in the condemnation of Abbott Laboratories recent 400% price hike in the protease inhibitor, Norvir.

The lives of tens of thousands of people with HIV and AIDS depend upon access to this medication, and these price increases by Abbott Laboratories are unconscionable. Abbott's actions have increased the cost of a single bottle of Norvir medication from $250 (US) to almost $1200 (US).

At a time when HIV infection rates are on the rise among young people, women, and people of color, Abbott has adopted a strategy that will deny life-saving medication to those who need it most.

Metropolitan Community Churches has a keen interest in Abbott Laboratories actions. Since the beginning of the AIDS pandemic, more than 6000 MCC members and worshipers have died of AIDS related complications. Our churches and our members stand in solidarity with those who are harmed and whose lives are threatened by Abbott's corporate greed.

MCC churches reaffirm our unwavering belief that access to health care and life-saving medications is not optional � they are the basic human rights of all people.

On behalf of Metropolitan Community Churches, we extend our support, encouragement and endorsement to those who will stand in vigil and protest at the Abbott Laboratories Offices, and encourage all people of goodwill to participate in these public actions.

/signed/

Kerry Lobel
MCC Executive Director


For Additional Information, Contact:
Jim Birkitt, Director of Communications
MCC Communications Department
8704 Santa Monica Boulevard, Second Floor
West Hollywood, CA 90069
Tel. (310) 360-8640, Ext. 226 or 228
E-Mail: [email protected]

 

Aetna sues Abbott over AIDS drug price hike

Reuters


CHICAGO, May 26 (Reuters) - Health insurer Aetna Inc. (nyse: AET - news - people) has filed a lawsuit against Abbott Laboratories Inc. (nyse: ABT - news - people) for raising the price of its AIDS drug, Norvir, by 400 percent, an Aetna lawyer said on Wednesday.

Aetna, whose suit seeks class-action status, is the first health insurer to step into the fray over the price hike, the companies said. Abbott enraged AIDS activists and some physicians in December when it raised the price of a common dose of the drug to $8.57 from $1.71.

Abbott said the price change was justified to bring its price in line with its rivals and necessary so that the company can recoup its investment to develop new drugs.

The lawsuit, filed on Tuesday in federal court for the Northern District of California in San Francisco, alleges antitrust violations and seeks an unspecified amount of damages from Abbott, according to Aetna attorney Joseph Tabacco.

An Abbott spokeswoman said she could not comment on the suit directly because she had not seen it yet.

The suit comes on the heels of a National Institutes of Health hearing on Tuesday which considered invoking a 1980 law to grant licenses for cheaper, generic versions of Norvir years before the patent expires.

Consumer groups requested the hearing, and argue that because government seed money helped develop the drug in its early stages, the law gives the federal government the authority to step in. (with reporting by Lisa Richwine in Washington)

The Case of the Mysterious 48-Hour Lawsuit

Brenda Sandburg, The Recorder (via Law.com)


Two days after Aetna Inc. filed an antitrust class action against Abbott Laboratories for hiking the price of one of its AIDS drugs, the insurance company backed down.

Aetna wouldn't say Thursday why it opted to drop the suit, but the decision apparently took its attorneys by surprise. Earlier in the day, Aetna attorney Joseph Tabacco Jr., a partner at Berman DeValerio Pease Tabacco Burt & Pucillo, said a recent 478 percent increase in the price of Norvir hurt both the people who need the drug and the insurance companies that pay for it.

A few hours later, Aetna announced it was voluntarily dismissing the suit without prejudice. "Aetna intends to discuss with Abbott the basis for its repricing action," the company said in a statement.

Tabacco said he could not comment on the decision beyond Aetna's press release.

Abbott increased the price of Norvir in December, eight years after it went on the market. The move outraged consumer and AIDS organizations, which have lobbied Congress and the government to force Abbott to roll back the price. Aetna's suit brought the insurance industry into the fray�at least momentarily.

In its complaint, filed in San Francisco federal court Tuesday, Aetna claimed Abbott had violated antitrust laws by abusing its monopoly power to hike the price of Norvir.

Norvir is a component of virtually every protease inhibitor, a class of drugs that blocks the enzyme necessary for HIV reproduction. Norvir increases the effectiveness of these drugs. Aetna said in its complaint that while Abbott's competitors have had to increase the price of their protease inhibitors, Abbott has kept the cost of its own PI, Kaletra, constant.

"Abbott is trying to use its monopoly to keep out competitors," Tabacco said. Without its monopoly, "it couldn't make the price stick."

Although Aetna has left the ring, Tabacco is still pursuing the pharmaceutical giant. He represents consumers in a separate class action against Abbott. That pending complaint, which he said is essentially identical, was filed in San Francisco federal court in April.

The two suits contend that Abbott boosted the price of Norvir to make up for losing market share to new PIs.

"Barely five weeks after the release of GlaxoSmithKline's Lexiva, and more than seven years after Norvir's introduction into the market, Abbott abruptly announced that it was raising the wholesale price of Norvir from $205.74 to $1,028.71 for 120 100-mg. capsules," the Aetna complaint says. "In a coup de grace against competitors' PIs, Abbott did not raise the price of Norvir used in its own Kaletra. As a result, Kaletra became the least expensive boosted regimen on the market."

Abbott President and Chief Operating Officer Jeffrey Leiden said at a public meeting Tuesday that Kaletra has not benefited from the increased price of Norvir.

Norvir "remains the lowest priced drug in its class at its most common dose and remains the lowest cost component of a typical HIV regimen," said Leiden at a meeting of the National Institutes of Health.

The nonprofit group Essential Inventions asked the Department of Health and Human Services to require Abbott to license Norvir to its competitors on "reasonable terms." The group argues that the government has the right to do so under the 1980 Bayh-Dole Act, since NIH provided Abbott $3.4 million in funding for its early research on Norvir.

Prescription Access Litigation, a coalition of consumer groups, also filed a class action against Abbott in Illinois state court this month.

NIH Weighs Demand to Force Sharing of AIDS Drug Patents

Science Magazine, June 4, 2004

David Malakoff

The government's interpretation of a 25-year-old law giving federally funded researchers the right to patent and commercialize their discoveries was put to the test last week. AIDS activists want the National Institutes of Health (NIH) to use its legal muscle to rein in the spiraling domestic cost of an important AIDS drug. But major research universities and former government officials who wrote the law say that if the activists got their way, it would damage efforts to commercialize academic discoveries.

At the heart of the conflict are two provisions of the 1980 Bayh-Dole Act. One says that government-funded inventions should be "available to the public on reasonable terms." The other gives funding agencies the right to "march in" and force a patent holder to license its inventions to other companies if the existing license holder isn't taking "reasonable" steps to develop the invention or if change is needed to "alleviate health or safety needs."

But balancing health and safety needs with the larger goal of turning research into products can get tricky. "Is it fair for U.S. taxpayers who paid for the development of these drugs to pay five to 10 times more than [patients] in other countries?" asks James Love of Essential Inventions, a Washington, D.C.-based advocacy group. He says NIH should act to "protect the notion that [the law] is a fair bargain [and not] an unmitigated giveaway." Opponents agree--to a point. "While I'm sympathetic to the effort, ... twisting intellectual-property law to control drug prices would be intolerable," said Norman Latker, a retired NIH general counsel.

The battle was joined in January when Essential Inventions asked NIH to march in on four patents held by Abbott Laboratories of Chicago, Illinois. It claimed that the firm was profiteering on a widely used AIDS drug called Norvir (www.essentialinventions.org). A 25 May hearing at NIH heard comments on the petition. Norvir is used to boost the effectiveness of other anti-HIV medications. It was developed in the early 1990s by Abbott researchers supported by a 5-year, $3.5 million NIH grant awarded in 1988, and the government has a stake in four of the six patents covering the drug. Norvir has been on the market since 1996, but last year Abbott increased U.S. retail prices for some formulations by up to 400%.

Health care activists want the government to force Abbott to roll back prices. The Essential Inventions petition, for instance, asks NIH to require the company to license the four patents to competing manufacturers and to compel all producers to deposit small royalty payments into an R&D fund. "This is precisely the type of abusive pricing problem that Bayh-Dole's march-in clauses were meant to remedy," says Sean Flynn, a lawyer for the group, arguing that the law's "reasonable terms" provision applies to drug pricing.

That view, however, was disputed by a string of witnesses--including the law's co-author. "We never intended for [Bayh-Dole] to be used to control prices. We stayed away from that on purpose," said former Indiana senator Birch Bayh (D), who sponsored the legislation with former Kansas senator Bob Dole (R). Essential Inventions "flagrantly misrepresent[ed]" the law's legislative history and intent in its petition, he added.

Two university groups--the Association of American Universities (AAU) and the Council on Governmental Relations (COGR)--agree with Bayh and predicted that companies would refuse to invest in taxpayer-funded inventions if NIH granted the petition. "It's a misapplication of the statute ... [that] would likely have serious unintended and adverse consequences," said AAU representative Theodore Poehler, vice provost for research at Johns Hopkins University in Baltimore, Maryland. "It would be a major deterrent to licensing inventions ... if potential licensees believe the government has authority" to control prices, added COGR representative Andrew Neighbour, a law professor at the University of California, Los Angeles.

NIH officials gave little hint after the hearing of how they will rule. Mark Rohrbaugh, head of the agency's technology-transfer office, said he plans to "move expeditiously" to make a recommendation to NIH Director Elias Zerhouni, who will make the final decision. Although many legal observers predict that NIH will reject the petition, Love is hoping for a boost from election-year politics. "Drug pricing is a big political issue" that President George W. Bush won't want to hand to his opponent, he says. Love has also asked NIH to exercise march-in rights on another drug, Pfizer's Xalatan glaucoma treatment, which he says costs up to five times more in the United States than abroad.

Abbott Settles Norvir Suit

Chicago Tribune (via Bloomberg News), July 17, 2004


On Friday, Abbott Laboratories agreed to fund HIV/AIDS testing, prevention and treatment programs for 10,000 people in the United States and Africa in order to settle two lawsuits over the pricing of its AIDS drug Norvir. Company spokesperson Jennifer Smoter did not reveal the financial terms of the settlement but said it does not alter Norvir's price and is not expected to affect corporate profits.

In December, when it quadrupled the price of Norvir, Abbott said it needed the additional money to fund research. The AIDS Healthcare Foundation (AHF), the largest US AIDS organization, sued Abbott, accusing it of taking unfair advantage of people who need Norvir to live. Norvir sales were about $100 million last year.

"Both parties realized there were more pressing issues facing people with HIV, and that's why we decided to work together," Smoter said.

AHF noted in a statement that the settlement does not resolve the debate over AIDS drug pricing. "Where we're at now is in the best interest of the people we serve and the people we will serve," said AHF general counsel Tom Myers. "We don't agree with the pricing, but we're not going to take any more steps against it."

The consumer coalition Prescription Access Litigation has also sued Abbott over the issue; its case is not affected by the current settlement. In court papers, Abbott is seeking the dismissal of that suit, Smoter said.

AHF has another lawsuit pending against GlaxoSmithKline PLC, which it alleges misused the US patent system to get a monopoly on AZT.

Bitter Pill for HIV Patients

Los Angeles Times (editorial), August 10, 2004

You'd think an industry accused of gouging the sick and dying while raking in billions in profit would start developing a better public relations strategy. Alas, pharmaceutical companies remain adept at ruining their own good names.

In December, Illinois-based Abbott Laboratories bumped up the price of the usual dose of Norvir, a crucial HIV/AIDS drug, from $1.71 to $8.57 a day. An advocacy group's effort to revoke Abbott's patent on Norvir died last week when the federal government refused to intervene. Legally, the government's decision made sense: Abbott isn't breaking any patent laws by quintupling Norvir's price. But to AIDS patients who don't give a rip about legal niceties, Abbott has some explaining to do.

Abbott points to slumping sales for Norvir, which reached the market in 1996. Originally, the drug was given to AIDS patients by itself, in larger doses that brought in more revenue. But as similar drugs emerged, Norvir's role changed: Doctors found it to be most effective when prescribed in much lower doses with similar drugs. Consequently, Norvir sales slumped.

It wasn't an event that threatened the company's bottom line. In July, Abbott reported a second-quarter profit of $634 million, more than double its profit of a year ago.

To add insult to injury, only American AIDS patients pay the Norvir price increase, leaving the drug markedly cheaper in other countries. Abbott has set up programs it claims will effectively make the price increase a nonissue. The uninsured and patients covered by government insurance programs won't face any Norvir price increases, and a small percentage will even get the drug free, says a spokeswoman.

You'd think the administrative costs of dealing with those who will now apply for aid would cancel the profit. Another big chunk of customers will no doubt be looking for a Canadian pharmacy. Too bad companies that insure their employees can't do that.

Marcia Angel, a former editor of the New England Journal of Medicine, stated in Monday's Times that the 10 largest U.S. pharmaceutical companies garnered $35.9 billion in profit in 2002 and spent just 14% of their revenue on developing new drugs. A move like Abbott's, no matter what socially conscious smoke screens it puts up, only furthers patients' fears that drug companies will squeeze Americans for revenue they can't get elsewhere and will aim at people who need a drug to stay alive.

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ATAC is a national coalition of people living with HIV/AIDS and advocates working together to end the AIDS epidemic by improving HIV research and treatment access.
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