[Ip-health] AP: LA-based AIDS care group sues over huge increase in cost of drug

[Kate Krauss]

LA-based AIDS care group sues over huge increase in cost of drug

JOHN ROGERS, Associated Press Writer     Wednesday, February 11, 2004

(02-11) 15:50 PST LOS ANGELES (AP) --

One of the nation's largest AIDS-care providers is suing pharmaceuticals
giant Abbott Laboratories for raising the price of its drug Norvir nearly
400 percent, claiming the action threatens the lives of people infected with
HIV.

The suit, filed Tuesday in U.S. District Court, accuses the company of
violating federal antitrust laws by abusing its patent on the drug
ritonavir, which is sold under the brand name Norvir.

"Abbott's pricing of ritonavir is unreasonable, anticompetitive and
threatens the health and safety of people with AIDS," according to the
lawsuit filed in U.S. District Court here by the AIDS Healthcare Foundation.
It seeks unspecified damages and a court order setting a price for the drug
that is within "reasonable financial reach of the HIV-infected public."

"Our primary objective is to roll back the price," said Michael Weinstein,
president of AIDS Healthcare Foundation, which operates clinics in
California, Florida, New York, Africa and Central America. He said the
increase threatens to put the drug out of the reach of thousands of poor
people.

Abbott is already under investigation by officials in New York and Illinois
who are trying to determine whether it acted illegally when it raised the
price last December. The North Chicago-based company increased Norvir's
wholesale cost for a 30-day supply to $257.10 from $52.50.

Abbott has denied any wrongdoing and on Wednesday a company spokeswoman
dismissed the suit as "without merit."

"We haven't reviewed the lawsuit. We have, however, reviewed our pricing
policies," said Abbott spokeswoman Ann Fahey-Widman. "Abbott has acted
lawfully. This recent pricing action in no way limits access or choice to
the full range of HIV therapies."

The company had previously said it provided Norvir at a reasonable price for
years while manufacturers of other anti-HIV drugs charged premium prices.

Weinstein said the drug, which has been on the market for eight years, has
already made the company a "king's ransom" and there is no justification for
raising the price now.

The drug, a protease inhibitor, is taken in conjunction with other anti-HIV
drugs, and Weinstein noted that one of those is Kaletra, one of the
company's newer drugs and one with a longer patent life.

The price of Kaletra has not gone up, and Weinstein speculated that was
because Abbott is trying to use its monopoly on Norvir to corner the market
on other protease inhibitors taken with the drug.

"They're trying to push people to use Kaletra and not the other drugs, and
that in our view is a restraint of trade," he said.

Abbott has denied that allegation, which is at the heart of investigations
being conducted by the state attorneys general of New York and Illinois.

Weinstein acknowledged that Abbott's price increase reflects an "overall
trend" in the pharmaceuticals industry to raise the price of lifesaving
anti-AIDS drugs.

"But this is a high watermark in terms of the amount of the increase," he
said.

In July 2002, the Aids Healthcare Foundation sued another huge
pharmaceuticals company, GlaxoSmithKline, accusing it of price gouging on
three of its drugs and of abusing the U.S. patent system.

State Attorney General Bill Lockyer filed a friend of the court brief
Wednesday supporting that suit, which seeks $66 million in damages and a
court order invalidating the company's patent on AZT.

"The issues raised in this case are serious and go to the heart of what our
antitrust laws are all about: protecting consumers from artificially high
prices and deflated competition," Lockyer said.

GlaxoSmithKline has said it patents are valid and its pricing policies are
fair.