[Ip-health] Reuters: FTC Complaint, Abbott

[Sean Flynn]

US probe sought on Abbott AIDS drug price hike
Reuters, 01.29.04, 4:59 PM ET

By Lisa Richwine

WASHINGTON (Reuters) - U.S. activists on Thursday asked antitrust
authorities to investigate whether Abbott Laboratories Inc. raised the
price of an AIDS medicine in order to drive market share to another
Abbott drug.

The nonprofit company Essential Inventions Inc., which is headed by drug
pricing activists, filed a complaint with the Federal Trade Commission
over Abbott's decision to raise the price of the AIDS medicine Norvir by
400 percent.

Norvir, known generically as ritonavir, is a protease inhibitor that
helps suppress the HIV virus that causes AIDS. Norvir is unique in its
class because it can boost the effectiveness of other protease inhibitors.

Abbott makes another medicine, Kaletra, that includes Norvir and another
protease inhibitor.

The complaint to the FTC alleges Abbott's pricing is anti-competitive.
The Norvir price hike likely will steer prescriptions toward Kaletra
because it is cheaper than combining Norvir with other companies'
protease inhibitors, the activists said.

"A main effect of the price increase will be to raise the price of
competing products to shift market share to its combination product
Kaletra," Essential Inventions, which was founded this month by consumer
activist James Love, wrote in its complaint.

"That's simply not the case," Abbott spokeswoman Ann Fahey-Widman said
in an interview. "This action is specific to Norvir. It does not impact
Kaletra."

Abbott raised Norvir's price from $8.57 for 100 milligrams, the most
common daily dose, from $1.71, she said.

"This pricing action supports our ability to continue research and
development," she said.

Also, Norvir had been priced below other protease inhibitors, but "the
use and value of this drug has changed dramatically" in light of its
unique boosting power, she said.

The average price pharmaceutical wholesalers charge for a year's supply
of Kaletra is $8,559, according to the complaint. The other AIDS
regimens that include Norvir cost between $12,254 and $16,933, the
complaint said.

Kaletra is the most commonly prescribed protease inhibitor, the Abbott
spokeswoman said. Others include Merck & Co Inc.'s Crixivan and
Bristol-Myers Squibb's Reyataz.

An FTC spokesman declined to comment.

The legal theory behind the case is a legitimate one, according to one
prominent Washington antitrust attorney. But it also may be a tough case
to bring because the courts traditionally have given companies a lot of
leeway in setting prices.

"It's arguable and it's worth making," this attorney said. "But how the
courts are going to come out, it's not obvious."

(Additional reporting by Peter Kaplan in Washington; Reuters Messaging:
lisa.richwine.reuters.com@reuters.net; +1 202 310-5691))

Copyright 2004, Reuters News Service