[Ip-health] The Hill (March story): House Dems scrutinize price tag of AIDS drug

[Thiru Balasubramaniam]

<SNIP>

That federal funds were used to develop Norvir was at the crux of a
2004 request by consumer advocacy group Essential Inventions to have
the federal government invoke its =93march-in=94 rights to claim title for
federally funded inventions in order to grant licenses to other
companies, in this case for the creation of generic versions of Norvir.
The National Institutes of Health (NIH) would ultimately reject the
request, stating that march-in was not warranted and that the Federal
Trade Commission was the appropriate agency. Waxman, as well as
then-Rep. and current Sen. Sherrod Brown (D-Ohio), called for the
Government Accountability Office to investigate the NIH decision that
Octobe

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http://thehill.com/business--lobby/house-dems-scrutinize-price-tag-of-
aids-drug-2007-03-13.html

House Dems scrutinize price tag of AIDS drug
By David Mikhail
March 14, 2007
Echoing the party=92s pledges to address high drug costs, House Democrats
are looking into long-asserted price-gouging allegations surrounding a
key drug in the treatment of AIDS.

The Oversight and Government Reform Committee is considering holding
hearings to investigate whether pharmaceutical company Abbott
Laboratories artificially inflated the price of its AIDS drug, Norvir,
in 2003, according to a committee staffer.

The aide confirmed that the panel, chaired by Rep. Henry Waxman
(D-Calif.), has been probing the issue during the new legislative
session but could not say when hearings would occur if the committee
decided to proceed with them.

Melissa Brotz, a spokeswoman for Abbott Laboratories, stated that =93we
are cooperating with the inquiry.=94

Michael Weinstein, president of the AIDS Healthcare Foundation, called
the inflated prices of AIDS drugs =93the most egregious example of
abuse,=94 citing high costs for drugs like Norvir as a significant reason
for why 500,000 Americans infected with HIV go untreated.

In December of 2003, Abbott Laboratories made the decision to increase
the price of Norvir by approximately 500 percent, with the cost of
annual dosage reportedly hovering near $8,000. While lawmakers and AIDS
advocates argued that Norvir was unreasonably priced considering that
the drug was invented and developed through federal funds, Abbott
Laboratories countered that the decision was intended to aid the
company in continuing its work in HIV medication as well as other
areas.

The move triggered a response from GOP lawmakers as six House
Republicans sent a letter in April of 2004 to then-Energy and Commerce
Committee Chairman Joe Barton (R-Texas) requesting that the committee
investigate the matter while dismissing Abbott=92s defense. =93=85
(A)ccording to [Abbott Laboratories=92] lawyers, Norvir=92s manufacturer
has already earned enough profit through sales to more than recoup the
costs of research and development,=94 the letter read.

Barton did not conduct any hearings in response to the letter,
according to a GOP staffer. Lisa Miller, a staffer with the minority
side of the committee, did not respond to requests for comment by press
time.

The lawmakers who made the request included Reps. Dan Burton (R-Ind.),
Vernon Ehlers (R-Mich.),  and Jo Ann Emerson (R-Mo.), among others.

Norvir is a protease inhibitor (PI), which works to block the protease
enzyme that the HIV virus needs in order to infect new cells. The drug
has been on the market since 1996 and was initially sold as a
stand-alone PI before being marketed as a booster, intended to work in
concert with other drugs as part of the AIDS cocktail.

That federal funds were used to develop Norvir was at the crux of a
2004 request by consumer advocacy group Essential Inventions to have
the federal government invoke its =93march-in=94 rights to claim title for
federally funded inventions in order to grant licenses to other
companies, in this case for the creation of generic versions of Norvir.
The National Institutes of Health (NIH) would ultimately reject the
request, stating that march-in was not warranted and that the Federal
Trade Commission was the appropriate agency. Waxman, as well as
then-Rep. and current Sen. Sherrod Brown (D-Ohio), called for the
Government Accountability Office to investigate the NIH decision that
October.

A lawsuit was filed in federal court in 2005 by the Service Employees
International Union Health and Welfare Fund, alleging Abbott
Laboratories violated federal antitrust laws by increasing Norvir=92s
price so that two other drugs taken in conjunction with it =97 Reyatz and
Lexiva, made by Bristol-Myers Squibb and GlaxoSmithKline respectively =97
would become more expensive. This, the lawsuit alleged, would open up
the market for a separate PI also produced by Abbott, known as Kaletra.

The case is slated for 2008, according to a report in The Wall Street
Journal.

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Thiru Balasubramaniam
Geneva Representative
Knowledge Ecology International (KEI)
voice +41.22.791.6727
fax +41.22.723.2988
mobile +41 76 508 0997
thiru@keionline.org