[Ip-health] BNA: Retailers Sue Abbott Over Norvir Price Jump, Claim Firm Committed Antitrust Violations

[Mike Palmedo]

Retailers Sue Abbott Over Norvir Price Jump, Claim Firm Committed
Antitrust Violations

BNA Pharmaceutical Law & Industry Report
Volume 5 Number 44
Friday, November 9, 2007

Drugstores and pharmaceutical distributors Oct. 26 sued Abbott
Laboratories, accusing the drug firm of increasing its price for its
AIDS drug Norvir (ritonavir) in violation of federal antitrust laws
(Safeway Inc. v. Abbott Laboratories, N.D. Cal., No. 07-cv-05470-EMC,
filed 10/26/07).

In a complaint filed in the U.S. District Court for the Northern
District of California, retailers Safeway Inc., Walgreen Co., The Kroger
Co., New Albertson's Inc. and distributor American Sales Co. asked for
triple damages and permanent injunctive relief against Abbott, arguing
that Abbott misused its patent rights to the protease inhibitor (PI)
Norvir to increase by 400 percent the prices it charged competitors for
Norvir.

The plaintiffs, purchasers and distributors of Norvir, who also are
assignees of the claims of drug wholesalers, McKesson Corp. and Cardinal
Health Inc., claim that they are injured by Abbott's conduct because
they have to pay supracompetitive prices for the relevant products due
to Abbott's allegedly monopolistic conduct. Specifically, plaintiffs
accuse Abbott of monopolization and attempting to monopolize markets
under the Sherman Act.

Abbott introduced Norvir as a stand-alone PI in 1996. Following the
introduction of Norvir, it was discovered that Norvir could be used in
conjunction with another PI to boost the antiviral properties of the
other PI. Abbott introduced such a booster drug called Kaletra in 2000,
using Norvir with the PI lopinavir. Kaletra was effective and widely
used, but it had significant side effects for some patients. Studies
showed that other PIs when boosted by Norvir would be as effective as
Kaletra and more convenient. When these new PIs were introduced,
Kaletra's market share fell more than Abbott expected.

Specifically, the plaintiffs claim that Abbott violated the Sherman Act
by improperly leveraging its patent monopoly in the market for Norvir to
lift the market share of Abbott's Kaletra. The complaint claims that
Abbott charged an unreasonably low price for Kaletra, while charging its
competitors an unduly high price for stand-alone Norvir, with the
ultimate goal of knocking its competitors' boosted protease inhibitors
out of the market in order to then raise the price for Kaletra.

The complaint was filed by William Francis Murphy, Barbara Lynne Harris
Chiang, Edward Eldon Hartley, and Scott E. Perwin Dillingham & Murphy,
LLP, San Francisco.

A copy of the complaint is available at
http://op.bna.com/hl.nsf/r?Open=deln-78kunx on the Web.

--
Mike Palmedo
Research Coordinator
Program on Information Justice and Intellectual Property
American University, Washington College of Law
4910 Massachutsetts Ave., NW Washington, DC 20016
T - 202-274-4442 | F 202-274-0659
mpalmedo@wcl.american.edu