[Ip-health] Wall Street Journal: Glaxo Sues Abbott Labs Over AIDS Drug Pricing

[Thiru Balasubramaniam]

<SNIP>

In January, The Wall Street Journal reported that Abbott discussed two
alternatives to a Norvir price increase. One was to sell Norvir only
as a liquid, which one Abbott executive said tasted like vomit. That
would have discouraged use of Norvir with competitors' drugs, Abbott
executives reasoned. Another was to stop selling Norvir altogether.
Abbott says it never seriously considered those scenarios. It also
says competitors' drugs have since gained market share.


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http://online.wsj.com/article_print/SB119465013625188488.html

Glaxo Sues Abbott Labs
Over AIDS Drug Pricing
By JOHN CARREYROU
November 9, 2007 6:26 p.m.

GlaxoSmithKline PLC joined the growing number of parties suing Abbott
Laboratories over its 2003 decision to raise the price of an AIDS drug
fivefold.

Four big pharmacy chains and one pharmaceutical wholesaler filed a
lawsuit against Abbott last month, alleging that it abused its
monopoly in the U.S. market for AIDS drugs with the price hike. Abbott
is also being sued by two AIDS patients and the Service Employees
International Union Health and Welfare Fund. That suit has class-
action status and is scheduled to go to trial in June.

In its complaint filed in U.S. District Court in Oakland, Calif.,
Glaxo alleges that Abbott "schemed to remove=85 one of the critical
components" of AIDS drug cocktails from the U.S. market by raising the
price of its drug, Norvir, by 400%. The move, Glaxo alleges, undercut
a Glaxo drug, Lexiva, which is used in cocktails in combination with
Norvir. Norvir's U.S. wholesale price rose to $257.10 from $51.30 for
30 100-milligram capsules.

Norvir, which received Food and Drug Administration approval in 1996,
is in a class of drugs known as protease inhibitors. Side effects
prevented it from being used as a stand-alone drug, but it became
widely used in small doses to boost the effectiveness of other
protease inhibitors. In 2000, Abbott introduced Kaletra, a pill that
includes Norvir.

Abbott's decision to quintuple Norvir's price in the U.S. made Kaletra
a cheaper option for American AIDS patients, as it raised the cost of
regimens pairing Norvir with rivals' drugs by several thousand dollars
a year.

"This frivolous lawsuit is completely without merit," Abbott
spokeswoman Melissa Brotz said.

In January, The Wall Street Journal reported that Abbott discussed two
alternatives to a Norvir price increase. One was to sell Norvir only
as a liquid, which one Abbott executive said tasted like vomit. That
would have discouraged use of Norvir with competitors' drugs, Abbott
executives reasoned. Another was to stop selling Norvir altogether.
Abbott says it never seriously considered those scenarios. It also
says competitors' drugs have since gained market share.

Write to John Carreyrou at john.carreyrou@wsj.com1