Pharmacies sue Abbott over AIDS drug price
Four large pharmacy chains and a drug wholesaler sued Abbott Laboratories for allegedly abusing its monopoly in the AIDS market by quintupling the price of one of its drugs in 2003.
The antitrust suit, filed by Safeway, Walgreen, The Kroger Co., Supervalu's New Albertson's, and American Sales Co., contends Abbott "unlawfully leveraged its monopoly position as the sole provider of Norvir to disadvantage its competitors and restrict competition," according to the Oct. 26 filing in the U.S. District Court for the Northern District of California.
Libertyville Township-based Abbott in December 2003 raised Norvir's U.S. wholesale price to $257.10 from $51.30 for 30 100-milligram capsules, sparking outrage from AIDS activists and prompting a lawsuit by two AIDS patients and the Service Employees International Union Health and Welfare Fund. That suit, now a class-action, is scheduled to go on trial in June.
"We're screaming out because it sets a horrible precedent. AIDS drugs are terribly expensive anyway, and a 400 percent increase was just astounding," said Matt Sharp, an activist with the AIDS Treatment Activists Coalition, a New York City-based group that works to advance research on HIV and AIDS.
Norvir is in a class of drugs called protease inhibitors which slow the spread of HIV by blocking protease enzymes. Protease inhibitors are one of three drugs used in many antiretroviral therapy combinations, usually referred to as "cocktails."
Side effects prevent Norvir from being used as a stand-alone drug, but in small doses it boosts the anti-viral effects of other protease inhibitors, including those made by other companies.
In 2000, Abbott introduced Kaletra, an AIDS drug that includes Norvir. The Norvir price hike made Kaletra a cheaper option by as much as several thousand dollars a year.
Year-to-date global sales of Kaletra have reached $958 million, while sales of Norvir are estimated at $225 million.
According to the lawsuit: "Abbott has raised the price of Norvir by 400 percent in December 2003, and has maintained that price to the present day, but only when Norvir is used to boost a non-Abbott (protease inhibitor). Norvir is sold at a much lower price when used as one component of Abbott's own boosted (protease inhibitor), Kaletra."
Abbott has said it increased the Norvir price to better reflect its value on the market, not to boost Kaletra sales. The company exempted Medicare, Medicaid and state AIDS drug-assistance programs from the Norvir price increase, which it said shifted the burden of the increase to private insurers, not patients.
Abbott spokesman Scott Stoffel said the lawsuit is without merit.
"The repricing of Norvir was legal and captured the value of this important medicine," Stoffel said Tuesday.
Carol Hively, spokeswomen for Deerfield-based Walgreen, declined to comment via e-mail. Representatives from Safeway, Kroger, New Albertson's and American Sales did not return calls for comment.
Illinois Attorney General Lisa Madigan launched an investigation into Abbott's price increase several years ago to determine if the action violates the state's consumer fraud laws. A spokeswoman at her office on Tuesday said that investigation is ongoing.