E-DRUG: Abbott sued on ritonavir price increase
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http://www.ebar.com/news/article.php?sec=news&article=1962
Bay Area Reporter
June 28, 2007
Abbott sued on ritonavir price increase
by Bob Roehr
The pharmaceutical company Abbott kicked off a storm of protest when it
increased the price of the anti-HIV drug ritonavir (Norvir) by 400
percent in December 2003. Now a federal judge in California has
authorized a class action lawsuit against the company as a violation of
antitrust laws.
The legal wrangling has been going on since 2004 when the lawsuit
initially was filed. Motions to dismiss and appeals have stalled
progress, but the June 11 ruling by federal court Judge Claudia Wilken
represents a major milestone, though the trial itself is not likely to
occur until next spring.
The lead attorney for the plaintiffs, Joseph J. Tabacco Jr., managing
partner of the San Francisco office of Berman DeValerio, accused Abbott
of monopolistic practices and a drug price-fixing scheme to overcharge
thousands of people living with HIV.
He said the lawsuit seeks to roll back the price of the drug retroactive
to the date of the increase in 2003. Persons and health insurers who
have purchased ritonavir would receive a rebate for what they allegedly
were overcharged.
"We believe the damages here are in the several hundreds of millions of
dollars range," Tabacco said.
The plaintiffs are an anonymous John Doe patient and the Service
Employees International Union. One does not have to join the lawsuit at
this time in order to be eligible to benefit from the decision, should
it go against Abbott. At the time a decision is finalized, and it goes
against the company, the judge would establish procedures for notifying
and compensating all those who fall within the class.
Abbott spokesman Scott Stoffel downplayed the importance of the judge's
decision. He called it "a procedural ruling that has no bearing on the
merits of the case." The company believes the charges are without merit.
It has pursued an aggressive legal strategy and is likely to appeal the
certification decision.
Ritonavir was developed as a protease inhibitor but did not work
particularly well. However, in using it in combination therapy, doctors
soon discovered that it improved the effect of other protease inhibitors
by slowing down their clearance by the liver so that more of the drug
stayed in the blood longer.
Second generation protease inhibitors, and some of the integrase
inhibitors still in early development, use small, sub-clinical doses of
ritonavir to "boost" their effect. Ritonavir's role in HIV treatment
grew to be far greater than what the company originally had envisioned.
Abbott claimed that the 400 percent increase in the price of ritonavir,
from $1.71 to $8.57 a day, reflected the increased "value" of the drug,
though it had not conducted clinical trails as part of that effort. But
at the same time, it did not increase the price of Kaletra, its protease
inhibitor lopinavir that is coformulated with a boosting level of ritonavir.
That sparked a protest by hundreds of HIV docs. At a February 2004 news
conference at the retroviral conference in San Francisco, Denver
physician Benjamin Young called Abbott's actions "an unprecedented,
unethical increase ... an issue of freedom of choice for physicians and
patients."
New York physician Howard Grossman was particularly galled by the
increase because it required almost no additional research and "it
requires zero marketing dollars, everyone is selling Norvir for them.
It's pure profit."
But many patients have few treatment options but to use ritonavir as
part of their regimen, and a boycott of other products produced by
Abbott gained little traction.
Very early development of ritonavir had been undertaken with funding
from the National Institutes of Health, which granted patent use to
Abbott. The pricing outcry prompted NIH to launch a highly unusual
investigation as to whether Abbott's price increase violated that patent.
At a public meeting held by NIH in 2004, Bob Huff, of the Gay Men's
Health Crisis in New York City, charged that "the practical and intended
effect [of the price increase] was to position Kaletra in advantage to
its competitors."
The NIH ultimately found that it did not have the authority to revoke
Abbott's patent to ritonavir because of the price increase.
06/28/2007
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Sarah Rimmington
Project Attorney
Essential Action, Access to Medicines Project
Washington, DC
Office: (202) 387-8030 x34
Mobile: (202) 422-2687
www.essentialaction.org/access
srimmington@essentialinformation.org