Healthy Skepticism Library item: 10791

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Publication type: news

Roehr B.
Abbott sued on ritonavir price increase
Bay Area Reporter 2007 Jun 28
http://www.ebar.com/news/article.php?sec=news&article=1962

Full text:

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.