Wall Street Journal Examines Reason Abbott Increased Price of Antiretroviral Norvir

Previously undisclosed documents and e-mails reviewed by the Wall Street Journal indicate that executives at Abbott Laboratories attempted to "diminish the attraction" of the company's antiretroviral drug Norvir by increasing the price of the drug, the Journal reports. Norvir is used in combination therapies that include drugs manufactured by pharmaceutical companies other than Abbott, according to the Journal. According to the documents and e-mails, Abbott in the fall of 2003 "grew worried about new competition to" its antiretroviral Kaletra, and the company's executives began discussing ways to decrease the popularity of Norvir with the "goal of forcing" HIV-positive people "to drop the rival drugs and turn to Kaletra," the Journal reports (Carreyou, Wall Street Journal, 1/3). In December 2003, Abbott quadrupled the per-patient wholesale price of Norvir, which is known generically as ritonavir. Norvir is used primarily as a booster for other protease inhibitors, such as Bristol-Myers Squibb's Reyataz and Merck's Crixivan (Kaiser Daily HIV/AIDS Report, 8/5/04). Abbott exempted Medicaid, Medicare and state AIDS Drug Assistance Programs from the price increase, and the company announced that it would expand its patient assistance program. Institutions, such as state prisons, were not exempt from the price increase. The cost of Norvir increased from $51.30 for 30 100mg capsules to $257.10 for 30 100mg capsules, or by $5,000 more annually, which made Kaletra -- costing $7,000 annually -- the less expensive option for HIV-positive people residing in the U.S., according to the Journal. The increase "created a huge price discrepancy" between Kaletra and rival drugs, according to David Wohl, an associate professor at the University of North Carolina who also works with HIV-positive prison inmates. Abbott has said that it did not increase the price of Norvir to promote Kaletra and that the increase did not affect other drug companies. According to Abbott, the price increase was intended to better show Norvir's medical value, the Journal reports.

Reaction, Legal Actions
According to the Journal, the price increase "triggered an uproar" among some HIV/AIDS advocates and physicians. After a May 2004 hearing to consider authorization of a cheaper generic version of Norvir before its patent expired, NIH stated that it did not have the authority to determine if a drug's price was too high and ruled against a generic. The public "outcry faded" over time and "[p]rivate health insurers took a bigger blow but had little leverage, because they could hardly deny patients a lifesaving drug," according to the Journal. However, Abbott settled a lawsuit over Norvir's pricing filed by the AIDS Healthcare Foundation and agreed to support programs at the foundation, the Journal reports. Illinois Attorney General Lisa Madigan (D) has been investigating Norvir's price increase for three years and has said that it might violate the state's consumer fraud law. In addition, a lawsuit filed in U.S. district court in Oakland, Calif., by two HIV-positive people and the Service Employees International Union's Health and Welfare Fund is scheduled to go to trial in early 2008, the Journal reports (Wall Street Journal, 1/3).

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