May 12, 2008
Boston, MA -- In an ongoing nationwide class action lawsuit against Abbott Laboratories, Inc. (NYSE: ABT), the Court in the case recently ordered the unsealing of documents regarding Abbott's four-hundred percent price increase of the HIV/AIDS drug Norvir®.
Abbott fought to keep these documents sealed, arguing that they contain 'business strategies' important to Abbott's competitive position in the HIV pharmaceutical market. But Judge Claudia Wilken ruled that because the price increase related to the "allegations that are central to Plaintiff's anti-trust claims" the documents should be unsealed. (Order, p. 3).
The ongoing lawsuit, brought by SEIU Health and Welfare Fund and others, alleges that Abbott violated federal antitrust laws when it increased the price of Norvir (ritonavir), a drug used in combination with other protease inhibitors (PIs), by 400%. It did not raise the price of Kaletra, another Abbott pill which combines Norvir and Abbott's own protease inhibitor, lopinavir. Plaintiffs allege that this price increase was engineered in order to force patients and insurers to switch from using Norvir (which is taken with several other competitors' PI drugs) to Kaletra.
Kaletra is one of Abbott's best-selling drugs, grossing $400 million in 2003, $682 to 900 million in 2004, and $1.14 billion in 2006. Norvir has become a key weapon in the fight against the progression of HIV in patients, as it "boosts" the effectiveness of protease inhibitors.
The unsealed documents revealed how Abbott Labs dismissed patient considerations from their pricing considerations.
One document shows that Abbott considered making Norvir available at its original price only in a foul-tasting liquid form that Abbott executives acknowledged tastes like "someone else's vomit." Abbott also considered completely halting Norvir production, while continuing to make only Kaletra. This would have forced millions of patients to switch to Kaletra, despite the fact that it would have exposed them to Kaletra's side effects, and would have deprived them of vitally important treatment options to preserve for future stages of the disease.
Other documents show that Abbott executives planned to justify a price increase by stating that it was "no longer feasible for Abbott to continue manufacturing Norvir capsules" at their original price. Abbott executive Jesus Leal noted that this plan and rationale had a significant weakness -- "exposure on price if forced to open books."
"We're appalled by the callous disregard for HIV/AIDS patients that Abbott displayed in the documents they tried to keep secret," said Steve Abrecht, Executive Director of the SEIU Health and Welfare Fund. "We plan to continue pushing the class action lawsuit against Abbott forward, to hold them accountable for this unconscionable and cynical price gouging."
"These documents show that Abbott put profits ahead of the needs of seriously ill HIV/AIDS patients in quintupling Norvir's price" said Alex Sugerman-Brozan, director of Prescription Access Litigation, a national coalition of which plaintiff SEIU Health and Welfare Fund is a member. "This information would never have come to light if not for this lawsuit, demonstrating that litigation is sometimes the only means to uncover such schemes and hold drug companies accountable."
One of the unsealed documents contained a chart summarizing a proposed slide presentation discussing the price increase. One column in that chart described a slide titled "Public Relations and Activist slide," which tellingly contained nothing but a question mark "(?)", suggesting that Abbott was aware of the outcry that would ensue following the price increase but had no convincing explanation for it.
In the months following Abbott's price hike in December 2003, Abbott was the target of numerous protests and widespread public condemnation, shareholder resolutions, government investigations, physician boycotts, and an unsuccessful petition to the NIH and FDA to force Abbott to permit a generic version of Norvir onto the market. The class action lawsuit is the only significant challenge to the Norvir price increase that is still ongoing.
The class action lawsuit, originally filed in October 2004, has cleared numerous hurdles. The case is scheduled to go to trial in August 2008. The Court has already denied Abbott's motion to dismiss the case and certified the case as a national class action. Abbott's request that the 9th Circuit Court of Appeals review the decision certifying the case as a class action, and Abbott now also faces lawsuits brought by chain pharmacies and GlaxoSmithKline, a competitor in the HIV/AIDS drug market.
On May 1, the Court held a hearing on Abbott's Motion for Summary Judgment. The case is part of In re Abbott Laboratories Norvir Anti-Trust Litigation, 04-CV-1511, U.S. District Court for the Northern District of California. The Judge's ruling, and copies of the unsealed documents can be found at prescriptionaccess.org/lawsuitssettlements/current_lawsuits?id=0022.