Suit Over AIDS Drug Price Hike

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CBS
Aetna Inc. has sued pharmaceutical maker Abbott Laboratories Inc., accusing it of seeking a monopoly on AIDS drugs by raising the price of its popular drug Norvir by 400 percent.

In the suit filed in U.S. District Court for the Northern District of California in San Francisco, the Hartford-based health insurer cited Abbott's December decision to raise the wholesale price for 120 100-milligram Norvir capsules from about $206 to $1,028.

Norvir was not a major AIDS drug on its own, but is increasingly used in small doses to boost the potency of some AIDS combination-drug therapies.

"By means of this staggering price hike, Abbott added drastically to the cost of regimens using Norvir to boost competing protease inhibitors," Aetna said in its lawsuit filed Tuesday. Protease inhibitors are drugs that block HIV, the virus that causes AIDS.

Aetna, which is seeking a jury trial, said Abbott's actions have had a "chilling effect" on research by competitors that are developing protease inhibitors.

Jennifer Smoter, a spokeswoman for Abbott, said the lawsuit is without merit and the pricing of Norvir is "entirely lawful." In announcing the higher price, the Abbott Park, Ill.-based company cited the sharp increase in treatment value of Norvir and the costs of improving its formulation.

Patients' advocates have urged the government to intervene. Earlier this week, the National Institutes of Health held hearings on whether to allow other companies to make and sell the drug in an effort to reduce its cost. The government can take such action in rare cases of drugs that were at least partly developed using federal money.

Aetna alleged in its lawsuit that Abbott raised Norvir's price sharply to offset a drop in the market share of a newer Abbott protease inhibitor, Kaletra, to maintain its dominant position in the protein inhibitor market. Unlike Norvir, Kaletra is used alone instead of part of a "cocktail" and is more lucrative.

Abbott said Kaletra's share declined, but still maintains a market share of more than 30 percent. In addition, Kaletra did not benefit from the Norvir pricing, Smoter said.

A spokesman for Aetna declined to comment.