Glaxo Sues Abbott Labs
Over AIDS Drug Pricing

By JOHN CARREYROU
November 9, 2007 6:26 p.m.

GlaxoSmithKline PLC joined the growing number of parties suing Abbott Laboratories over its 2003 decision to raise the price of an AIDS drug fivefold.

Four big pharmacy chains and one pharmaceutical wholesaler filed a lawsuit against Abbott last month, alleging that it abused its monopoly in the U.S. market for AIDS drugs with the price hike. Abbott is also being sued by two AIDS patients and the Service Employees International Union Health and Welfare Fund. That suit has class-action status and is scheduled to go to trial in June.

In its complaint filed in U.S. District Court in Oakland, Calif., Glaxo alleges that Abbott "schemed to remove… one of the critical components" of AIDS drug cocktails from the U.S. market by raising the price of its drug, Norvir, by 400%. The move, Glaxo alleges, undercut a Glaxo drug, Lexiva, which is used in cocktails in combination with Norvir. Norvir's U.S. wholesale price rose to $257.10 from $51.30 for 30 100-milligram capsules.

Norvir, which received Food and Drug Administration approval in 1996, is in a class of drugs known as protease inhibitors. Side effects prevented it from being used as a stand-alone drug, but it became widely used in small doses to boost the effectiveness of other protease inhibitors. In 2000, Abbott introduced Kaletra, a pill that includes Norvir.

Abbott's decision to quintuple Norvir's price in the U.S. made Kaletra a cheaper option for American AIDS patients, as it raised the cost of regimens pairing Norvir with rivals' drugs by several thousand dollars a year.

"This frivolous lawsuit is completely without merit," Abbott spokeswoman Melissa Brotz said. 

In January, The Wall Street Journal reported that Abbott discussed two alternatives to a Norvir price increase. One was to sell Norvir only as a liquid, which one Abbott executive said tasted like vomit. That would have discouraged use of Norvir with competitors' drugs, Abbott executives reasoned. Another was to stop selling Norvir altogether. Abbott says it never seriously considered those scenarios. It also says competitors' drugs have since gained market share.

Write to John Carreyrou at john.carreyrou@wsj.com¹