[Insofar as GSK’s Lexiva requires boosting with ritonavir, it seems to me that GSK ought to have inked a supply deal for ABT to furnish GSK with ritonavir at an attractive price. Thus, this lawsuit strikes me as sour grapes on GSK’s part. Lexiva, which GSK licensed from VRTX, has been a commercial bust for reasons that have nothing to do with pricing, IMO. (Norvir is ABT’s brand name for ritonavir.)]
›By Pamela MacLean and Karen Gullo Mar 24, 2011 3:31 PM ET
A GlaxoSmithKline Plc (GSK) lawyer told a federal court jury that Abbott Laboratories sought to stifle competition and maintain an illegal monopoly over HIV drugs when it quadrupled the price of its AIDS medicine Norvir in 2003.
Glaxo has argued at a trial in Oakland, California, that the price increase meant that other drugmakers couldn’t compete with Abbott’s Kaletra AIDS medicine, which includes Norvir, a boosting agent for other HIV drugs.
The London-based drugmaker claims it lost an estimated $570 million in profit on sales of its drug Lexiva, which uses Norvir, because it sold at half the rate the company expected.[LMAO—since when is a company’s internal sales expectation a valid yardstock?]Glaxo is seeking damages of about three times its lost profits on Lexiva.
“This was about money for Abbott and they wanted to make sure Kaletra stayed on top,” Brian Hennigan, Glaxo’s lawyer, said today in his closing argument.
Abbott says it increased Norvir’s prices for legitimate business purposes. Even with the higher price, Kaletra lost market share and had only 30 percent of the market for similar drugs, the company has said.
Abbott increased the wholesale price of a Norvir capsule containing 100 milligrams from $1.71 to $8.57, the Abbott Park, Illinois-based company said in court documents.
James Hurst, Abbott’s attorney, told jurors today in his closing that the company raised the price of Norvir “to make more on Norvir” because of the introduction in 2003 of a competing Bristol-Myers Squibb drug, Reyataz, that needed just one Norvir tablet, rather than four.
“That explains the price increase,” he said. “It was a different use, so it needed a different price.”
‘Still the Lowest’
Norvir went from the lowest-priced HIV drug “on the market by far to still the lowest even after the price increase,” he said.
Abbott settled claims by retailers including Rite Aid Corp. (RAD) and Safeway Inc. for an undisclosed amount[these companies settled with ABT midway through the trial], Adelle Infante, a company spokeswoman, said today in an e-mail. The drug retailers and other direct purchasers had also sued Abbott, claiming its conduct drove up prices for medicines that compete with Kaletra.
The drug retailers sought damages equal to triple the $1 billion in alleged overcharges. Terms of the agreement will be made public when they are filed in court, Infante said.
In 2009, a federal appeals court in San Francisco ruled that Abbott’s pricing for the HIV drugs wasn’t unlawful because Kaletra wasn’t priced below its cost. In 2008, Abbott settled a similar antitrust lawsuit filed by patient groups for $10 million.
The case is SmithKline Beecham Corp. v. Abbott Laboratories (ABT), 07-5702, U.S. District Court, Northern District of California (Oakland).‹
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