Abbott Defends Norvir Price Hike

Abbott Laboratories defended the recent 400% price increase for its AIDS drug Norvir (ritonavir) before a government panel last week in an effort to forestall the issuance of licenses for generic versions of the drug under the 1980 Bayh-Dole Act.

Essential Inventions, a consumer advocacy group, has petitioned the Department of Health & Human Services to invoke the law, which ensures public access to government-funded inventions. Abbott had received a $3.5 million NIH grant for the development of Norvir. The drug, with 2003 sales of $95 million, is scheduled to come off patent in 2014.

Citing the expense of drug discovery and Norvir’s low cost compared with other treatments, Abbott upped the price of a 100-mg dose from $1.71 per day to $8.57 in December, sparking protest from AIDS activists. Jeffrey M. Leiden, president of Abbott’s pharmaceutical products group, told an NIH committee last week that the price hike does not affect government programs such as Medicaid and that uninsured patients can receive Norvir for free.

Leiden said Bayh-Dole is only applicable to inventions that have not been commercialized, arguing that the law “was never intended to be a mechanism to determine prices.” He noted that the federal grant covered less than 1% of Norvir’s development cost of more than $300 million.

Former senator Birch Bayh, an author of Bayh-Dole, supported Leiden's view before the committee, specifically cautioning against the use of the law to control drug prices.

Essential Inventions founder James Love argued that Abbott is not making Norvir available to the public on “reasonable terms” as required under Bayh-Dole. “The facts in the Abbott case are so extreme that a ‘sky is the limit’ or ‘anything goes’ precedent will have been set,” he said.