The scrap over Abbott Laboratories' HIV-drug pricing has gone to a jury. In federal court in Oakland, CA, GlaxoSmithKline and Abbott have been trading arguments about a price hike on Norvir, an AIDS drug commonly used in combination pills made by other companies--including GSK. The 400 percent increase in Norvir price, instituted in 2003, has prompted previous court battles with patient groups and retail pharmacies.
The British drugmaker accuses Abbott of anti-competitive behavior, saying that the higher Norvir price forced it to hike prices on its combination drug, making it less competitive with Abbott's combo med Kaletra. GSK lawyers said its combo treatment, Lexiva, sold half as much as expected after the price hike, leading to lost profits of $570 million. The company is seeking damages of about three times that figure, Bloomberg says.
Abbott, however, says that the price increase wasn't an anti-competitive move, but a necessary business strategy. Attorney James Hurst told jurors that Abbott raised Norvir's price to backstop its sales, as it suddenly faced competition from a Bristol-Myers Squibb drug, Reyataz. AIDS-drug cocktails--including that product--require only a one-tablet Norvir boost, rather than the four tablets older drugs did.
Earlier this week, Abbott settled a suit filed by drug retailers over the Norvir and Kaletra pricing issue. The amount of that settlement wasn't disclosed, but the retailers had asked for $3 billion in damages, triple the amount in alleged overcharges.
A previous appeals court decision found that Abbott's pricing wasn't illegal because Kaletra wasn't priced below cost, Bloomberg points out. In 2008, Abbott settled a lawsuit with patient groups for $10 million.