House Dems scrutinize price tag of AIDS drug

Echoing the party’s pledges to address high drug costs, House Democrats are looking into long-asserted price-gouging allegations surrounding a key drug in the treatment of AIDS.

The Oversight and Government Reform Committee is considering holding hearings to investigate whether pharmaceutical company Abbott Laboratories artificially inflated the price of its AIDS drug, Norvir, in 2003, according to a committee staffer.

The aide confirmed that the panel, chaired by Rep. Henry Waxman (D-Calif.), has been probing the issue during the new legislative session but could not say when hearings would occur if the committee decided to proceed with them.
Melissa Brotz, a spokeswoman for Abbott Laboratories, stated that “we are cooperating with the inquiry.”

Michael Weinstein, president of the AIDS Healthcare Foundation, called the inflated prices of AIDS drugs “the most egregious example of abuse,” citing high costs for drugs like Norvir as a significant reason for why 500,000 Americans infected with HIV go untreated. 

In December of 2003, Abbott Laboratories made the decision to increase the price of Norvir by approximately 500 percent, with the cost of annual dosage reportedly hovering near $8,000. While lawmakers and AIDS advocates argued that Norvir was unreasonably priced considering that the drug was invented and developed through federal funds, Abbott Laboratories countered that the decision was intended to aid the company in continuing its work in HIV medication as well as other areas.

The move triggered a response from GOP lawmakers as six House Republicans sent a letter in April of 2004 to then-Energy and Commerce Committee Chairman Joe Barton (R-Texas) requesting that the committee investigate the matter while dismissing Abbott’s defense. “… (A)ccording to [Abbott Laboratories’] lawyers, Norvir’s manufacturer has already earned enough profit through sales to more than recoup the costs of research and development,” the letter read.
Barton did not conduct any hearings in response to the letter, according to a GOP staffer. Lisa Miller, a staffer with the minority side of the committee, did not respond to requests for comment by press time.

The lawmakers who made the request included Reps. Dan Burton (R-Ind.), Vernon Ehlers (R-Mich.),  and Jo Ann Emerson (R-Mo.), among others.

Norvir is a protease inhibitor (PI), which works to block the protease enzyme that the HIV virus needs in order to infect new cells. The drug has been on the market since 1996 and was initially sold as a stand-alone PI before being marketed as a booster, intended to work in concert with other drugs as part of the AIDS cocktail.

That federal funds were used to develop Norvir was at the crux of a 2004 request by consumer advocacy group Essential Inventions to have the federal government invoke its “march-in” rights to claim title for federally funded inventions in order to grant licenses to other companies, in this case for the creation of generic versions of Norvir. The National Institutes of Health (NIH) would ultimately reject the request, stating that march-in was not warranted and that the Federal Trade Commission was the appropriate agency. Waxman, as well as then-Rep. and current Sen. Sherrod Brown (D-Ohio), called for the Government Accountability Office to investigate the NIH decision that October.

A lawsuit was filed in federal court in 2005 by the Service Employees International Union Health and Welfare Fund, alleging Abbott Laboratories violated federal antitrust laws by increasing Norvir’s price so that two other drugs taken in conjunction with it — Reyatz and Lexiva, made by Bristol-Myers Squibb and GlaxoSmithKline respectively — would become more expensive. This, the lawsuit alleged, would open up the market for a separate PI also produced by Abbott, known as Kaletra.

The case is slated for 2008, according to a report in The Wall Street Journal.

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