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Sacramento Bee

Aetna drops suit on Abbott drug pricing

by Dorsey Griffith, Bee Medical Writer
May 28, 2004

Two days after filing an unprecedented class-action lawsuit against Abbott Laboratories over the increased price of an important AIDS drug, insurance giant Aetna Inc. abruptly dismissed the complaint Thursday.

The lawsuit, which had drawn praise and surprise from consumer groups, was filed in U.S. District Court in San Francisco to challenge Abbott's decision in December to raise the price of the AIDS drug ritonavir, known by its brand name as Norvir, by more than 400 percent.

The suit alleged that the price increase violated state and federal antitrust laws because Norvir is essential to most AIDS therapies. It sought an injunction against Abbott and damages for patients who have had to pay the higher price.

Hartford-based Aetna would not answer questions on its decision, but issued the following statement: "Aetna today agreed to voluntarily dismiss without prejudice its lawsuit against Abbott laboratories. Aetna intends to discuss with Abbott the basis for its repricing action."

Abbott spokeswoman Jennifer Smoter said the drug company had nothing to do with Aetna's decision to drop the suit.

"We were advised today by Aetna they were unilaterally dropping its lawsuit regarding Norvir," she said. "We maintain our repricing decision is appropriate and lawful."

The lawsuit - and its dismissal - were the latest developments in Abbott's controversial drug pricing. Its decision has spurred physician boycotts, consumer lawsuits, state investigations and a consumer petition to the National Institutes of Health to strip Abbott of its patent rights on the drug.

Ritonavir has helped save the lives of hundreds of thousands of people with HIV and AIDS, experts say. The drug is a protease inhibitor, one of a class of drugs that has helped make AIDS more of a chronic disease than a death sentence.

Norvir came on the market in 1996 and was initially sold as a stand-alone medicine. The drug fell out of favor, however, because of toxic side effects. Researchers later discovered that in very small doses the drug boosted the effectiveness of other protease inhibitors and reduced their side effects.

Today, nearly every protease inhibitor requires a dose of Norvir to be effective against HIV, the virus that causes AIDS.

In December, citing the need to generate revenue to develop new drugs and Norvir's increased value against HIV, Abbott announced it was hiking the cost of the drug by about 400 percent. The company, however, did not increase the price of one of its other protease inhibitors, Kaletra, which already contains a small dose of Norvir.

Critics, including Aetna in its lawsuit, have claimed that the company's actions force up the price of every other protease inhibitor because they all require the boost of Norvir. As a result, they say, buyers will be steered to Kaletra, now the least expensive option.

Because of the price hike, the lawsuit argued, the annual cost of Norvir needed per patient to boost other drugs increased by $6,258 per year.

"The brunt of the financial impact of Abbott's anticompetitive acts ... has been borne by insurance companies forced to absorb the full measure of Norvir's... price increase," the lawsuit stated.

Berman, DeValerio, Pease, Tabacco, Burt & Pucillo, the firm that filed the suit in U.S. District Court in San Francisco, had no comment after Aetna decided to dismiss the case. The same law firm has a similar class-action suit pending against Abbott on behalf of consumers.

Jamie Court, president of the Foundation for Taxpayer & Consumer Rights, a Santa Monica consumer group monitoring the situation, said the about-face by Aetna, the largest health insurance company in the country, illustrates the pharmaceutical industry's influence.

"It shows that drug companies have too much power to set prices without scrutiny and that this is not a free market."

Court added that Aetna officials may have been embarrassed by their legal team's decision to file the class-action lawsuit because of prior statements criticizing such consumer remedies.

In a letter written last year, Aetna CEO John W. Roe expressed support for a proposed federal law that would move many class-action lawsuits from state courts into a federal legal system considered more favorable to corporate defendants.
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The Bee's Dorsey Griffith can be reached at (916) 321-1089 or dgriffith@sacbee.com