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Abbott Wins Ruling Tossing AIDS-Drug Norvir Monopoly Claims
 
 
  By Karen Gullo
Last Updated: July 7, 2009 16:33 EDT
 
July 7 (Bloomberg) - Abbott Laboratories federal appeals court ruling dismissing claims that the company maintained a monopoly and overcharged for its HIV medicine Norvir.
 
After Abbott quadrupled prices for the drug in 2003, patients, advocacy groups and drug-benefit providers sued. Claims included the accusation that Abbott tried to create a monopoly for Kaletra, an HIV treatment it makes that contains Norvir, a performance-booster of so-called protease inhibitors. Abbott settled the case last year, agreeing to pay $10 million outright and $17.5 million more if it failed to win the reversal of adverse antitrust rulings. Today's decision by a federal appeals court in San Francisco erased those claims.
 
The company's wholesale and retail pricing for the drugs isn't unlawful simply because it "puts the squeeze on competing producers of protease inhibitors that depend on Norvir for their boosted effectiveness and consumer acceptance," a three-judge panel ruled.
 
"The alleged vice is that Abbott is using its monopoly position in the booster market to raise the price of Norvir while selling its own booster inhibitor at too low a price," the court said. The claim failed because plaintiffs didn't show Kaletra was priced below its cost and "there is a dangerous probability that the defendants will be able to recoup its investment at below-cost prices," the court said.
 
Kaletra logged $1.47 billion in global sales for Abbott last year, according to a Jan. 21 company earnings report.
 
'Significant Victory'
 
"Today's ruling is a significant victory for Abbott," Melissa D. Brotz, an Abbott spokeswoman, said by e-mail.
 
Abbott still faces suits by competitors and drug- purchasers, including GlaxoSmithKline Plc and Rite Aid Corp., over its 2003 decision to lift Norvir prices to $8.57 a pill from $1.71.
 
The company is accused of attempting to create a monopoly for Kaletra, a protease inhibitor, by driving up the cost to competitors of combining Norvir with their medicines.
 
Norvir, first approved in 1996, was originally sold in 1,200-milligram doses as a stand-alone drug, according to Abbott. Company researchers discovered that it was better used at one-twelfth that dose to boost the power of other protease inhibitors.
 
Abbott says it has a lawful monopoly over Norvir as the holder of its patent and the price change was legal and didn't impeded sales or development of competing protease inhibitors.
 
Michael Stocker, a lawyer for the Service Employees International Union Health and Welfare Fund, a union health plan and plaintiff in the lawsuit, said the ruling, while disappointing, doesn't affect the $10 million payment to nonprofit groups benefiting AIDS patients.
 
The case is Doe v. Abbott Laboratories, 08-17699, U.S. Court of Appeals for the Ninth Circuit (San Francisco).
 
A lawyer for the advocacy groups says they're weighing whether to appeal the decision
 
 
 
 
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