House Committee Considers Holding Hearings To Investigate Pricing of Abbott’s Antiretroviral Norvir
The House Oversight and Government Reform Committee is considering holding hearings to investigate the pricing of Abbott Laboratories' antiretroviral drug Norvir, an unnamed committee staffer said recently, The Hill reports. The staffer said that the committee -- which is chaired by Rep. Henry Waxman (D-Calif.) -- has examined the issue during the current legislative session but that he could not say when the hearings would occur if the committee votes to proceed with them. Abbott spokesperson Melissa Brotz said that the company is "cooperating with the inquiry" (Mikhail, The Hill, 3/14). In December 2003, Abbott quadrupled the per-patient wholesale price of Norvir, which is known generically as ritonavir. Norvir is used primarily as a booster for other protease inhibitors, such as Bristol-Myers Squibb's Reyataz and Merck's Crixivan. The cost of Norvir increased from $51.30 for 30 100mg capsules to $257.10 for 30 100mg capsules, or by $5,000 more annually (Kaiser Daily HIV/AIDS Report, 1/3). Some lawmakers and HIV/AIDS advocates said that the price increase was unreasonable because Norvir was developed using federal funds, according to The Hill. Abbott said that the decision to increase the drug's price was intended to help the drugmaker continue its work in HIV/AIDS medications and other areas. Six House members -- including Reps. Dan Burton (R-Ind.), Vernon Ehlers (R-Mich.) and Jo Ann Emerson (R-Mo.) -- in April 2004 sent a letter to then House Committee on Energy and Commerce Chair Joe Barton (R-Tex.) asking that the committee investigate the issue. According to an unnamed staffer, Barton did not conduct any hearings in response to the letter.
The federal funds used to develop Norvir were "at the crux" of a request brought by the consumer advocacy group Essential Inventions in 2004, The Hill reports (The Hill, 3/14). Essential Inventions in April 2004 filed a request with NIH for a license to produce a generic version of the drug while it is still under patent, saying that the drug was developed using federal funding and is being sold at an unreasonably high price. According to the group, under the 1980 Bayh-Dole Act, the government has the authority to grant licenses to other manufacturers to produce patented medicines that were developed using federal funding. In such cases, the government also reserves the right to demand reasonable prices from the drugmaker. According to Abbott, although a $3.47 million federal grant funded early research on Norvir, the company spent a total of $300 million to bring the drug to market. NIH rejected the request concluding that Abbott was adhering to the intent of the law and that Norvir is made available to patients on "reasonable terms." NIH in its August 2004 decision said that the Federal Trade Commission is the appropriate agency to address allegations that Norvir's pricing is anti-competitive. However, FTC has told Abbott that it will not address such complaints, Abbott spokesperson Jennifer Smoter said (Kaiser Daily HIV/AIDS Report, 8/5/04). Following NIH's decision, Waxman and then-Rep. and current Sen. Sherrod Brown (D-Ohio) in October 2004 called on the Government Accountability Office to investigate. In addition, a 2005 lawsuit filed in federal court by the Service Employees International Union's Health and Welfare Fund is scheduled to go to trial in 2008 (The Hill, 3/14).