Documents published by the Wall Street Journal show that Abbott Laboratories seriously considered withdrawing its HIV protease inhibitorNorvir (ritonavir) from the US market in late 2003 in order to reduce the market share of competitors who were using the drug as a booster for their own protease inhibitors. The company also considered replacing Norvir capsules with the deeply unpalatable liquid version of the drug in order to get consumers to switch to the company’s own boosted protease inhibitor Kaletra.
Eventually the company opted for a third controversial option: a fivefold increase in the price of Norvir in the US, implemented in December 2003. That move sparked outrage among doctors and patients, and damaged the company’s reputation.
Norvir is used as a boosting agent at low doses for other HIV protease inhibitors because of its unparalleled capacity to slow the clearance of those drugs from the bloodstream, increasing their potency. Ritonavir is also a component of Kaletra, a combination protease inhibitor also manufactured by Abbott.
In 2003 Abbott was facing a serious challenge to its dominance of the US protease inhibitor market following the approval of Bristol Myers Squibb’s Reyataz (atazanavir), which showed equal potency to Kaletra in treatment-experienced patients when boosted with ritonavir.
The documents published by the Wall Street Journal (an internal email and a slide presentation) show that by September 2003 Abbott was seriously weighing up different options for protecting its market share. An internal document suggested that if the company did nothing it could expect its market share to fall by 10% in 2004.
Several different options were canvassed. The first, and the most radical, was a withdrawal of Norvir capsules from the US market, with existing patients being transferred to Norvir liquid. The move was to be justified by explaining that all current production capacity was needed to supply Norvir capsules to the developing world.
However, a slide presentation dated September 2003 which Abbott claims was prepared by an external communications agency, highlighted the fact that Norvir capsules would remain available in Europe, and that since the drug was no longer used as a standalone protease inhibitor, it would create the perception of supplying an inferior regimen to the developing world.
A second withdrawal option was floated, in which Norvir capsule production would be terminated altogether, and the company would highlight to physicians and patients its strategy for moving to a heat-stable, low pill burden formulation of Kaletra.
However, numerous problems were identified with the approach. For one thing, ritonavir production couldn’t be phased out altogether, because it was needed to make Kaletra. Also, if ritonavir disappeared from the market altogether, the US government or another developed world government would have ample precedent for invoking a compulsory license to make ritonavir; this could potentially do even further damage to Kaletra’s market share.
So a third option appears to have gained ground: raise the price of Norvir. This would raise Kaletra’s market share, the slide presentation states. At the time of the price hike Abbott marketing executives denied that this was their motivation for raising the price, arguing that the price rise was intended to reflect the value that the lower Norvir dose brought to combination therapy.
The eventual price rise was hedged around with qualifications designed to protect Abbott from serious investigation by legislators or the executive branch in the US. The new price would only be charged to private insurers, not Medicaid, Medicare and state AIDS drug-assistance programmes. The company also expanded its patient assistance programme to ensure that no one who needed Norvir would go without on grounds of cost.
A promised boycott of Abbott’s products and educational events by HIV physicians was the first angry reaction to the price increase, and Abbott’s reputation suffered, as internal documents predicted, but Kaletra’s market share did increase and the promised boycott largely failed to materialise.
Abbott spokesperson Melissa Brotz told the Wall Street Journal that the discussions over the phasing out of Norvir capsules were quickly discarded and were not prepared by decision makers.
However Abbott told a California court last year that the options "were prepared by and for some of the most senior officers at the company as part of an enormously important strategic discussion about Norvir." The documents were being defended from exposure to the plaintiff in an anti-trust case brought by two people with HIV and the Service Employees International Union Health and Welfare Fund. The case is scheduled to go to trial in early 2008.
Abbott is now being investigated for unfair pricing of Norvir by the Illinois state attorney-general’s office, which has interviewed several senior executives at the company. They include John Leonard, Abbott's vice president of global pharmaceutical research and development, who referred in his interview to liquid Norvir as "this fluid that has been — I'll just say it — characterised as tasting like someone else's vomit."
Click here to view the full text of the Wall Street Journal article.