The federal government yesterday rejected a request by AIDS activists and some physicians to order Abbott Laboratories to lower the price of its popular drug Norvir because it was developed in part with tax dollars.
Shortly after Abbott quintupled the price of Norvir in December, consumer advocates asked the Bush administration to take the unprecedented step of overriding the drug's patents and allow the sale of a cheaper generic version.
The National Institutes of Health concluded it lacked authority under the 1980 Bayh-Dole Act to intervene, primarily because the Chicago-based company has made Norvir widely available.
"Is this drug on the market? Is it available for patients to purchase? Has it been determined to be safe and effective by the Food and Drug Administration?" said Bonny Harbinger, deputy director of the Office of Technology Transfer at NIH. "Those are the primary issues we looked at."
With voter anger rising over soaring drug prices, the Norvir case took on volatile political overtones. In its decision, the agency took pains to steer clear of that broader debate.
"The NIH believes that the issue of drug pricing is one that would be more appropriately addressed by Congress, as it considers these matters in a larger context," NIH Director Elias A. Zerhouni wrote in the decision, which was dated July 29 but not released until after the 4 p.m. closing of the stock market yesterday.
"The decision . . . was the only decision they could make under the law," said Joseph Allen, president of the National Technology Transfer Center, who helped craft the 1980 law as an adviser to Sen. Birch Bayh (D-Ind.).
In addition, the Federal Trade Commission has informed Abbott it does not intend to pursue complaints the company engaged in anti-competitive behavior in its pricing of Norvir and a newer Abbott AIDS product called Kaletra, which includes Norvir, according to Abbott spokeswoman Jennifer Smoter.
The early work on Norvir (chemical name, ritonavir) was sparked with a $3.5 million grant from the NIH, though the company has said it poured a total of $300 million into the drug's development. Norvir and a handful of other drugs called protease inhibitors have dramatically extended life expectancy for people infected with HIV because the drugs block the enzyme that enables the AIDS virus to replicate.
Abbott officials said the firm "repriced" Norvir from $1.71 for a daily dose to $8.57 a day because the original standard dosage of 1,200 milligrams was reduced to 100 milligrams when Norvir came to be used primarily as a booster that made other AIDS drugs more effective. Since its introduction in 1996, Norvir has generated more than $1 billion in sales, though annual revenue fell last year to about $100 million.
Activists at Essential Inventions argued that the price increase amounted to gouging by a company that relied on tax dollars to create the blockbuster medication.
"Norvir is now five to 10 times more expensive in the United States than in other high-income countries," said the group's president, James Love. "Essential Inventions is asking the Bush administration to adopt a simple rule: U.S. consumers should not pay more for drugs invented on government grants."
Smoter noted that Abbott has frozen the price of Norvir for government purchasers at $1.71 and provides the medicine free to anyone who is uninsured or cannot afford it.
Essential Inventions and Rep. Sherrod Brown (D-Ohio) said they would urge Health and Human Services Secretary Tommy G. Thompson to reverse the NIH ruling.