A Washington-based nonprofit company yesterday asked the federal government to claim control of patents covering an important AIDS drug on the grounds that the medicine was invented with the help of taxpayer-funded research and a recent steep increase in its price is gouging the public.
The rare request calls for a novel application of the 24-year-old law that governs much of the "technology transfer" of medical discoveries from the government to private industry. It also is the latest skirmish in the ongoing war in the United States over the price of patented pharmaceuticals, and of life-saving AIDS drugs in particular.
"This is a case of unmitigated corporate greed at a time of unprecedented concern about drug prices," said Benjamin Young, an AIDS physician from Denver who spoke in support of the Essential Inventions request that Health and Human Services Secretary Tommy G. Thompson stake a government claim to six of Abbott Laboratories' patents for the drug ritonavir, sold as Norvir.
The National Institutes of Health in 1988 provided a $3.5 million grant to Abbott, the country's 11th largest pharmaceutical company with annual sales of more than $12 billion. The purpose was to help the company create a research team to try to develop drugs that inhibited a key enzyme, called protease, the virus needs to replicate. That family of drugs, when used in combination with other antiretroviral medicines, revolutionized AIDS treatment and dramatically cut mortality from the disease.
Although the grant did not lead directly to Norvir, the team eventually developed that drug, and Abbott spent many millions of dollars of its own money testing it. In 1996, it was the second protease inhibitor to win federal approval.
Taken at its original dose of 1,200 milligrams a day, Norvir effectively controlled the AIDS virus, but it caused many side effects and required a patient to take 12 pills a day. However, it turned out that at doses as low as 100 milligrams, Norvir made other protease inhibitors far more effective, allowing them to be taken less frequently and at lower doses. Norvir does this by greatly slowing down the body's ability to burn off the other drugs.
Virtually all of the protease inhibitors now in use are "boosted" with Norvir. The best-selling protease inhibitor in the country is actually a two-substance pill made by Abbott and sold as Kaletra. It contains a protease drug called lopinavir, and a low dose of Norvir.
To capitalize on Norvir's new use and increasing importance, Abbott in December increased the price of a 100-milligram capsule from $1.71 to $8.75. This had the effect of raising the price of boosted protease-inhibitor combinations -- in many cases, very steeply.
For example, the annual wholesale price of the Merck drug Crixivan (indinavir) boosted with Norvir went from $5,996 to $12,254 a year. Abbott, however, didn't raise the price of Kaletra -- a decision that overnight made its combination drug a bargain. In addition, the new price applied only in the United States. A one-month supply of Norvir in countries such as Australia and Canada -- where long-term, high-volume contracts drive prices down -- costs less than 10 percent of what it now does in the United States.
The move -- which Abbott calls "re-pricing," rather than a price increase -- drew immediate criticism from many physicians and AIDS activists even though the company took several steps to shield some Norvir users from the higher costs.
Abbott froze the drug's price at the old level for the federal Medicaid program and the AIDS Drug Assistance Programs run by each state. Together, those programs provide medicines to about half the people infected with human immunodeficiency virus (HIV) in the United States. It also removed the income ceiling for people seeking Norvir through the company's drug charity program. This meant that private pharmaceutical benefit plans and hospitals were the main payers of the higher price.
Essential Inventions is asking Thompson to invoke the "march-in" provisions of the Bayh-Dole Act of 1980. That act allows universities and companies to patent discoveries made in part by research funded by government grants. Many experts believe it helped ignite the explosion of the biotechnology industry in the United States.
Under Bayh-Dole, the government can claim the patents if companies do not pursue useful applications of them or try to bring products to market on "reasonable terms."
In a meeting before officials of NIH's Office of Technology Transfer yesterday, James Love of Essential Inventions argued that Norvir's price increase violates the "reasonable terms" clause of the law.
But many experts, including one of the law's sponsors, former senator Birch Bayh (D-Ind.), said Love was misreading the act's purpose. The "march-in" provision was meant to give government a recourse if companies holding the patents bottled them up. It was not meant to provide leverage over a product's ultimate price, they said.