Important note: Information in this article was accurate in 2004. The state of the art may have changed since the publication date.
The Los Angeles Times - August 10, 2004
In December, Illinois-based Abbott Laboratories bumped up the price of the usual dose of Norvir, a crucial HIV/AIDS drug, from $1.71 to $8.57 a day. An advocacy group's effort to revoke Abbott's patent on Norvir died last week when the federal government refused to intervene. Legally, the government's decision made sense: Abbott isn't breaking any patent laws by quintupling Norvir's price. But to AIDS patients who don't give a rip about legal niceties, Abbott has some explaining to do.
Abbott points to slumping sales for Norvir, which reached the market in 1996. Originally, the drug was given to AIDS patients by itself, in larger doses that brought in more revenue. But as similar drugs emerged, Norvir's role changed: Doctors found it to be most effective when prescribed in much lower doses with similar drugs. Consequently, Norvir sales slumped.
It wasn't an event that threatened the company's bottom line. In July, Abbott reported a second-quarter profit of $634 million, more than double its profit of a year ago.
To add insult to injury, only American AIDS patients pay the Norvir price increase, leaving the drug markedly cheaper in other countries. Abbott has set up programs it claims will effectively make the price increase a nonissue. The uninsured and patients covered by government insurance programs won't face any Norvir price increases, and a small percentage will even get the drug free, says a spokeswoman.
You'd think the administrative costs of dealing with those who will now apply for aid would cancel the profit. Another big chunk of customers will no doubt be looking for a Canadian pharmacy. Too bad companies that insure their employees can't do that.
Marcia Angel, a former editor of the New England Journal of Medicine, stated in Monday's Times that the 10 largest U.S. pharmaceutical companies garnered $35.9 billion in profit in 2002 and spent just 14% of their revenue on developing new drugs. A move like Abbott's, no matter what socially conscious smoke screens it puts up, only furthers patients' fears that drug companies will squeeze Americans for revenue they can't get elsewhere and will aim at people who need a drug to stay alive.
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