This is a little technical, but stay with me.
On December 4, Abbott Pharmaceuticals raised the price of the drug ritonavir from $1.71 to $8.57 per 100mg pill.
Not many people take ritonavir in a full-strength dose anymore, and lucky for them - at the new price, it adds up to $102.84 per day even before the other two drugs in the three-drug AIDS cocktail are figured in. Ritonavir's real value is in enhancing the effects of other protease inhibitors - it keeps them in the patient's system longer, which means that the patient can take smaller amounts less often.
For example: the stand-alone dose of saquinavir is three to six 200mg pills three times a day, or 1800-3600mg per day. Combined with a couple of ritonavir pills, the dose of saquinavir drops to two 200mg pills twice a day, or 800mg - and the midday dose is completely eliminated. This is valuable partly because it increases the likelihood that patients will take all their pills, and partly because lower doses decrease the risk of side effects. It's even valuable to Abbott, because suddenly everyone wants to have ritonavir prescribed as part of their regimen or bundled with the new drug they've just invented.
Abbott markets a drug called Kaletra, which is a combination protease inhibitor (PI) that includes ritonavir. As newer PIs are approved, Kaletra's market share has been dropping. Curiously, the price of Kaletra didn't go up when the price of ritonavir went up, even though ritonavir is an ingredient in Kaletra. But of course, the effective price of every other combination of ritonavir-plus-PI went up. Patients and their doctors have three choices: they can pay extra for ritonavir; they can go back to enormous unenhanced doses of non-Abbott PIs; or they can switch to Kaletra, which hasn't risen in price.
Abbott's defense explains that they give a lot of ritonavir away (which is true) and that they've agreed not to raise prices to state AIDS Drug Assistance Programs yet. They mention their research costs, the traditional defense for high AIDS drug prices. (They don't explain how it is that their research costs have increased for a drug that's been on the market for seven years.) But their primary argument seems to be that the market will bear higher prices.
At the new price of $8.57 per 100 mg, Norvir is most often the lowest cost component of a protease inhibitor-based regimen. For example, when you combine Norvir with a regimen based on newly approved therapies such as Reyataz (atazanavir) at $22.08 per day, Norvir continues to represent a fraction, typically one-fifth, of the daily cost of therapy.Some of the new HIV drugs are very, very expensive. Insurance companies and state programs are paying for it, and they'll eventually assume the increased costs of ritonavir as well. Kaletra will claw back a little more of the combination-PI market share.
There will be much less incentive for other companies to continue research into new PIs that would need to be combined with ritonavir. Their manufacturing costs will increase dramatically, because they have to buy ritonavir from Abbott, so they'll have to either cut profit margins or pass increased costs on to customers who are increasingly unable to afford higher AIDS drug prices. For example, Boehringer Ingelheim's prospect tipranavir needs to be taken with ritonavir. The tipranavir/ritonavir combo was expected to be priced at $20,000 a year, but with the increased cost of ritonavir, the price would be around $29,000 a year. Assuming that there is a ceiling to what consumers are willing or able to pay - and there is; the current high cost of drugs has led to waiting lists and medication rationing in many states - tipranavir may now be priced right out of the market.
And the patients? They should just remember that larger drug company profits are their only hope for the future.