In their relentless campaign against technological innovation, left-wing activists last week came up with a new approach. They're invoking a 24-year-old law that would force a drug company to give up its patent on a key medicine and let generic competitors produce the drug. [...]This story should sound familiar to the seven or eight people who have been reading Respectful of Otters since January, when I made several posts about the issue. Briefly: As the op-ed says, ritonavir (Norvir) is valuable primarily because it boosts the effects of other protease inhibitors. The increased price of ritonavir - but not of Abbott's combination drug Kaletra, which contains ritonavir - means that it's suddenly become more expensive to take any other company's ritonavir-plus-protease-inhibitor combination. It's an attempt to grab back some of the market share that Kaletra lost with the arrival of newer drugs. It's certainly not about Abbott having trouble recouping the costs of developing the drug - not when ritonavir has been on the market for eight years, and not when Abbott shareholders earned a 28.3% return on investment in 2002.
In December, Abbott increased the price of its successful Norvir by about 400%, from $1.71 to $8.57 a day. Abbott said it needed the increase to recoup the costs of developing the drug and to finance future AIDS research and development efforts. Why now? Abbott said it had discovered that the drug had an added attraction that made it more valuable: It can boost the activity of other AIDS drugs, including its own Kaletra.
The op-ed makes the exact same arguments Abbott was making to the newspapers back when they first raised the prices: low drug prices stifle innovation, modest price to pay for the value, we're giving it away for free to the needy, incentive to develop the next blah blah blah. So what's with this LA Times op-ed, which sounds like it could've been written by Abbott's own PR people? It's funny you should ask. Nick points out that the author of the piece, Jim Glassman, is funded by PhRMA - the pharmaceuticals trade association of which Abbott is a member. Not that Glassman discloses this conflict of interest in his op-ed, of course. Apparently, he thinks that's optional.
The price battle over ritonavir is happening at a time when programs that fund HIV medicines are going broke. Abbott's promised to freeze the cost of ritonavir bought by state drug assistance programs, true enough, but that price break won't extend to other manufacturers' drugs which are dependent on ritonavir's boosting power. Ultimately, the patients will suffer - no matter how much Abbott spends on pretty editorials certifying that they won't.