June 23, 2009

Negotiating a Fair Price for the Norvir Tablet

Abbott is gearing up to release its long-awaited Norvir (ritonavir) tablet. The company states that it will negotiate the price—which has not yet been announced—in good faith. Nonetheless, the Fair Pricing Coalition is already engaged in a vigilant campaign to ensure affordable access to all.

Abbott, the maker of two HIV drugs, Novir (ritonavir) and Kaletra (lopinavir/ritonavir), has become the focus of community concerns about pricing again. This fall, the company will launch a new tablet formulation of Norvir that doesn’t require refrigeration and may cause fewer gut-related side effects, two downsides of the current capsule formulation.

Activists are already worried about the new drug’s price, however. Their concern stems from Abbott’s decision, in December 2003, to raise the price of Norvir by 400 percent. Virtually overnight, the Norvir price for a lower dose used to boost the blood levels of other protease inhibitors increased from $54 per month to $265 per month—the per-patient wholesale price of the drug.

The move caused a huge uproar among the community and health care providers. An investigative report by The Wall Street Journal in January 2007, which was based on internal memos from Abbott that were released during a law suit against the company, revealed that the price increase was primarily a marketing tactic. The aim was to make other protease inhibitors—notably the increasingly popular Reyataz, commonly used with a low boosting dose of Norvir—less attractive and to maintain the popularity of Kaletra (the price of which did not increase, even though it contains Norvir). In turn, activists are wary of Abbott’s pricing intentions with the new Norvir formulation.

Specifically, the Fair Pricing Coalition (FPC)—a group of HIV/AIDS treatment activists—has issued a letter to the CEO of Abbott, asking that the company not raise the overall price when it launches the new formulation and to ensure that government programs retain the deep discounts they now receive for Norvir. The FPC is encouraging organizations, health care providers and individuals to view and sign on to the letter by June 26.

The FPC is hoping to discuss pricing issues with Abbott at the end of June. So why issue the letter now, when negotiations haven’t even begun? “We’re trying to make the public aware that these changes are about to happen, and we want to convince Abbott to play fair,” explains Lynda Dee, one of the founders of the FPC and executive director of AIDS Action Baltimore. “We have a long history with them. What makes us think they’ll play nice-nice with us this time?”

What Is at Stake?

Medicaid and AIDS Drug Assistance Programs (ADAPs) have remained protected from the 400 percent price increase so far. That’s because federal law dictates that companies can’t raise the prices of drugs already on the market any more than a certain percentage for those programs.

The release of a new version of Norvir will be seen as a brand new drug in the eyes of the law, however. As a result, Abbott could potentially charge ADAPs and Medicaid programs a much higher price. According to the FPC, a new version of Norvir could potentially mean a 1,000 percent cost increase for these federal- and state-funded programs, costing them more than $50 million in additional costs per year for Norvir alone.

With the economy hurting, and states like Arizona and California already cutting deep into their ADAP and Medicaid budgets for next year, such programs can ill afford such a steep cost increase. Private insurance companies are also feeling the pinch of higher drug costs. To compensate, they’ve been passing the increasing costs on to their policyholders in the form of monthly premium increases, higher deductibles and deep-pocket drug co-payments.

Abbott recently launched a co-pay program for its protease inhibitor, Kaletra. It covers the first $50 of a person’s Kaletra co-payment each month and an additional $100 toward the other drugs in his or her regimen. The company does not currently have a co-pay program in place for Norvir, however, which is another factor that has caused consternation and mistrust among some FPC members.

Jeff Berry, the director of publications for Test Positive Aware Network in Chicago, is concerned about the lack of a Norvir co-pay program, not only as a member of the FPC, but also as someone dealing with medication issues. “Right now I’m on Kaletra. If it turns out I have to switch my regimen to another protease-based regimen, and I need to use Norvir, then I’ll have to pay much higher co-pays, because Norvir isn’t included in their co-pay program.”

Abbott declined to comment on any of the specific accusations and concerns in the sign-on letter. It did, however, provide AIDSmeds with an official statement. “Abbott has successfully worked with the Fair Pricing Coalition in the past several years, resulting in responsible pricing,” the statement said. “In fact, Abbott has not taken a price increase on Kaletra since October 2007. We look forward to communicating with the FPC in good faith, on the new Norvir tablet, as we did with the Kaletra tablet in 2006.”

While this response doesn’t satisfy some FPC members, they are hoping that it signals a willingness on the part of Abbott to hear community concerns. “There’s been some bad blood in the past,” Berry says, “but I think there’s a good opportunity for the FPC and Abbott to work together to ensure that the new Norvir formulation is priced appropriately, so that there is the broadest access for the most people who need that drug, which is pretty much everyone on a protease inhibitor.”

Search: Abbott, Norvir, ritonavir, Kaletra, lopinavir, Reyataz, atazanavir, price, price increase, Fair Pricing Coalition, FPC, sign-on letter, ADAP, Medicaid, funding, Lynda Dee, AIDS Action Baltimore, Jeff Berry, Test Positive Aware Network

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Previous Comments:

Mike, Atlanta, GA, 2009-08-20 06:11:14
Is there any news as to when the new Norvir Tablet will be released! The current regiment can be tough with it's side effect. Looking forward to the new "revamped" version! Thanks!

Kevin, Phoenix, 2009-07-06 17:14:33
I quit taking Kaletra partly because of Abbot's greedy pricing. I'm happy and healthy on another HIV med that works better than Kaletra and costs less. I'll go out of my way to avoid taking any meds made by Abbot until they change their ways.

Jamie, Kansas City, 2009-07-03 14:41:26
Pharma companies are screwing gay men 100 times over on prices. The USA doesnt care about gays....that much is clear. Obama does nothing for us, Republicans do nothing for us, we will suffer for being gay for the next 50 years. We are worthless, our status is below that of a black slave 200 years ago. You will go broke to keep your miserable sick self alive and will go without the basics in life. Cant afford food at the grocery store because of the prices of your meds? Well to bad for you.

Doug, Seattle, 2009-06-30 11:29:46
Well, all I can say is if these drug companies would stop paying all these lobbyists millions upon millions of dollars to lobby congress they wouldn't have to charge excessive amounts for any of the drugs but it's all about the bottom line and not the ethics. Single payer national healthcare is the only way America is going to break the hold that insurance and drug companies have on the US. Money talks and legislators march in lock step, including the Democrats.

Patrick Helton, Denver, CO, 2009-06-29 20:01:05
I am one two of the meds that are in this article. I never would think a drug company would try to bleed HIV postive people for money. We need these meds to live while they line there pocket with gold and let people die from there greed.

paul m arrieta, port st lucie, 2009-06-27 07:10:30
maybe if some of the doctors,politicians;and greedy business men;and i will reiterate; some of them,were not in the pocket of these drug companies,there would be no unfair pricing increases on HIV meds.

Ted, Davenport, FL, 2009-06-26 13:17:48
Wow,the GOvt develops a drug and a big company makes money on it! How much does this Norvir Cost? How about the other drugs I take. Adap pays for mine. Anyone know how much NOrvir, Reyataz and Truvada cost? Since the government pays for so many people, how come they don't make this illegal (for all drugs developed with their money?)

Evelyn, new York, 2009-06-25 12:55:47
I have 3 bottles of Norvier and I can not take them it was changed to another medicantion.I am willing to donate them to someone who really could use them.

Vince, San Simeon, CA, 2009-06-24 19:03:41
John - Abbott did not spend a dime of their own money developing Norvir. It was 100% federal tax dollars. This drug should have been in the public domain from day one!

John Ilvento, San Diego, 2009-06-24 18:02:04
Yes drug companies spend lots of money developing these drugs but they also spend alot of money lobbying congress. In these times, it's important that these drug companies place some restraint on their pricing policies. This is what is wrong with our health care system as whole today, GREED!

Brian, Vancouver, Wa, 2009-06-24 17:55:13
Geez John..you sound like you work for Abbott. Granted a lot of R&D goes into making HIV drugs, but considering that HIV drugs will not go away in the near future and the infection rate doesn't seem to be going down. The need for this drug will not diminish. The company will have made their ROI and still overcharging the people that use this drug to stay alive. And no the communist countries probably didn't develop anything useful, but they sure are buying what we make.

jeff, jmillz47@yahoo.com, 2009-06-24 17:27:13
letting drug companies manipulate the market for profit seems pretty low when it comes to AIDS meds---surely with all the bailout the govt. is throwing away they could make a deal with the drug companies that would be fair and profitable--- people who side with the drug companies are not living on adap or ryan white or disability--otherwise they would have formed different opinions--

Eric, Toledo, 2009-06-24 14:50:40
What good are the drugs if people can not afford them? Yet so much money is wasted on other trival things in the Presidents budgeting. Its sad to see so many people caught in the loop holes of the system and dying because they can not get meds.

Thomas, Toronto, 2009-06-24 13:20:30
Abbott has also had 13 years of profit and sales of this drug. In addition, because it is co-administered, they get money selling it when people use other companies' drugs too. It really is a PI monopoly. In addition to that, this drug was developed with funds from a public grant. (That's right, tax-payer's dollars were used to develop Norvir). It will be a glorious day when the patent expires and we can finally have PIs with the Norvir built-in!

John, Washington, DC, 2009-06-23 18:08:34
You know what? Abbott spent a great deal of time and money developing Norvir. The should be allowed to charge what they want for the drug. This is how companies recooperate the money they spent on research, development, approval, and advertising. If we start telling companies that they can't make money off of drugs then they will stop developing them. And then where will we be? Capitalism has gotten us all of the drugs we have now. How many communist countries have developed HIV drugs?