Glaxo Seeks $1.5 Billion in AIDS Drug Trial Against Abbott - Bloomberg

GlaxoSmithKline Plc lawyers, in a trial seeking at least $1.5 billion in damages, told jurors that Abbott Laboratories had an illegal monopoly over HIV drugs.

Glaxo’s attorneys made opening statements to jurors today in federal court in Oakland, California. In a trial expected to last three weeks, Glaxo, Rite Aid Corp. and drug distributors seek an award of triple their alleges damages in the case, which could amount to as much as $4.5 billion.

Abbott, in December 2003, quadrupled the price of its AIDS medicine Norvir, a boosting agent for other HIV medicines such as Abbott’s Kaletra. The price increase meant that other drugmakers that used Norvir in their medicines couldn’t compete on price with Kaletra, said Brian Hennigan, a Glaxo attorney.

“Why was a price increase taken?” Hennigan asked jurors. “To stop competition from Glaxo.”

Abbott increased the wholesale price of a Norvir capsule containing 100 milligrams from $1.71 to $8.57, Abbott said in court documents.

That increase caused Glaxo’s Lexiva, which includes Norvir, to cost 75 percent more a day than Kaletra, Hennigan said. Norvir’s price was raised about a month after Lexiva was introduced, he said.

Customers Penalized

The higher cost also penalized drug customers such as Rite Aid that wanted to buy medicines that competed with Kaletra, lawyers for the drugstore chain and other distributors said in court filings.

Abbott denies wrongdoing in the lawsuit. It has said the price increase for Norvir was fair. The company, based in Abbott Park, Illinois, contends there was strong competition for HIV drugs and Kaletra had only 30 percent of the market for such drugs.

Glaxo, based in London, lost an estimated $570 million in profit on sales of its Lexiva medicine because it was sold at only half the rate that the company believed was possible, Hennigan said. Rite Aid and other drugstores said in court filings that they were overcharged $1 billion as a result of Abbott’s monopoly on Norvir and Kaletra.

“The price adjustment of Norvir was a legitimate response to advances Abbott scientists made in treating HIV and captured the fair value for its new use as a low-dose booster,” Adelle Infante, an Abbott spokeswoman, said today in an e-mailed statement.

“The method used by the plaintiffs to calculate their alleged damages is deeply flawed and inaccurate,” Infante said in a second e-mail. “The plaintiffs cannot establish that they were damaged in any way by Abbott’s pricing actions.”

Abbott’s lawyers are scheduled to make their opening statements to the jury tomorrow.

From 2003 to 2009, Kaletra sales were $1 billion a year, according to Hennigan.

The case is SmithKline Beecham Corp. v. Abbott Laboratories, 07-5702, U.S. District Court, Northern District of California (Oakland).

To contact the reporters on this story: Karen Gullo in San Francisco at kgullo@bloomberg.net

To contact the editor responsible for this story: John Pickering at jpickering@bloomberg.net

via bloomberg.com

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