WASHINGTON – The government on Wednesday refused to override patents on the AIDS drug Norvir (search), effectively allowing a quintupling of the price to stand despite consumer groups' accusations of price gouging.
Patient groups and some members of Congress had pushed the National Institutes of Health (search) to take the unprecedented action, arguing it was warranted under a special law because Norvir's discovery was partially funded by taxpayer dollars.
But the NIH decided that such an extraordinary step could have overly broad effects on the pharmaceutical market, and would exceed that law's intent.
"The issue of drug pricing has global implications and, thus, is appropriately left for Congress to address legislatively," concluded Dr. Elias Zerhouni (search), NIH director.
Abbott Laboratories raised the price of the 8-year-old Norvir to $8.57 a day from $1.71 late last year.
The impact reached far beyond that one drug: Low doses of Norvir are used to boost the effects of other anti-HIV medicines, meaning patients taking a wide array of AIDS (search) drug cocktails faced substantially higher bills.
Consumer advocates decried that the increased price applied only to the United States, leaving Norvir 5 to 10 times cheaper in other countries. They also called it anticompetitive, because it only applied when Norvir is added to other companies' AIDS medicines, not Abbott's own Kaletra, a medicine with Norvir built into the pill.
The price hike came amid already vigorous debate about why Americans pay much more for prescription drugs than do patients in such countries as Canada and Britain.
Citing the $3.5 million NIH grant that helped lead to Norvir's discovery, the consumer group Essential Inventions petitioned the government to grant licenses for other companies to make the medicine, too. Their aim: driving the drug's price down.
The 24-year-old Bayh-Dole Act enables the NIH to claim patents of inventions partly funded by government if companies don't bring them to market in ways that "achieve practical application." But the government has never invoked its so-called march-in rights.
"It's a horrible decision," said Robert Weissman, general counsel for Essential Inventions said of the NIH ruling. The decision means drug makers "can put government-funded inventions on the market at any price whatsoever without facing the possibility of a march-in."
NIH concluded that Norvir meets the main intent of the law. The drug is widely sold and, thus, offers the agency no health reason to intervene, said Bonny Harbinger, deputy director of NIH's Office of Technology Transfer.
Does that mean NIH would never declare the price of a federally subsidized drug too high? "That's very hypothetical for me to try and answer," Harbinger said, adding that other factors are considered, too.
The decision suggests "it doesn't matter what drug makers charge for a taxpayer-subsidized drug, as long as they continue to sell it," complained Rep. Sherrod Brown, D-Ohio.
Brown and Weissman pledged to appeal to Health and Human Services Secretary Tommy Thompson to overrule the NIH decision. A Thompson spokesman didn't immediately return a call for comment.
Abbott welcomed the decision. The company maintains the higher price is necessary to counter falling sales as Norvir's use has shifted from a primary agent to a low-dose booster. Sales fell to $100 million last year from a high of $250 million in 1998. Norvir sales have totaled more than $1 billion since its introduction.
The company also says the NIH grant represented a tiny portion of the roughly $300 million it ultimately spent developing Norvir, expenses it needs to recoup to invest in new research.
"This is good news for patients who will continue to benefit from both current and future innovations that result from the advent of the Bayh-Dole Act," said Melissa Brotz, Abbott spokeswoman.
NIH did say its sister organization, the Federal Trade Commission, would be the proper agency to address allegations that Norvir's price is anticompetitive. Brotz said the FTC recently notified the company that the agency had no plans to investigate.