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Norvir (ritonavir) is a Protease Inhibitor (PI), and is an essential component of one of the three types of antiretroviral drug "cocktails" used to treat HIV and AIDS. Norvir was developed as a standalone PI, with some funding from the National Institutes of Health. However, today Norvir is primarily used in low dosages in combination with one of several other PIs to "boost" the effectiveness of the other PI being taken. Eight out of the nine PIs on the market commonly use Norvir as a booster. One of these is Kaletra, a combination product manufactured by Abbott that combines Norvir with Abbott's own PI, lopinavir .
In December 2003, Abbot raised the wholesale price of Norvir from $205.74 to $1,028.71 for 120 capsules - an increase of over 400%. However, Abbott did not increase the price of Kaletra. The result is that all the other PI regimens using Norvir are significantly more expensive than Kaletra. PAL charges that Abbott has effectively raised the price of its competitors' products, forcing patients to either pay much more for their life-saving medications or to switch to Kaletra, which may not be medically appropriate for them. The different protease inhibitors currently available are not interchangeable-each has its own properties and side effects, and patients must switch PIs as their disease progresses.
PAL Member Litigation
Update October 1, 2008: Proposed Settlement
The plaintiffs in the case, PAL coalition member SEIU Health & Welfare Fund and two individuals, reached a proposed settlement with Abbott on August 13, 2008. Under the settlement, Abbott will pay between $10 Million and $27.5 Million in exchange for the case being dismissed, depending on how the 9th Circuit Court of Appeals rules on three questions that the parties agreed to seek its review of.
The federal District Court hearing the case issued preliminary approval of the proposed settlement on August 19, 2008. On August 27, 2008 the court certified three issues (that have been essential to plaintiff’s anti-trust claims so far) and allowed the parties to immediately seek their appeal. The amount Abbott will pay into the settlement fund depends upon whether the Ninth Circuit Court of Appeals accepts, and how it decides, the appeal. For instance:
- If the Ninth circuit accepts at least two of the issues or questions upon appeal, Abbott will pay $10 Million which will be distributed as a cy pres award to non-profit organizations serving HIV/AIDS patients.
- If the Ninth circuit decides in favor of the plaintiffs, Abbott must make a second payment of $17.5 Million. The resulting settlement fund of $27.5 million will be divided so that 70% ($19.25 Million) goes to a nationwide cy pres award, and 30% ($8.25 Million) is awarded to consumers and third party payors (health plans, union benefit funds and others) in California.
- However, if the Ninth Circuit remands (sends back to the District court) any question or issue for further fact-finding, then Abbott must make a second payment of only $4.375 Million more, with the total $14.375 million to be allocated 70% to cy pres, and 30% to California consumers and third party payors.
- Finally, if Abbott wins any of the questions on appeal, they only need to pay the initial $10 Million, all of which is to be used for the nationwide cy pres award.
Whatever amount is allocated to a cy pres award will be distributed equally to 13 different non-profit organizations that benefit people with HIV/AIDS. (See a list here).
While confusing, the settlement is a creative resolution of the lawsuit, taking into account the obstacles that the plaintiffs would have faced at trial and the appeal that Abbott would likely have filed if it lost at trial.
A notice of the settlement will be distributed to class members as soon as the Ninth Circuit accepts the appeal. Consumers and third party payors that paid for Norvir will then have the option to opt out of the settlement (if they want to pursue their own individual lawsuits against Abbott), object to the terms of the settlement, or file claims (if they are located in California).
Update: December 18, 2008
The Ninth Circuit Court of Appeals accepted the appeal on December 18, 2008, in a one-page order.
Courts: U.S. Court of Appeals for the Ninth Circuit
U.S. District Court, Northern District of California (Judge Wilken)
Circuit Court of Cook County, Illinois, Chancery Division (Judge Jaffe)
Press Releases/Blog Entries
Abbott Documents Unsealed bythe Court (see Judge's Order on Motion to Seal, above)
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