Press room ... 2004 archive

Project Inform Statement on the Norvir Price Increase

January 22, 2004

In December, 2003, Abbott Laboratories raised the price of their protease inhibitor Norvir (ritonavir) by approximately 400%. The average wholesale price (AWP) for Norvir jumped from $2.14 per 100mg pill to $10.72 per 100mg pill. A price increase of this magnitude is unprecedented.

Project Inform, a national HIV/AIDS treatment information and advocacy organization that has served hundreds of thousands of people living with HIV since its inception in 1985, is calling on Abbott Laboratories to rescind this unwarranted and mercenary price increase immediately.

The majority of people prescribed Norvir today are using it at low doses to boost the activity of other protease inhibitors. Previously, using Norvir as a boosting agent resulted in only a modest increase in cost for these anti-HIV combinations. With the Abbott price hike, the cost of such combinations could increase by up to $2,000 per month.

Abbott's other protease inhibitor, lopinavir, also requires Norvir to boost its effectiveness. It is formulated with a small amount or Norvir, combined in a single pill and sold as Kaletra. Notably, Kaletra's price (about $700 per month average wholesale) did not increase.

Project Inform is concerned that the disparity in the price of Kaletra versus other Norvir boosted protease combinations may lead some insurers to limit people's access to protease inhibitor combinations other than Kaletra. Many could be left with substandard treatment options, leading to increased illness and even loss of life. The price increase may also have a negative impact on the development of new protease inhibitors that require a boosting dose of Norvir. People living with HIV desperately need more treatment options, not fewer, and Project Inform is encouraging the federal government to investigate whether Abbott's actions are in accordance with the laws that govern marketplace competition.

It is virtually inevitable that the health care insurance industry will pass on the higher costs that result from this price increase in the form of higher premiums and co-pays. This is unacceptable, as many people are already struggling to meet their skyrocketing cost sharing obligations. Furthermore, cost increases will likely force more and more individuals to turn to public programs for insurance or assistance.

Although Abbott has stated that Medicaid programs and State AIDS Drug Assistance Programs (ADAP) are protected from the worst of the price increase for now, an increase in the average wholesale price (AWP) could still have detrimental affects on both programs. Some state ADAPs must pay the highly increased price at the point of purchase and then receive most of the increase back in rebates. Rebate payments can take six months or more to reach participating programs. In addition, increases in AWP could reduce rebate payments in states that use a broad pharmacy network to distribute their Medicaid and ADAP medications. The resulting cash flow problems will cripple these already strapped programs.

Project Inform recognizes the need for the pharmaceutical industry to remain a partner in researching and developing more effective treatments for HIV. This price increase, however, represents the kind of short-sighted, greedy and unconscionable business model that has contributed to the crisis of cost and access to care that threatens the U.S. healthcare system. We urge Abbott laboratories to rescind this decision.