Readers of this blog have previously read about a lawsuit brought by PAL member Service Employees International Union (SEIU) Health and Welfare Fund against Abbott Laboratories (NYSE:ABT), charging that Abbott’s unconscionable 400+% price increase of the vital anti-HIV/AIDS drug Norvir violated antitrust laws.
That lawsuit has withstood various attempts by Abbott to have it dismissed– defeating a motion to dismiss, defeating a motion for summary judgment, being certified as a national class action, and then surviving an Abbott challenge to that class action status. The trial is scheduled to begin next summer.
Now the chain supermarkets are joining in. The Wall Street Journal reported yesterday that Safeway Inc., Walgreen Co., Kroger Co., Supervalu Inc.’s New Albertson’s Inc. and American Sales Co. have filed a similar lawsuit. It’s not clear from the WSJ article what exactly the supermarkets are claiming, or how they allege they have been damaged. If a copy of the complaint comes our way, we’ll update this entry.
Abbott announced the price increase back in December 2003. What took these supermarkets so long? It’s almost 3 years later. The filing of the suit now may have been motivated by the fact that various states have 3 year statutes of limitations (the amount of time you can file a lawsuit after an alleged “wrong” has occurred) for various kinds of claims concerning alleged fraud. Three years would be up in this instance in about a month. These supermarkets may also have seen the progress of the SEIU suit and concluded that they have a viable case as well.
Merrill Goozner, of GoozNews, (and author of the $800 Million Pill, which contains a chronicling of the development of Norvir), dryly noted “If we had a government (and a Justice Department) that cared about consumer protection, it would join in these suits by invoking the government’s right to ensure that the drug is made available on reasonable terms.”
The last phrase in that quotation refers to the fact that Norvir was developed in part with public funds. Under the Bayh-Dole Act, inventions developed with government funds must be made available to the public on reasonable terms. In 2004, the consumer group Essential Inventions petitioned the FDA and NIH to force the licensing of a generic (a move provided for by the Bayh-Dole Act) because Abbott was not making Norvir available on reasonable terms. In a move notable for its lack of surprise, the FDA and NIH declined.