How much has the public invested in ritonavir, and how much has Abbott?

James Love
June 3, 2004

Abbott’s media talking points are to say that $3.5 million
NIH grant that gave the US government march-in rights on the
six ritonavir patents was only a tiny fraction of the $300
million Abbott spent on the development of the drug.
Abbott uses different standards to evaluate the US and the
Abbott investments, underestimates the value of the US
government investments, and over-estimates its own costs.
First, what is Abbott actually saying?

In the Abbott FAQ on the price hike, it says:

http://www.norvir.com/pdf/Norvir_faq.pdf

     The 1988 discovery grant that Abbott received from the
     NIH funded early HIV discovery work, predominately pre-
     clinical work, and represents less than 1 percent of
     Abbott's investment in early HIV research and
     development.

In the Abbott Norvir FAQ version, Abbott’s “investment in
early HIV R&D” was large.  Jeff Leiden’s statement at the
May 25, 2004 NIH hearing is as follows:

http://abbott.com/news/press_release.cfm?id=757
     The NIH grant we received was approximately $694,000 a
     year for a period of five years, from 1988 to 1993,
     totaling $3.474 million, a fraction of Abbott's
     investment in HIV research during that same period.
     These funds were used to pay for expenses related to
     pre–clinical research for Abbott's early protease
     inhibitor research program.
     In contrast, Abbott spent well over $300 million to
     discover and develop Norvir—over 100 times the entire
     amount of the NIH grant that supported our early HIV
     research program.
In this version, Leiden claims Abbott spent “well over $300
million to discover and develop Norvir.”

(Let me know if people find other details of Abbott’s
claims).


ABBOTT’S COSTS

It is hard for know what Abbott is claiming to spend money
on, but it is known that much pre-clinical work was done on
the NIH nickel, involving not only the five year grant to
Abbott, but also the intramural work done at NIH, which is
detailed in Merril Goozner’s book (the $802 million pill),
but not mentioned by Abbott.  The clinical testing of Norvir
did cost money, but the numbers could not have been huge.
First, as detailed in the Goozner book, it is clear the NIH
had offered to sponsor key trials, but Abbott, hoping to
minimize the NIH role in the drug development, did its own.
In any case, the 1996 approval of the product was based upon
trials involving less than 1,600 patients, less than 30
percent the number of patients that DiMasi claims are
average (5,303) for big pharma products.  DiMasi generously
estimates average per patient costs of around $24k, which is
more than double what we estimated would be spent on HIV
trials back then, particularly since the trials themselves
were short, and fairly easy to do.  But using the DiMasi
figures as the high end, you get about $38 million for the
early trials.  We would put the numbers much lower, but in
any case, a long ways from $300 million.

Abbott continued to do post FDA approval work on ritonavir,
as did everyone else.  It is possible Abbott is claiming
just it’s whole HIV R&D budget, over a long period of time.
But it would be nice if they provided some details of what
the $300 million was spent on.

NIH INVESTMENTS

The $3.474 million the NIH gave Abbott that lead to the
discovery of ritonavir was only one of thousands of grants
the NIH made for HIV.  The risk-adjusted value of the grant
was of course much higher than $3.474, if one considers the
cost of all of the unsuccessful projects the NIH funds for
each one that leads to a successful drug.

(Here it is useful to note that DiMasi estimates the risk
adjusted cost of a successful pre-clinical research program
to be more than $300 million, which is a reasonable starting
point for the value of the successful NIAID grant AI27220).

In addition to the Abbott grant, the NIH CRISP database
(http://crisp.cit.nih.gov/ ) lists 618 other NIH grants that
mention ritonavir, including for example 57 in this fiscal
year.  On top of this, the NIH sponsored at least 62
clinical trials that are listed in the NIH’s
clinicaltrials.gov database.  So the $3.474 million was just
a small fraction of the public investment in the commercial
development of ritonavir.

PUBLIC INVESTMENT AND MARCH-IN RIGHTS

The US government only gets march-in rights in a patent if
the invention was “conceived or first actually reduced to
practice in the performance of work under a [Federal]
funding agreement.”  Ritonavir was conceived and reduced to
practice in performance of NIAID grant AI27220. Each of the
six ritonavir patents that are subject to the Essential
Inventions petition contain a disclosure, made by Abbott,
that “This invention was made with Government support under
contract number AI27220 awarded by the National Institute of
Allergy and Infectious Diseases (NIAID). The Government has
certain rights in this invention.”

It does not matter whether the government investment was
large or small.  The US government spends tens of millions
of dollars on R&D drugs where it retains zero rights in the
inventions, and it spends only a few thousand dollars in
other cases, where it does obtain rights.  What matters is
if the invention was “conceived and reduced to practice” in
performance of the grant or contract, not the size of the
grant.

In the case of Norvir, the public investment was in fact
significant (618 grants, 62 government sponsored clinical
trials), but most important, six key inventions were
“conceived and reduced to practice” in performance of the
$3.5 million NIAID grant.


  James Love

Below is Michael Palmedo’s analysis of ritonavir clinical
trials, for clinicaltrials.gov.


----------------
From: Mike Palmedo 
To: "Ip-health" 
Date: Thu Jun 03 10:39:26 2004

Subject: [Ip-health] Sponsorship of Norvir clinical trials

A search of the word "Norvir" of the database at
clinicaltrials.gov
yeilds 111 clinical trials, and lists the sponsor for each.
What
organizations are listed as sponsors for the trials?

Number of trials sponsored:

Abbott  14
NIH Agencies  62
Other firms  29
Nonprofit or foundation 4
Joint Pub/Priv sponsorship 2


Sponsorship as a percentage of the total

Abbott  12.6
NIH Agencies  55.9
Other firms  26.1
Nonprofit or foundation  3.6
Joint Pub/Priv sponsorship  1.8


COMPLETE LIST OF RESULTS:

Trial                    Sponsor

NCT00025727        Glaxo
NCT00028366        NIAID
NCT00038532        Abbott
NCT00038519        Abbott
NCT00005017        GSK
NCT00001083        NIAID
NCT00002223        Abbott
NCT00002201        Abbott
NCT00000952        NIAID/NICHD
NCT00004578        Abbott
NCT00012519        NIAID/NICHD
NCT00006591        J. Gaithe
NCT00002366        Abbott
NCT00000898        NIAID
NCT00005118        Merck
NCT00001075        NIAID
NCT00001133        NIAID
NCT00009061        Glaxo
NCT00006397        PPD
NCT00000888        NIAID/NICHD
NCT00002451        Merck
NCT00000920        NIAID/NICHD
NCT00046033        NIAID
NCT00038480        NIAID/NICHD
NCT00004580        Abbott
NCT00004582        ViRx
NCT00075231        Abbot
NCT00043966        Abbott
NCT00076414        Magnuson Ctr.
NCT00002447        Roche
NCT00002239        Trimeris
NCT00038636        Abbott
NCT00034866        Boehringer
NCT00000859        NIAID
NCT00072644        Magnuson Ctr.
NCT00002361        Merck
NCT00002241        Merck
NCT00000892        NIAID
NCT00004581        Abbott
NCT00001766        NIAID
NCT00071097        Tibotec
NCT00028301        BMS
NCT00035932        BMS
NCT00050895        NIAID
NCT00076999        Boehringer
NCT00002448        Roche
NCT00039975        NIAID
NCT00043953        Abbott
NCT00027339        NIAID
NCT00000940        NIAID
NCT00023218        NIAID
NCT00004583        Abbott
NCT00042289        NIAID/NICHD
NCT00028314        NIAID
NCT00004584        BMS
NCT00044837        NIAID
NCT00000906        NIAID
NCT00000941        NIAID
NCT00005762        NIAID
NCT00016601        NIAID/NICHD
NCT00001087        NIAID
NCT00001688        NCI
NCT00006604        NIAID/NICHD
NCT00062660        Boehringer
NCT00038220        Abbott
NCT00054717        Boehringer
NCT00006152        NIAID
NCT00000914        NIAID
NCT00001091        NIAID/NICHD
NCT00006326        Agouron
NCT00006339        NIAID
NCT00006578        NIAID
NCT00051831        NIAID
NCT00000822        Immuno/NIAID/BMS
NCT00006154        NIAID
NCT00000902        NIAID
NCT00000874        NIAID
NCT00081588        Tibotec
NCT00017992        Triangle
NCT00006144        NIAID
NCT00036452        NIAID
NCT00004855        NIAID
NCT00000924        NIAID/NICHD
NCT00056641        Boehringer
NCT00014937        NIAID
NCT00001968        NIAID
NCT00034086        NIAID
NCT00001108        NIAID/NICHD
NCT00069524         NCCAM
NCT00041964        NIAID
NCT00005673        NIAID
NCT00000913        NIAID
NCT00002178        Roche
NCT00002374        Roche
NCT00000891        NIAID
NCT00001058        NIAID
NCT00002378        Roche
NCT00002440        Glaxo
NCT00003008        NCI/Two nonprofits
NCT00000918        NIAID
NCT00000919        NIAID
NCT00001119        NIAID
NCT00032669        NCI
NCT00055120        NIAID
NCT00080522        NIAID
NCT00075907        NIAID/NICHD
NCT00050908        NIAID/NHLBI
NCT00002213        Glaxo
NCT00002165        Agouron
NCT00001085        NIAID
NCT00006519        NCI