Over 200 organizations and physicians, six members of Congress, call for Secretary Tommy Thompson to open competition for two federally funded medicines; Demand for public hearing grows.

March 30, 2004


Lynda Dee, Co-Chair, AIDS Treatment Activists Coalition's Drug Development Committee 410-332-1170; 410-889-6843
James Love, Director, Consumer Project on Technology (CPTech), 202-387-8030
Joy Spencer, Press Relations, 202-837-8030; 703-727-6761
Sean Flynn, Senior Attorney, CPTech, 202-387-8030; (c) 202-294-5749
Expanded press contacts, previous reports, briefing materials:

Over 200 organizations, physicians and individuals and six members of the House of Representatives have called on Secretary of the Department of Health and Human Services Tommy Thompson to use the federal Bayh-Dole Act "march-in" power to open competition on two federally funded medicines. The petitions allege that U.S. pharmaceutical companies are exploiting federal research funding by selling government funded inventions at astronomical prices that prevent reasonable public access.

The petitions involve two blockbuster medicines, the AIDS drug Norvir (Abbott Laboratories) and the #1 selling glaucoma treatment Xalatan (Pfizer). Each was discovered under multi-year multi-million dollar research grants from the National Institutes of Health.

The petitions allege that each medicine is not being made "available to the public on reasonable terms," as required by the Bayh-Dole Act, because each is priced in the U.S. between two and 10 times the price in any other country in the world, despite the U.S. government funding the initial inventions.


Before December 2003, the price of Norvir in the U.S. was far higher than in Canada or any Western European country. Two days before Christmas 2003, Abbott increased by 400% the price. The most common dose, which is used with three other AIDS drugs to boost their effectiveness, rose from under $1,600 to over $7,800 a year, while remaining under $720 in Canada and many countries in Western Europe.

According to a letter to Secretary Thompson signed by over 80 physicians who specialize in the treatment of HIV/AIDS: Norvir "is the only effective boosting compound available to increase the effectiveness of existing treatments for HIV/AIDS" and is "an essential component of almost every protease inhibitor-based antiretroviral treatment for HIV/AIDS."

Norvir is especially important for patients in need of a "salvage therapy" of new and powerful treatments because their virus has become resistant to other medicines. Lynda Dee, Co-Chair of the Aids Treatment Activists Coalition's Drug Development Committee, called the price increase for these patients, who may have no choice as to the medications they need to survive, "pharma terrorism perpetrated against the patients who need new drugs the most."

Abbott Laboratories made over $1 billion in sales by 2001, far eclipsing its research and development investment in the drug. James Love, an economist specializing in the pharmaceuticals market and director of the non-profit Consumer Project on Technology, has estimated Abbott's investment in clinical trials for Norvir at under $15 million. The FDA expedited the approval process to just 70 days, allowing Norvir to be sold in the U.S. in a record time after its first patents were filed.

A complaint has been filed with the Federal Trade Commission alleging that Abbott violated federal antitrust laws by bundling Norvir with another AIDS drug in a single pill, called Kaletra, and insulating the price of the combination pill from the price increase. In effect, this practice has allowed Abbott to raise the price of its competitors' products that compete with Kaletra, in violation of federal case law.


Xalatan, the world's #1 selling glaucoma treatment, was discovered under a multi-million dollar grant to Columbia University, which licensed the invention to Pfizer. Xalatan is sold in U.S. pharmacies for as much as $65 for the same 4-6 week supply that sells for under $10 in Denmark.

A letter to Secretary Thompson signed by 15 health care and seniors groups, including the Gray Panthers, Families USA and AFSCME, stated: "We find this conduct outrageous. Americans should not have to pay multiples of what Canadians and Europeans pay for a drug invented with U.S. taxpayer funding."

On March 26, Mike Naylor, Director of Advocacy of the AARP wrote to Secretary Thompson urging him to hold a public fact finding hearing on the Xalatan petition. The letter explained that, as a result of Pfizer=92s discriminatory pricing "millions of Americans are unable to afford to take advantage of this revolutionary medicine, ironically, despite the fact that the drug was developed in part using taxpayer funds."


On March 25, Congressman Sherrod Brown, ranking minority member of the House Energy and Commerce Health Subcommittee, questioned National Institutes of Health Director Elias Zerhouni on the agency=92s handling of the Bayh-Dole march-in petitions.

Congressman Brown acknowledged that "these groups have requested a public hearing on this issue. They recently received a letter saying that representatives from NIH would be glad to meet with them, AFTER a decision is made on the petition" He continued:

"Dr. Zerhouni, I am concerned about that. These groups want to make the case regarding the viability of using Bayh-Dole given the specific patents on this product and other issues that make this case complex.

"This is a very serious matter, and these groups deserve the opportunity to make their case before a decision is made. Will you grant them the opportunity to make their case in a public hearing?"

Dr. Zerhouni refused to assure Congressman Brown that a hearing would take place, although he committed to "tend toward openness" where the law allows. Congressman subsequently sent Dr. Zerhouni a two-page letter summarizing the flexible procedures in the Bayh-Dole Act and regulations, concluding: "Given your commitment on March 25, and the context of a permissive legal and regulatory framework, I expect that you will ensure that a public hearing is held on the march-in petitions before the NIH makes a recommendation to the Secretary."


The growing coalition of consumers, physicians, health and AIDS treatment activists is continuing to press Secretary Thompson to grant a public hearing on the petitions. The Secretary has received hundreds of such requests from around the country. Coalition representatives have conducted numerous briefings with congressional staff and report a large amount of concern that the Department of Health and Human Services is reluctant to use existing federal authority to enforce reasonable pricing of government funded medicines.

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