U.S. jury rejects Glaxo antitrust claims vs Abbott

OAKLAND, California Wed Mar 30, 2011 7:30pm EDT

Signage is pictured on the company headquarters of GlaxoSmithKline in west London July 21, 2008. REUTERS/Toby Melville

Signage is pictured on the company headquarters of GlaxoSmithKline in west London July 21, 2008.

Credit: Reuters/Toby Melville

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OAKLAND, California (Reuters) - A U.S. jury rejected GlaxoSmithKline's antitrust claims against Abbott Laboratories over allegations of unfair HIV drug pricing, after Britain's biggest drugmaker had asked for hundreds of millions in damages.

Glaxo accused Abbott of improperly hiking the price of one drug, Norvir, to help it preserve sales growth of one of its other HIV blockbusters, Kaletra.

The case had been in trial in an Oakland, California federal court, and the 10-member jury delivered its verdict on Wednesday.

The jury awarded Glaxo $3.4 million on its breach of contract claims. Abbott spokeswoman Adelle Infante said the company was considering an appeal of that finding.

"However, the jury's awarding of $3.4 million dollars in damages, instead of the $571 million that GSK was asking for, confirms our view that GSK's alleged damages were inaccurate and inflated," Infante said in an email.

Glaxo spokesman Marc Meachem said the company was disappointed that the jury did not agree on the magnitude of Abbott's conduct.

"We continue to believe that Abbott did not act in the best interest of those living with HIV," Meachem said, adding that Glaxo understood and accepted the jury's view.

Norvir plays a key role in AIDS-fighting cocktails because it can boost the effectiveness of other drugs. Glaxo accused Abbott of raising Norvir's price by 400 percent in 2003, as part of an effort to harm competitors whose drugs were dependent on being used in combination with Norvir.

The jury foreman, Michael Friedman, said Glaxo had not proven an essential element for antitrust damages: that a validly defined economic market existed for HIV booster drugs.

A Glaxo strategy document, which indicated that the company considered other non-booster drugs as competitors, hurt Glaxo's case, said Friedman, 63, a former attorney and self-employed life coach. "That was the most persuasive evidence for us," he said.

Several retailers which had been trying the case alongside Glaxo, including CVS Caremark and Safeway, settled with Abbott mid-trial for undisclosed amounts.

Had the jury awarded Glaxo antitrust damages, the amount likely would have been tripled. U.S. antitrust law calls for the scaling up of antitrust damages in the vast majority of cases.

The case in U.S. District Court, Northern District of California is SmithKline Beecham Corp, doing business as GlaxoSmithKline, v. Abbott Laboratories, 07-5702.

(Reporting by Dan Levine; Editing by Richard Chang and Tim Dobbyn)

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