Abbott to cut AIDS drug price in 40 poor countries

CHICAGO (Reuters) - Abbott Laboratories Inc., widely criticized for aggressive pricing of its AIDS medicines in developing countries, said on Tuesday it would slash the price of a key AIDS drug by more than half in more than 40 poor countries.

Abbott said it would offer its drug Kaletra at a price of $1,000 per patient per year -- a price lower than generic versions -- to governments of more than 40 countries with low and low-middle income, as defined by World Bank criteria.

The move is an apparent attempt to cool tensions with its critics, amid a spat with the government of Thailand over AIDS drug pricing.

The company has had a worse-than-average reputation with AIDS patient groups, notably after a 400 percent price hike it set a few years ago for another AIDS drug. Advocates were mixed on the significance of the Kaletra announcement.

"Abbott was the most hard-nosed opponent we faced in a very long time," said Michael Weinstein, president of the AIDS Healthcare Foundation, which runs treatment clinics in the developing world. He called the move "an historic victory" for AIDS activists.

But another prominent patient group and provider of medicines said it was too early to declare victory, because an announced price cut does not always translate to real availability of medicines.

"We've seen these announcements before that haven't really led to anything -- particularly in this way, when it is done as a result of pressure from civil society and other groups," Dr. Buddhima Lokuge, U.S. manager for Doctors Without Borders, said.

Several weeks ago, Abbott said it would stop launching new drugs in Thailand, including an important new AIDS drug, to protest the Thai government's decision in January to override international drug patents. The Abbott announcement sparked protests from AIDS advocates.

Lokuge said earlier announcements on price breaks didn't always translate into medicines on the ground, in part because the company didn't register the drug in certain countries.

Kaletra, the most widely used of a type of AIDS medicines called protease inhibitors, is especially effective in patients who have become resistant to HIV, the virus that causes AIDS.

"With this action, we've removed HIV pricing from the debate," Abbott spokeswoman Melissa Brotz said. "We hope there will be a constructive, thoughtful debate on the real issue: how to continue to enhance affordability of medicines and preserve a system that society needs to continue to bring forward new medicines."

World Health Organization director-general Margaret Chan welcomed the price cut.

"We are seeing many more patients develop resistance to first-line antiretroviral drugs who will require second-line drugs," she said. "Clearly a high number of people in 40 countries will benefit."

The dispute with Thailand continues, and the company said it still refuses to offer a newer form of Kaletra called Aluvia in Thailand.

AIDS activists widely criticized the blocking of Aluvia, because it is a heat-stable form of Kaletra, eliminating the need for costly cold storage in resource-poor countries.

In 2003, Abbott raised the price of another AIDS medicine called Norvir by 400 percent, sparking protests, including one at its annual meeting.