Abbott to settle lawsuit over HIV drug pricing

By Martha Graybow

NEW YORK, July 31 (Reuters) - Abbott Laboratories (ABT.N) has agreed to pay between $10 million and $27.5 million to settle a lawsuit contending it improperly raised the price of its HIV drug Norvir by 400 percent.

The exact size of the settlement will depend on the result of an appeals court review of the case, said attorney Michael Stocker, an attorney for the plaintiffs. An Abbott spokesman confirmed a settlement had been reached.

The pact was reached on Wednesday and requires approval by a U.S. District Court in Oakland, California, where the class-action lawsuit had been set to go to trial on Aug. 18, Stocker said.

AIDS patients and health plans sued Abbott in 2004, contending the company violated antitrust laws and engaged in unfair business practices by overcharging for Norvir.

Norvir plays a key role in AIDS-fighting cocktails because it can boost the effectiveness of other drugs. According to the plaintiffs, Abbott raised Norvir's price in an effort to harm its competitors whose drugs were dependent on being used in combination with Norvir.

The plaintiffs contended that Abbott increased Norvir's price in hopes of switching patients to a newer medicine, Kaletra, its own combination HIV treatment that contained Norvir.

Abbott has denied any anticompetitive behavior.

"The price adjustment of Norvir was a legitimate response to advances that Abbott scientists made in treating HIV and captured the fair value of its new use as a booster" used in combination with other drugs, Abbott spokesman Scott Stoffel said.

He said the company views the settlement as being "in the best interests of both parties."

Under the agreement, there will be no trial, said Stocker, of law firm Labaton Sucharow, which represents the Service Employees International Union Health and Welfare Fund in the suit.

Instead, the parties have agreed to request an appeals process to start immediately to resolve several difficult legal questions in the suit, he said.

If the plaintiffs win the appeal, Abbott could be forced to pay up to $27.5 million, he said. At a minimum, Abbott would pay $10 million even if the company prevails on appeal.

Abbott's Stoffel said the pact calls for the settlement funds to go primarily to AIDS-related charities. (Reporting by Martha Graybow; editing by John Wallace)