June 24, 2014 / 5:56 PM / in 4 years

UPDATE 1-U.S. court refuses to undo gay rights ruling in pharma case

(Adds company statements, case background)

By Dan Levine

SAN FRANCISCO, June 24 (Reuters) - A U.S. appeals court on Tuesday refused to disturb an order extending landmark constitutional protections for gays and lesbians, an issue which arose when a gay man was excluded from jury service at a trial between AbbVie Inc and GlaxoSmithKline Plc.

The San Francisco-based 9th U.S. Circuit Court of Appeals in January had found that the man was improperly excluded because of his sexual orientation. The court’s January opinion, from a three-judge panel, heightened constitutional protections judges in several Western states must now apply when evaluating laws that curtail gay rights.

The court ordered a new trial between Glaxo and AbbVie, an Abbott Laboratories spinoff. AbbVie requested that the full court rehear the order for a new trial but leave in place the pro-gay rights language. On Tuesday, the 9th Circuit refused.

AbbVie spokesman Dirk Van Eeden said the company was studying the latest decision. Glaxo spokesman Marc Meacham said the Glaxo was “gratified that the court has once again ruled in our favor and sustained the order for a new trial.”

The case involved Abbott’s pricing of HIV medications, a contentious issue in the gay community. Glaxo accused Abbott of improperly increasing the price of one drug, Norvir, to help it preserve sales growth of one of its other HIV blockbusters, Kaletra.

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.

Glaxo had sought $571 million, but after a four-week trial came away with only a $3.5 million jury award.

The 9th Circuit currently has 29 full time judges, and three of them publicly dissented from the court’s decision on Tuesday.

Judge Diarmuid O’Scannlain wrote that the U.S. Supreme Court did not mandate higher constitutional protections for gays and lesbians in the manner decided by the 9th Circuit.

What started as an antitrust dispute between drug companies “has morphed into a constitutional essay about equal protection and sexual orientation,” O’Scannlain wrote, adding that the 9th Circuit got the case “egregiously” wrong.

The case in the 9th U.S. Circuit Court of Appeals is Smithkline Beecham Corp dba GlaxoSmithKline vs. Abbott Laboratories, No. 11-17357. (Reporting by Dan Levine; Editing by Grant McCool)

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