Lieff Cabraser Heimann & Bernstein, LLP

Introduction

Plaintiffs, a group of retailers which includes pharmacies and GlaxoSmithKline ("GSK"), allege that Abbott Laboratories monopolized the market for AIDS medicines used in conjunction with Abbott's prescription drug Norvir. These drugs, known as Protease Inhibitors, have enabled patients with HIV to fight off the disease and live longer.

Lieff Cabraser serves as co-counsel for the group of retailers. GSK is represented by separate counsel.

Factual Background

In 1996, Abbott introduced Norvir, a standalone Protease Inhibitor used to treat HIV. Around the time of Norvir's launch, it was discovered that, when taken in small quantities with another Protease Inhibitor, Norvir would "boost" the effectiveness of that PI. Norvir is the brand name for ritonavir.

In 2000, Abbott introduced Kaletra, which is a combination therapy pill containing two active ingredients: lopinavir and ritonavir. Ritonavir is used to boost the effects of lopinavir. Kaletra is known as a "boosted" Protease Inhibitor.

In July 2003, a new boosted Protease Inhibitor, Bristol-Myers Squibb's Reyataz, was successfully introduced into the market. Reyataz is designed to be boosted with Norvir, which must be purchased separately. As a result of Reyataz's launch, Abbott began to lose sales of Kaletra.

In November 2003, GSK introduced Lexiva, another Protease Inhibitor drug that competed with Abbott's Kaletra, into the market. Before launching Lexiva, GSK signed a contract with Abbott which allowed GSK to co-promote and co-market Lexiva with Abbott's Norvir.

On December 3, 2003, Abbott instituted a massive 400% increase in the wholesale price of Norvir overnight, while keeping the price of Kaletra, which contains the active ingredient in Norvir, the same. That increase drove up prices and damaged competition in the market.

Summary of Plaintiffs' Allegations

The retail plaintiffs and GSK allege that the Norvir price increase violated U.S. antitrust laws because Abbott exploited its monopoly position as the sole manufacturer of Norvir, the drug that has boosting properties, in order to protect another Abbott drug, Kaletra from competition.

Plaintiffs also assert that by strategically raising Norvir's price at the crucial time of Lexiva's launch, Abbott raised the costs of using Lexiva, Reyataz, and other boosted Protease Inhibitors that competed with Kaletra, all of which are taken with Norvir. Plaintiffs claim that by taking these steps, Abbott was able to restrict competition in the sales of boosted Protease Inhibitors, slow the decline in Kaletra's sales, and maintain its monopoly position.

Litigation History

In a comprehensive, 46-page order, on January 17, 2011, U.S. District Judge Claudia Wilken denied Abbott's motion for summary judgment on plaintiffs' monopolization claim. Trial of the case commenced on February 28, 2011.

Photo: Lieff Cabraser attorneys Brendan Glackin,
Joseph Saveri, and Sarah London. Reprinted and/or posted
with the permission of Daily Journal Corp. (2011).

On March 30, 2010, the jury returned a verdict finding Abbott breached its contract with GSK, but did not find in GSK's favor on its antitrust claims.

However, after opening statements and the presentation of four witnesses and evidence to the jury, the retail plaintiffs and Abbott entered into a $52 million settlement. On August 11, 2011, the Court granted final approval of the settlement, finding it fair and reasonable. 

"The $52 million settlement is a great result for the class members," stated Lieff Cabraser attorney Joseph R. Saveri, who served as Co-Lead Trial Counsel. "It resolves years of hard fought litigation without any additional delay or expense. It ensures that the companies that belong to the class will receive substantial cash payments to compensate them for their economic injuries. We are happy to bring this hard-fought litigation to a successful conclusion, and look forward to the prompt distribution of the settlement to the class members."