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Drugs: the implications of pricing freedom

In the USA, a pharmaceutical company raised the price of one drug five-fold.

In the USA, pharmaceutical companies have complete freedom to set the price when they market a drug, and to change it as and when they please. One price increase caused an outcry in the USA last year. In December 2003, Abbott raised the price of Norvir° (ritonavir) in the USA by 400%. It is a drug often used in combination with other HIV protease inhibitors in the treatment of AIDS, in order to enhance effectiveness. The fixed combination of the protease inhibitors ritonavir + lopinavir (Kaletra°), also made by Abbott, is now cheaper than its competitors' combinations of HIV protease inhibitors + Norvir°. The massive price increase provoked outrage in the USA and worldwide. There are fears that pharmaceuticals firms might be put off developing new HIV protease inhibitors, the market for which is now controlled by Abbott. Several complaints have been filed against the company. But ultimately, in 2004, the suits were either dismissed by the court or withdrawn, because in fact, the Norvir° price increase is not illegal in the USA: it is the consequence of the freedom of pricing principle. An example that should cause those who advocate a similar freedom in Europe to think twice.

©Prescrire March 2005

Source: "Le prix de la liberté des prix des médicaments : l'exemple de Norvir° aux États-Unis" Rev Prescrire 2005 ; 25 (259) : 221-222.

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