Nov. 9 (Bloomberg) -- GlaxoSmithKline Plc, the world's largest producer of HIV medicines, sued Abbott Laboratories over its pricing of a drug that helps boost the performance of other treatments for AIDS.

Glaxo claims Abbott raised prices on Norvir, a boosting agent for protease inhibitors, without increasing the price of Abbott's medicine Kaletra, which includes Norvir. The higher cost kept Norvir from being used with other drugs, including Glaxo's Lexiva, at a competitive price, according to the complaint.

The lawsuit, filed today in federal court in Oakland, California, is the latest against Abbott over its decision to quadruple the price of Norvir in 2003. Patients and retailers also have sued. Abbott said it increased the price to reflect Norvir's role as a boosting agent instead of a standalone drug; Glaxo says Abbott just wanted to direct sales to Kaletra.

``Abbott's anticompetitive scheme protected Kaletra against new competitors that threatened its market dominance, in violation of the antitrust laws,'' London-based Glaxo said in the complaint.

Abbott, based in Abbott Park, Illinois, called the lawsuit ``frivolous,'' and said that Glaxo's Lexiva had five price increases since Abbott raised the cost of Norvir.

``Norvir actually reduces the price of Lexiva significantly -- the combined cost of Lexiva and Norvir is less than Lexiva alone,'' Abbott spokesman Scott Stoffel said today in a telephone interview. ``This simply proves the value of Norvir in enhancing the effectiveness of other protease inhibitors, the reason we repriced the medicine.''

Approved in 1996

Norvir, first approved in 1996, was originally sold in 1,200-milligram doses as a standalone drug, said Abbott spokeswoman Melissa Brotz in a telephone interview. Abbott researchers discovered that it was better used at one-twelfth the dose to increase the power of other protease inhibitors so patients wouldn't have to take so many pills.

The smaller dose was selling at one-twelfth the price, or $1.71 a day, until Abbott increased the price to $8.57 a day, Brotz said. Bristol-Myers Squibb Co. and Merck & Co. also use Norvir with their AIDS drugs.

The price increase came just two weeks after Glaxo introduced Lexiva, according to Glaxo spokeswoman Nancy Pekarek. She said the price of Lexiva went from $19.43 to $33.15 a day, while Abbott's Kaletra -- which combines a protease inhibitor and Norvir in a single pill -- stayed at $18.76 a day.

Glaxo Sales

``If we hadn't been priced significantly higher and Kaletra wasn't priced lower, we believe we could have been competitive in the market,'' Pekarek said in an interview today. She said Glaxo paid Abbott an undisclosed amount of money for the use of Norvir with Lexiva. The medicine and a related drug generated $242 million in global sales last year for Glaxo, including $136 million of U.S. sales, she said.

Kaletra sales rose 15 percent to $338 million in the third- quarter, including $136 million in the U.S., Abbott said Oct. 17.

A group representing patients and third-party payers sued Abbott in 2004. That suit is scheduled for trial in Oakland in June. Retailers including Safeway Inc., Walgreen Co. and Kroger Co. sued Abbott on Oct. 26 in Oakland.

Pekarek said Glaxo was prompted to file the suit by a recent Wall Street Journal article outlining internal Abbott documents that indicated the company considered that its actions could invite federal investigations and tarnish the company's reputation.

``It convinced us of Abbott's activities against patients and business parties,'' Pekarek said. ``We saw that as a breach of contract and decided to file suit.''

The case is SmithKline Beecham Corp. v. Abbott Laboratories, 07cv5702, U.S. District Court for the Northern District of California (Oakland). The case going to trial in June is In Re: Abbott Labs Norvir Antitrust Litigation, 04cv1511, also in Oakland.

To contact the reporters on this story: Beth Jinks in New York at bjinks1@bloomberg.netSusan Decker in Washington at sdecker1@bloomberg.net.

Last Updated: November 9, 2007 19:41 EST