Info Service on Health Issues (May 07/01)
Abbott sought compulsory licence while criticising Thai licence
Thailand decided to issue a compulsory licence on Abbott’s patents on
the AIDS drug Kaletra, a vigorous public relations assault and lobbying
attack on the Thai government followed. However, none of the news reports
related Abbott’s own attempts to obtain a compulsory licence in the
article below describes Abbott’s efforts to obtain a compulsory licence
for itself. It is reproduced with permission from South-North Development
Monitor (SUNS) #6246, 7 May 2007.
Health: Abbott itself sought compulsory license, while criticising Thai
By James Love*,
Washington, 3 May 2007
The drug company Abbot Laboratories
has strongly criticized the Thai government for recently issuing compulsory
licenses on drugs. But during the same period, when the shoe was on
the other foot, Abbott was asking for a compulsory license for itself.
On 12 January, Abbott lost a bid in a US District Court (the Western
District of Wisconsin) for a compulsory license on a patent held by
Innogenetics, Inc. that a judge and jury said Abbott infringed to manufacture
and sell Hepatitis C virus (HCV) genotyping test kits.
The compulsory licensing request was an effort to avoid an injunction
that would prevent Abbott from using the Innogenetics patent without
permission from the patent owner.
Abbott was using a new legal doctrine in US law set out in a May 2006
US Supreme Court decision, eBay Inc v. MercExchange, L.L.C., which makes
it harder to obtain injunctions when a Court-ordered royalty payment
is more equitable or less damaging to the public interest.
The term "compulsory licensing" is used to describe a wide
range of legal mechanisms to provide non-voluntary authorizations to
use patents, including for example, government or crown use provisions
in patent laws (such as the dispute in Thailand involving the use of
Abbott patents on the AIDS drugs ritonavir and lopinavir), remedies
to anti-competitive practices (such as the 2005/2006/2007 Italian and
2003 South African cases involving refusals to license and excessive
pricing), or compulsory licenses justified on public health or public
The term also describes cases like this, where a judge is asked to give
a defendant in an infringement case the right to use a valid patent,
in return for a royalty approved by the court.
The District Court rejected the Abbott request and issued the injunction
on January 12. But on January 19, Abbott obtained a temporary stay from
the Federal Circuit, and began its appeal of the District Court's decision.
Meanwhile, on January 29, the Ministry of Health (MOH) in Thailand announced
that it was issuing a compulsory license on Abbott's patents on the
AIDS drug Kaletra (a combination of ritonavir and lopinavir). At this
point, Abbott continued its appeal in the Innogenetics case, while mounting
a vigorous public relations assault against the Thai MOH.
None of the subsequent news reports about the Thai action mentioned
Abbott's own efforts to obtain a compulsory license in the US.
On the Abbott/Innogenetics case, in September 2005, Innogenetics filed
a lawsuit claiming that Abbott was infringing claims in Patent No. 5,846,704
("the '704 patent") concerning a method of genotyping the
Hepatitis C virus ("HCV"). On September 1, 2006, a jury agreed
with Innogenetics. Innogenetics then sought an injunction to prevent
Abbott from using the patent to manufacture and sell HCV genotyping
Abbott sought to prevent Innogenetics from obtaining the injunction,
arguing that the court should grant Abbott a non-voluntary authorization
to use the patent, under the four-part standard set out by the May 15,
2006 US Supreme Court Decision in eBay Inc v. MercExchange, L.L.C.
Before granting an injunction to enforce a patent, the party asking
for the judgment must demonstrate that it has suffered an irreparable
injury; that other possible legal remedies, including the payment of
royalties, are inadequate to compensate for that injury; that considering
the balance of hardships between the plaintiff and defendant, a remedy
in equity is warranted; and that the public interest would not be disserved
by a permanent injunction.
In asking the District Court to reject the injunction and grant a non-voluntary
authorization to use the patent, Abbott said that the patent owner's
rights could be protected by the payment of a royalty, and that the
public interest would be affected adversely if persons with Hepatitis
C could no longer have access to the services provided by Abbott products.
Abbott's temporary stay of the District Court injunction was lifted
by the Federal Circuit on March 8, but Abbott continues its appeals.
Abbott's Kaletra product, which combines two protease inhibitors, ritonavir
and lopinavir, was invented by Abbott on a government grant. Ritonavir
and the combination product ritonavir+lopinavir (LPV/r) has generated
billions of dollars in global sales for Abbott.
In January 2007, before Thailand issued the compulsory license, Abbott
was reportedly charging more than 11,500 baht per month for the drug,
or nearly $ 4,000 per year, a price far beyond the ability of the Thailand
government to afford for it's large AIDS population.
The Thailand government's January 29, 2007 decision to issue a compulsory
license on Abbott's Kaletra patents followed two earlier compulsory
licenses (Merck's efavirenz, and Sanofi's clopidogrel), and set off
a well- financed public relations and lobbying attack on the Thailand
government, featuring a large number of pharmaceutical industry supported
groups and industry-funded consultants and "experts".
On March 14, a story in the Wall Street Journal reported that Abbott
had retaliated by announcing that it would pull the registration of
seven new products (including a new formulation of Kaletra) from the
An Abbot spokeswoman was quoted as saying that because the Thai government
"decided not to support innovation by breaking the patents, Abbott
will not submit applications or register new medicines and will withdraw
current applications in Thailand until the government changes its position."
Abbott has withdrawn its applications for seven medicines, including
a new formulation of Kaletra, the AIDS treatment, according to Ms. Smoter.
Abbott notified the Thai government a few weeks ago, after talks between
the two sides broke down, a person familiar with the matter said.
On April 10, Abbott cut the price of Kaletra and its new heat stabilized
version marketed under the trade name Aluvia to $1,000 per year for
NGOs and governments of 40 countries, in order to compete with the price
of generic products from India. Abbott claimed that the price cut was
the result of an agreement with the WHO, which issued a statement welcoming
the price cut.
The price cut, however, will not be automatically available, and comes
The $1,000 price was about $300 below the initial generic offer, but
probably 5 times the price at which generic suppliers could produce
the product (assuming the finished product can be manufactured for less
than $400 per kilo, as is the case for Triomune), if they have sufficient
economies of scale and some improved processes.
Abbott also said that it would not register its new products, including
a new heat-stabilized version of Kaletra, marketed by Abbott under the
trade name Aluvia, unless Thailand agreed to not issue further compulsory
Throughout this dispute, Abbott has not been asked to reconcile its
own efforts to obtain a compulsory license on the Innogenetics patents
with it's harsh rhetoric about the Thai compulsory licenses.
(* James Love is Director of Knowledge Ecology International based in
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