Glaxo sued Abbott for increasing the price of Norvir, used as a booster in many HIV cocktails. At the same time, Abbott didn't raise the price of Kaletra, which contains Norvir. That allowed Kaletra to undercut Glaxo's Lexiva, which requires Norvir to be effective.
Glaxo claims that it cost 75% more to use Lexiva than Kaletra, and of course Glaxo wasn't seeing any of that higher price since it was going to Abbott for the Norvir booster. Glaxo was seeking $570 million in damages, which could have been tripled as a punishment.
The jury didn't buy it. They only awarded a measly -- on the scale of things -- $3.5 million to Glaxo, finding that Abbott had breached the companies' contract.
Retailers including Safeway
What's the lesson here? If your drug requires another company's drug to be effective, it's probably best to team up, something HIV drugmakers seem to have figured out. Gilead Sciences
This war might be over -- assuming neither side appeals -- but Glaxo can of course strike back by developing new medications, taking away Abbott's business the more traditional way.
Johnson & Johnson and Pfizer are Motley Fool Inside Value recommendations. Gilead Sciences is a Motley Fool Stock Advisor recommendation. GlaxoSmithKline is a Motley Fool Global Gains pick. Johnson & Johnson is a Motley Fool Income Investor pick. Motley Fool Options has recommended a diagonal call position on Johnson & Johnson. The Fool owns shares of Abbott Laboratories, GlaxoSmithKline, and Johnson & Johnson. Motley Fool Alpha LLC owns shares of Abbott Laboratories and Johnson & Johnson.