Cheaper and more accessible HIV drugs, as well as progress in developing its medical-device business, helped propel shares of Abbott Labs
Showing off at this week's 16th International AIDS Conference in Toronto, Abbott announced on Sunday that it will expand its preferential pricing program for HIV medications. An additional 45 countries, including "low-income" nations such as India and Pakistan and "lower-middle-income" countries such as China, will be added to its existing roster of 69 least-developed nations. Under Abbott's program, its AIDS pill Kaletra is available to these poorest countries for $500 per patient per year, as opposed to the $7,500 annual per-patient expense in the United States. The newly added countries will pay $2,200 annually per patient, reduced from their current $3,300 or $5,000 expense. The company also said that it plans to make Aluvia, the newer tablet form of Kaletra that does not require refrigeration, more widely accessible, and that it is developing a pediatric form of the drug.
Abbott and other pharmaceutical companies have drawn criticism those who believe the drug industry is not doing enough to make its medications available to patients in need around the globe. At the company's annual shareholder meeting in April, protesters criticized Kaletra's pricing. That criticism will likely continue if critics believe that the price remains too high, or that the company can do more.
It's not clear how much more the company can do without negative effects for its bottom line. Sales of Kaletra represented $1.01 billion of the company's total $22.3 billion last year. While Abbott has not revealed the drug's production cost, it's believed that the $500 annual price represents a loss for the company, while the $2,200 cost does not. Reuters also reported yesterday that China is supposedly asking for a $400-per-patient annual price, while Abbott is requesting $1,000.
On another front, Abbott announced on Monday the enrollment of the first participants in a new trial for continued evaluation of its drug-coated stent, Xience V, which it acquired from Guidant earlier this year. The study will enroll 1,125 patients, who will be monitored for signs of ischemia-driven target vessel failure at 270 days and followed for a total of five years. Abbott plans to present existing data from prior trials at a cardiology conference in Spain in September, and it hopes to introduce the therapy in Europe later this year.
Generating increased goodwill while potentially expanding its HIV drug market, together with marking progress in its new vascular stent business, proved to be a potent formula for lifting Abbott's shares early this week. The news might make you want to consider making Abbott your lab partner, too.
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