OraSure Must Continue To Supply OraQuick to Abbott, Arbitration Ruling Says
An arbitrator on Monday ruled that OraSure Technologies must continue to supply its OraQuick rapid HIV test to Abbott Laboratories, although it also may sell the test on its own or in collaboration with other companies, the Allentown Morning Call reports (Kennedy, Allentown Morning Call, 2/25). Under a 2002 deal between OraSure and Abbott, Abbott has had the right to market OraQuick primarily to hospitals and physicians, while OraSure has had the right to work with the public health and criminal justice markets (Kaiser Daily HIV/AIDS Report, 6/17/02). The 2002 deal was reported to guarantee OraSure at least $4 million in Abbott's OraQuick sales in 2003, and OraSure officials initially "hailed" the arrangement, according to the Morning Call. OraSure said that the deal would allow the company to focus on producing the tests, while Abbott would "marshal its massive sales" force to sell it, according to the Morning Call. However, OraSure late last year accused the company of falling short on sales quotas and terminated the contract, with OraSure on track to receive less than $2 million of the $4 million it expected from Abbott' sales by the end of last year, the Morning Call reports. Abbott denied the allegations, saying that a secondary FDA approval of the test had come later than expected and limited the test's appeal. The case went to arbitration when Abbott refused to accept the termination of the contract, and the two companies continued to work together during the proceedings. OraSure CEO Mike Gausling said that the company has been developing its own sales force in major cities and, following the arbitration ruling, is considering seeking an additional distribution partner to sell directly to doctors' offices, as opposed to hospitals, the area in which Abbott is strongest (Allentown Morning Call, 2/25).This is part of the KHN Morning Briefing, a summary of health policy coverage from major news organizations. Sign up for an email subscription.