Shares of Abbott Laboratories ( ABT) slipped Monday as the company prepared to defend its pricing policy on an HIV/AIDS drug before a federal agency health care panel.

In early afternoon trading, the stock was down 25 cents to $39.70.

Abbott is scheduled to appear Tuesday before a meeting convened by the National Institutes of Health to discuss a petition by a non-profit group, Essential Innovations, which says Abbott has raised the price of the drug Norvir beyond the reach of many consumers.

The group wants the federal government to implement a never-used provision of a 1980 law that would allow the NIH to license to a generic producer the right to make the drug, even though Abbott's Norvir patent is still in force. The law covers companies that have received government aid for their research.

And although a major drug industry index was also down in afternoon trading Monday, there was little expectation that Tuesday's hearing would ripple through the industry.

"I would be quite surprised if the provision of this law would be used by the Bush Administration," said Ira Loss, senior health care analyst at Washington Analysis and a veteran observer of pharmaceutical regulations and politics.

"There are so many cross-currents that are negative to the drug industry that I couldn't say this one issue would affect the industry," Loss said. "There's a three-hour meeting tomorrow. In the short term, the only company that might be affected is Abbott."

Loss added that he "wouldn't attribute today's stock action to the NIH meeting on Abbott." The Amex Pharmaceutical Index of 15 large drug stocks was down 1.70, or 0.6%, to 324.49 in early afternoon trading Monday. The Amex Biotechnology Index was up 1.77, or 0.4%, to 499.14.

"This seems like a fairly unique set of circumstances for Abbott," said Steve Hamill, an analyst with Piper Jaffray, who has an outperform rating on Abbott. (Hamill doesn't own shares; his firm doesn't have an investment banking relationship with Abbott).

"Although the NIH could set a precedent, the circumstances are pretty unique to Abbott," said Hamill, who focuses on medical equipment companies (including some like Abbott and Baxter International ( BAX) that also produce drugs) rather than the pure-play pharmaceutical companies.

Even the worst-case result would seem to have little impact on Abbott. Norvir had less than $100 million in sales last year. The drug's revenue is low enough so that Norvir doesn't show up in the quarterly list of top-selling drugs that Abbott publishes when it releases its earnings reports. For example, in 2003 Abbott identified its top 11 drugs in the United States and/or foreign markets, with the 11th ranked drug having $132 million in sales.

Abbott disputed attempts to apply a provision of a 1980 federal law, known as the Bayh-Dole Act, to Norvir, adding that the law "was never intended to be a tool for controlling pharmaceutical prices." The law was aimed at encouraging cooperation between private and public entities, the company said. The only time the government could revoke the license of a product under patent was if a company that benefited from public collaboration "has not successfully commercialized the invention as a product," Abbott said.

Asserting that its scientists "discovered, developed and funded Norvir," Abbott said that it had received only "a small discovery grant" from NIH totaling $3.47 million, primarily for preclinical work. Abbott spent more than $300 million to develop the drug.

Abbott said it raised its price of Norvir because the company discovered that the drug has an added attraction -- it can boost the activity of other HIV/AIDS drugs. That's why the company raised the price of Norvir to $8.57 a day from $1.71 a day in December. The price increase triggered the petition to the NIH, and critics have complained that Abbott was trying to squeeze more money out of an older drug.

Abbott also pointed out Monday that the new price for Norvir is still less than half of the company's newer HIV/AIDS drug Kaletra, and even cheaper than other drugs in Norvir's class made by Pfizer ( PFE), Bristol-Myers Squibb ( BMY) and GlaxoSmithKline ( GSK). Abbott added that it has taken steps "to enhance access and affordability" for patients who lack health insurance and patients whose insurance doesn't cover the full cost of treatment.

More from Stocks

Week Ahead: Trade Fears and Stress Tests Signal More Volatility To Come

Week Ahead: Trade Fears and Stress Tests Signal More Volatility To Come

3 Great Stock Market Sectors Millennials Should Invest In

3 Great Stock Market Sectors Millennials Should Invest In

Why Millennials Are Ditching Stocks for ETFs

Why Millennials Are Ditching Stocks for ETFs

Trump's 'Space Force' Could Launch a $1 Trillion Industry, Morgan Stanley Says

Trump's 'Space Force' Could Launch a $1 Trillion Industry, Morgan Stanley Says

Abiomed Stock Should Rise Some 12% From Here, Piper Jaffray Analyst Says

Abiomed Stock Should Rise Some 12% From Here, Piper Jaffray Analyst Says