In the latest skirmish in an intensifying battle over the price of an AIDS drug, patient advocates appealed to federal regulators this week to force a major drug company to roll back a substantial price increase.

The National Institutes of Health held a hearing Tuesday in Bethesda, Maryland, on whether it should compel Abbott Laboratories to drop the price of Norvir, which the company boosted by 400 per cent last December. The groups seeking the price decrease argued that a little-noticed law gives the NIH the power to force a price reduction because Abbott had used federal dollars to help develop the drug.

The hearing was held amid an ongoing protest of the price increase by several hundred doctors, including physicians at the Fenway Community Health Center in Boston.

The protest has resulted in physicians boycotting Abbott's drugs, shunning its sales representatives, and severing research relationships.

Abbott executives responded that they are attempting to earn a fair return on a medicine originally designed to be taken many times daily but now typically used only once or twice a day to enhance the effectiveness of other companies' drugs.

As part of their petition, the patient advocates have asked the NIH to allow other companies to make and sell Norvir in an effort to reduce its cost.

In rare cases, the 1980 Bayh-Dole Act lets the government step in and grant licenses for other companies to make the products it helped finance. If the government should do that with Norvir, it would be the first time that had been done with a privately patented drug.

James Love -- president of Essential Innovations Inc., a nonprofit group in Washington, D.C. -- charged that the cost increase is an abuse of pricing practices. Robert Huff, of Gay Men's Health Crisis in New York, contended that because Norvir is used as a booster with many other AIDS drugs, Abbott raised the price in an effort to increase the cost of using other firms' drugs.

The price increase ''will inhibit innovation, restrict research, limit medical options, and hurt people with HIV," Huff said.

Dr. Jeffrey M. Leiden, president of the Pharmaceutical Products Group at Abbott, told the meeting at the NIH that despite the 400 percent increase in December, from $1.71 per day to $8.57 per day, Norvir remains one of the least expensive AIDS drugs.

The company needs to earn back the approximately $300 million it spent developing Norvir, he said. NIH provided a basic research grant for the drug of about $3.5 million.