CHICAGO, April 26 /PRNewswire/ -- On the eve of Abbott Laboratories' Annual General Meeting Friday, April 27th, AIDS Healthcare Foundation (AHF), the US' largest HIV/AIDS healthcare, prevention and education provider, which operates free AIDS treatment clinics in the US, Africa, Latin America/Caribbean and Asia, will host a press conference and teleconference Thursday morning in Chicago regarding Abbott's volatile global drug pricing and policies for its AIDS drugs, and the company's recent actions against the Government and people of Thailand. AHF's press conference is Thursday, April 26th at 9:30am Central Time (10:30am Eastern, 7:30am Pacific) in Chicago (St. Clair Room at the Chicago Wyndham Downtown Hotel, 633 N. St. Clair Street 60611. To access the event as a teleconference, dial +1.877.214.0402 access code #841897).
Last week, officials from AIDS Healthcare Foundation testified in Sacramento about Abbott's drug pricing policies in Thailand before the Investment Committee of the California Public Employees Retirement System (CalPERS), which holds nearly $318 million in Abbott stock. AHF officials asked the pension fund to write to Abbott regarding these pricing and access issues. In response, officials indicated that CalPERS would send a letter to Miles D. White, Abbott's Chief Executive Officer and Chairman of the Board, concerning Abbott's recent actions and its AIDS drug pricing and policies in Thailand.
"I received notice from Senior Investment Staff at CalPERS confirming that they would be sending a strong letter to Abbott about the company's recent punitive move to blacklist the people of Thailand from potential access to most of Abbott's newer drugs," said Terri Ford, Director of Global Advocacy for AIDS Healthcare Foundation, who testified at the Investment Committee meeting last week and asked CalPERS to investigate and press Abbott to overturn its blacklist. "While CalPERS clearly has a fiduciary interest in Abbott's bottom-line performance, we are pleased that the Board recognized the urgency of the issue and also showed its humanitarian commitment to socially responsible investing."
Abbott's recent actions in Thailand spurred AIDS and human rights activists worldwide to protest the company and its policies. Abbott's actions in that hard-hit Asian country over the last few months have also generated considerable media scrutiny, and the company's punitive actions against Thailand -- coupled with the largely unflattering media coverage -- raised concerns among Abbott shareholders and investors large and small.
"Over the past several weeks, Abbott has clearly been humbled, bowing to pressure from activists from around the globe. In cutting its AIDS drug prices in Thailand and elsewhere, and through its offer to rescind its blacklist for at least one of its newer drugs, Aluvia, Abbott has backed down considerably," said Michael Weinstein, AIDS Healthcare Foundation's President. "However, we remain disappointed that Abbott is holding fast to its blacklist in Thailand on six other new drugs, and angry that its offer to register the AIDS drug Aluvia is contingent upon Thailand pulling its compulsory license for a generic version of that drug. CalPERS has previously demonstrated a serious commitment to socially responsible investing, and we thank the CalPERS Board for its leadership on this issue."
Three weeks ago, in response in part to worldwide outcry against Abbott, the company announced it would offer its key AIDS drug, Kaletra, to Thailand and 40 other low and lower middle-income countries at a reduced price of US $1,000. On Monday, Abbott announced it would also offer one of its previously blacklisted drugs, Aluvia (a heat-stable version of Kaletra), to Thailand at the US $1,000 reduced price. That offer, however, remains contingent upon the Government of Thailand pulling a compulsory license that allows for a generic version of the drug to be made and sold in Thailand.
In mid-March, Abbott created a firestorm when it first announced it would withdraw all applications for its newer drugs' approval process from Thailand's government review process. That shortsighted move -- which was met with widespread protests and condemnation of Abbott by AIDS and humanitarian activists worldwide -- followed Thailand's announcement in January that it would begin issuing compulsory licenses to allow for manufacturing of cheaper generic versions of several Abbott medications, including Kaletra. Thailand announced those plans following unsuccessful drug price negotiations between Abbott and the Government of Thailand. Abbott bowed to pressure from the activists when it announced the dramatic 55% price reduction (from US $2,200 to US $1,000) for Kaletra in Thailand and 40 or so low and lower middle-income countries on April 10th.
"This whole issue is bigger than Thailand and bigger than HIV/AIDS -- it's really about multi-national drug companies like Abbott using developing world countries to expand their drug markets & sales as the markets in the US and other Western markets dwindle -- Big Pharma's ravenous thirst to expand its global market share," added AHF's Weinstein. "This is a market trend that echoes when tobacco companies stepped up their sales and marketing targeting the developing world -- particularly Asia -- as cigarette sales fell when smoking fell from favor and became more taboo in the U.S. In a sense, Abbott has been like an army scout ahead of Big Pharma's troops in this push for global market expansion, as Abbott has clearly been the most aggressive in its actions and reactions. The Wall Street Journal hit the nail on the head when it recently noted, 'Big drug companies have been pushing sales in emerging markets like Thailand, in part, because of a backlash against expensive brand-name drugs in the U.S. and other Western markets'."
Flexibilities under the World Trade Organization's (WTO) Trade-related Aspects of Intellectual Property Rights (TRIPS) Agreement allow governments to issue compulsory licenses (including payment of royalties to the affected company) without consulting the foreign patent owner if the country deems it necessary and appropriate to protect the health of its citizens. After Thailand first issued the compulsory license for Kaletra earlier this year, Abbott began negotiating price reductions with Thai officials. Thailand appeared to be willing to engage in negotiations, but Abbott initially would only take US $200 off the US $2,200 price (per patient yearly). It was estimated that with Thailand's compulsory license, a generic version of Kaletra could be produced for just over US $1,000 per patient yearly, a price now beaten by Abbott's recent price reduction offers for Kaletra and Aluvia.
Aluvia is one of several drugs for which Abbott had withdrawn applications for regulatory approval for use in Thailand in response to that country's move to issue compulsory licenses for the drugs. The urgent issue for HIV/AIDS patients revolved around the heat-stable form of Abbott's drug, Kaletra, called Aluvia, which was in the process of being approved for use in Thailand, but was one of the pending drug approval applications in Thailand which Abbott revoked. While Abbott has offered to reinstate the application for approval of Aluvia and sell it for US $1,000, the offer remains contingent upon Thailand pulling the compulsory license for the drug.
AIDS Healthcare Foundation officials have previously testified before the CalPERS Investment Board to urge the body to use its clout as a significant institutional investor. In 2003, CalPERS wrote a letter to British drug giant GlaxoSmithKline (GSK) after AIDS advocates (including AIDS Healthcare Foundation) pressed the Investment Committee to inquire about GSK's AIDS drug pricing and limited drug access in the developing world. At that time, the CalPERS Investment Committee heard testimony from AHF officials and GSK attorneys in response to a plea from AIDS advocates that CalPERS, as a significant institutional investor in GSK (US $760 million at that time), assist the AIDS advocates in trying to get specific answers from GSK justifying and explaining its steep prices on its lifesaving AIDS drugs in Africa and the developing world.
CalPERS is the nation's largest pension fund with a current market value of over $242.7 billion (as of close of market 04/24/07). CalPERS has a distinguished history of trying to balance its fiduciary responsibility with socially responsible investments. It was among the first funds to divest holdings to combat apartheid in South Africa, and in recent years it divested holdings in several Southeast Asian countries in response to alleged human rights abuses in those countries. CalPERS also previously wrote to Abbott Laboratories (in December, 2004) with concerns about the safety of Abbott's popular weight-loss drug, Meridia, following public uproar and concerns around Merck's drug, Vioxx. In its letter to Abbott regarding Meridia, CalPERS noted it was writing with "...questions on product safety, market confidence and loss of shareholder value." At that time, CalPERS stated it was "...very concerned regarding the greater implications for the industry and of course our investment in Abbott Laboratories."
AIDS Healthcare Foundation (AHF)
