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social responsibility vs. drug profits

Friday 4 May, 2007

Abbott, activists tangle
Drug giant’s chief defends response to Thailand patent break

By Bruce Japsen
Published April 28, 2007

Despite a flurry of international criticism, Abbott Laboratories will not back away from its controversial decision to withhold drug applications in Thailand, Chief Executive Miles White told AIDS activists at the company’s annual shareholder meeting Friday.

White lashed out at the activists for being misinformed about Abbott’s situation as he reiterated the North Chicago-based company’s determination to protect its intellectual property. His comments were his strongest since the medical products giant became embroiled in a dispute with Thai officials over pricing of the AIDS drug Kaletra and Thailand’s efforts to make generic copies of the medicine that effectively would break Abbott’s patent protection.

Thailand earlier this year said that it could not afford the price Abbott charges for Kaletra, and planned to use a provision of international trade law that would have allowed it to skirt Kaletra’s patent protection and choose other companies to copy the drug. That move represented a significant challenge to Abbott’s patent protections.

Abbott countered by announcing that it would not register any newly developed drugs in Thailand, depriving that country of a new form of Kaletra that — in contrast to the current form — does not require refrigeration.

AIDS activists have condemned Abbott’s action as “blackmail,” suggesting that withholding the Kaletra that does not require refrigeration is putting patients’ health at risk. Given Thailand’s hot climate and underdeveloped health-care infrastructure, many people do not have access to Abbott’s AIDS drugs, the activists charge.

“I think we’ve done a lot more than you give us credit for,” White said in response to AIDS activists as he addressed more than 1,400 people at the company’s sprawling Lake County headquarters.

White suggested that Thailand’s government is aiming to ignore patent protections on all kinds of drugs by issuing compulsory licenses under international law. “I do think there is a hidden agenda. I think the agenda is to set the precedent with compulsory licensing to compulsory license numerous drugs,” he said.

Activist groups had publicized plans to speak at Abbott’s annual meeting while also protesting and picketing Thursday and Friday at company facilities around the world. More than 100 people also protested at Tribune Tower, headquarters of Tribune Co. White is a board member of Tribune Co., which publishes the Chicago Tribune.

At the annual meeting, however, stockholders applauded White, and at times shouted down the handful of activists who lined up to protest Abbott’s actions in Thailand.

Among the protesters was Jon Ungphakorn, a former member of Thailand’s senate and a longtime AIDS activist who accused Abbott of holding drugs “for ransom,” and making “hostages” of patients in Thailand. “Abbott is certainly no ‘Promise for Life’ in Thailand,” Ungphakorn said, a reference to the company’s slogan.

White claimed some activists not at the shareholder meeting had even visited his house last Halloween. “Some of the colleagues that came with you that Trick or Treated at my house and harassed my neighbors and so forth … that’s not advocacy. Doing what we did is advocacy. Because we did it with our own money.”

Last year the company, White said, spent more than $300 million on humanitarian relief, patient assistance programs and AIDS-related programs that helped “millions.”

He also said that submitting the tablet form of Kaletra for approval in Thailand would not make sense from a business standpoint.

“Why would we submit” the new drug for approval, White asked, if Thailand plans to make generic forms of patented Abbott drugs anyway?

In response to Thai officials who had concerns about Kaletra’s price, Abbott cut the price to $1,700 a year from $2,200 last fall. Thai officials, however, issued a compulsory license for Kaletra and certain other companies’ drugs in January, prompting Abbott’s decision to not launch new medicines in that country.

Earlier this month Abbott lowered the price of Kaletra to $1,000 a year in Thailand and more than 40 other developing countries.

MM comment: This is a tremendously difficult issue for which there are no easy answers. In my mind it boils down to costs, & what is the value to the company & government to make a deal to make the drug available to its citizens. Cost for these kinds of drugs are difficult to determine because so much R&D is invested, it’s almost like fixed overhead. For a government to ask that these drugs be provided @ cost is a specious request because determining a real cost is so difficult to do. Alternatively, to continue to wrangle only hurts patients, so there are vested interests in both sides to reach a compromise. For the government to unilaterally make a move won’t wash. For the company to cave in sets a bad precedent as well. This has been & will continue to be argued. Your comments are welcomed.

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