AIDS Healthcare Foundation Calls Glaxo AIDS Drug Announcement A ``Hollow Gesture''; New Price Remains Seven Times Higher Than Generics.

Business Editors/Health & Medical Writers

LOS ANGELES--(BUSINESS WIRE)--Sept. 6, 2002

The United States' largest AIDS organization described yesterday's AIDS drug price reduction announcement by British-owned GlaxoSmithKline a "hollow gesture" that still leaves the life-saving medications out of reach for millions of HIV-infected throughout the world. AIDS Healthcare Foundation called on GSK to immediately license its key AIDS drugs to generic manufacturers that already produce such drugs at a fraction of the new, reduced price.

"The reduction is meaningless when GSK's Trizivir remains 600% higher than generic prices for life-saving triple-combination treatment," said Michael Weinstein, President of AIDS Healthcare Foundation. "In fact, yesterday's news from London is tragic: GSK's drugs won't be available any time soon to the 8,500 who die daily in poor countries."

Weinstein said the rationale used by the pharmaceutical giant as the basis of its new price "is not credible. GSK said yesterday that it had discovered cheaper ways of manufacturing its products overseas, while generic manufacturers already produce such drugs at profit for as low as $238 per year for a comparable triple-drug combination. In contrast, GSK's new price remains a staggering $1600 per year for the triple-combination needed to treat HIV/AIDS."

Weinstein called on Glaxo to immediately match generic prices, especially since it invented none of the three drugs included in Trizivir. "GSK did not invent these drugs, and they have no legitimate or moral right to continue to put profit above African, Asian, Caribbean and Latin American lives. They and the patent holders must immediately match the generic prices or allow generics throughout the world to license the drugs for widespread access."

Earlier this year, AHF sued GSK for its drug pricing policies after having discovered that GSK invented none of the highly priced drugs in Trizivir. AIDS Healthcare Foundation operates clinics in the US and in Africa that offer anti-retroviral treatment free to needy patients, and has fought to bring down prices in order to expand access to such treatment.

"Yesterday's GSK press release was a cynical attempt at media manipulation in light of the damage GSK has sustained because of our lawsuit," said Weinstein. "The fact is, their products remain too expensive and are unlicensed in the neediest countries and therefore out of reach of those dying of AIDS."

In July, AHF filed a federal lawsuit charging British-owned GlaxoSmithKline with anti-trust violations that could break the manufacturer's monopolistic hold on key AIDS drugs in the United States.

"They lied to the patent office in the 1980's about discovering AZT's ability to treat AIDS, and in doing so secured exclusive rights to manufacture it," said AHF President Michael Weinstein. "AZT was developed with federal assistance in the 1960's, and the National Institutes of Health tested it for HIV use in the 1980's, but Glaxo secured patents on the substance in the'80s and locked competitors out. They then priced AZT at thirty-two times the cost of manufacture, a practice repeated with every new AIDS drug since then."

AHF -- a non-profit that provides medical care to over 12,000 uninsured patients -- is suing for damages created by such artificially high prices. "It's patent piracy that has cost untold numbers their lives and is denying treatment to millions today," said Weinstein, "all in the name of corporate greed."

AHF's lawsuit describes a pattern of such abuse by GSK in marketing AIDS drugs. AHF charges that Glaxo's abacavir (Ziagen) and 3TC (lamivudine) are manufactured and sold pursuant to exclusive licenses from the University of Minnesota and Emory University. "Despite the fact that the drugs were developed with public assistance, GSK is doing all that it can to gouge the public and price the drugs out of reach," said Weinstein.

AHF claims damages as a major purchaser of these medications for its uninsured patients. "Enron's fraud cost jobs and savings," said Weinstein. "GSK's fraud has cost AIDS patients their lives, and has cost the federal and state governments billions of dollars in ill-gotten gain."

AHF in the past has criticized GSK for spending too little on assisting people with AIDS in the developing world, which by Glaxo's own account is about $55 million over the last decade. "That's three-tenths of one-percent of Glaxo's AIDS drug sales," said Weinstein.

In calling for pricing based on cost, Weinstein contrasts the annual price of triple-combination anti-retroviral care charged by GSK, generics manufacturer Cipla, and the Thai government: "Glaxo charges the U.S. government $10,600 annually, Cipla's price is $440, and the Thai's charge $336. Since Glaxo didn't invent or discover AZT, Ziagen or 3TC, what could possibly justify the difference?" In developing nations, Glaxo's so-called preferential prices are also up to double that charged by Bristol Myers Squibb, Merck and Pfizer, said Weinstein.