Abbott's New Blackmail with a Smile
Brook K. Baker, Health GAP
April 21, 2007
Claiming to have backed away from confrontation with Thailand over the Thai
decision to issue a compulsory license for Kaletra/Aluvia (WSJ April 23,
2007), Abbott has instead resorted to "blackmail with a smile" by insisting
that it will make the new heat-stable form of lopinavir/ritonavir (Aluvia)
available for $1000 per patient per year, but only if Thailand drops its
compulsory license. This announcement is unsatisfactory both because it
continues to condition registration and access to Aluvia on Thailand's
relinquishment of its lawful government-use license for Kaletra/Aluvia and
because it fails to address the six other new products that Abbott
unilaterally removed from the registration pipeline in Thailand.
Last week, under an intense barrage of international pressure from Thai
activists who organized a consumer boycott and from international allies
who are organizing protests by Abbott shareholders and U.S. doctors, Abbott
announced that it had slashed its previous low- and lower-middle income
price for Kaletra and Aluvia to only $1000 instead of the previous
benchmark of $2200 set at the International AIDS Conference in Toronto last
August. Abbott's decision followed shortly on the heels not only of
growing global protests but also of announcements of heat-stable forms of
Kaletra being manufactured by India producers (Cipla and Emcure) at prices
substantially lower than Abbott's announced "access" price.
Abbott's insistence that Thailand drop its license for public,
non-commercial use in essence asks Thailand to disarm itself with respect
to its ability to access cheaper generic forms of lopinavir/ritonavir once
generic manufacturers receive WHO prequalification and begin large-scale
production. Abbott is temporarily undercutting the early-stage generic
price, but in the long run the generic producers will always be able to
sell at a lower price given their lower manufacturing costs even when
meeting international quality standards.
Thailand needs to maintain its future flexibility to source
lopinavir/ritonavir more cheaply even if it decides to temporarily buy
Aluvia from Abbott. Although Thailand is likely initially to import
generic lopinavir/ritonavir from India, under its license it will also
retain flexibility to manufacture domestically in the new GMP-certified
manufacturing facility being built by the publicly owned Government
Even if GPO manufactures medicines at a profit (as the India generic
producers will also do) such production will still be for "public,
non-commercial use" under the definitions of the WTO TRIPS Agreement. The
key term is "use," not "no-profit, non-public-sector production" as some
industry apologists are arguing (Bangkok Post, Peerapan Tungsuwan and
William McKay, April 23, 2007). The government of Thailand has indicated
that Abbott will still have exclusive access to private sector sales in
Thailand. The government will only "use" the generic versions of
Kaletra/Aluvia within Thailand's robust publicly insured health sector that
intends to provide medicines for 107,000 out of 580,000 Thai's living with
HIV/AIDS this year. An estimated 8,000 to 20,000 of those patients could
benefit from access to lopinavir/ritonavir according to recent reports.
Blackmail is blackmail whether it is announced with a smile or not.
Activists in the U.S. and Thailand have made clear that they will not be
dissuaded by Abbott's desperate scramble for favorable publicity in advance
of its annual shareholders' meeting in Chicago on April 27. Instead, U.S.
activists will continue with their global day of action holding protests at
Abbott facilities in Worcester, Massachusetts, New York City, Chicago,
Washington, D.C., and Austin, Texas. They will be joined with allies in
the U.K., Germany, France, and elsewhere who are demanding a full
stand-down by Abbott.