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 Pharmaceutical Organization.

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.

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