April 23, 2007 / 6:50 PM / 12 years ago

Abbott makes AIDS drug offer to Thailand

BANGKOK (Reuters) - Abbott Laboratories Inc. offered to sell a new heat-stable form of an AIDS drug in Thailand, reversing a controversial boycott to protest the country’s use of patent laws to import cheaper medicines.

Abbott, criticized for aggressive pricing of its AIDS medicines in developing countries, has proposed selling the newer heat-stable drug, Aluvia, for $1,000 per patient per year. That matches an offer Abbott made earlier this month to about 40 low- and middle-income countries.

Thai Health Minister Mongkol na Songkhla said on Monday it was mulling the offer, which hinges on a concession that Thailand not issue a compulsory license allowing for purchase or production of generic versions of Aluvia.

It comes weeks after Abbott refused to launch Aluvia in Thailand to protest the government’s January override of an international patent on a similar drug called Kaletra.

“They have proposed some price cuts for Aluvia tablets, but nothing has been concluded,” Mongkol told Reuters.

Mongkol declined to say whether Thailand would give such an assurance to the U.S. drug maker. “You have to wait until the negotiation is complete,” he said.

AIDS activists had criticized the blocking of Aluvia because it does not require refrigeration like Kaletra, eliminating the need for costly cold storage in poor countries.

But now they fear Thailand will bargain away its rights under World Trade Organization rules to issue a license allowing the manufacture of a patented drug without the consent of a foreign patent owner.

“Basically, Abbott is still holding patients hostage in an attempt to force the government to backtrack on the compulsory license,” Paul Cawthorne of Medicins Sans Frontieres (Doctors Without Borders) said.

The AIDS Healthcare Foundation, which runs clinics in developing countries, also chastised the offer, calling it “quid pro quo” and “blackmail.”

Abbott shares were down 48 cents, or about 0.8 percent, at $57.37 in afternoon trade on the New York Stock Exchange.

A SMALL PROFIT

Suburban Chicago-based Abbott will continue to withhold six other drugs from Thailand to protest the use of the compulsory license.

Spokeswoman Melissa Brotz said the company was making the move to assure patient access for the drugs, which brought Abbott $1.1 billion in sales in 2006.

Abbott sells Aluvia or Kaletra to 69 very low income countries, including countries in Africa, for $500 per patient per year and makes no profit, Brotz said. The company generates a “small profit” for its sales to low-middle income countries like Thailand.

Some AIDS activists had suggested Abbott was making the offers in advance of the company’s annual investor meeting taking place this Friday. A group of institutional investors representing about 1 million of Abbott’s 1.5 billion shares outstanding has protested the company’s policies in Thailand.

In 2003, Abbott hiked the price of another AIDS drug called Norvir by 400 percent, sparking protests, including at its annual meeting.

The post-coup Thai government shocked pharmaceutical giants last November when it decided to override the patent on Efavirenz, an HIV-AIDS treatment made by Merck & Co..

Since then, the drug firms have tried to persuade Bangkok to back down in return for cheaper prices.

In February, Merck cut the price of Efavirenz by 46 percent for countries hard hit by HIV-AIDS, including Thailand where 580,000 people are living with the disease.

French drugmaker Sanofi-Aventis has also offered better access to its heart disease medicine Plavix after Thailand announced a compulsory license, the first by a developing country for such a drug.

The details of these offers have not been disclosed, but Medicins Sans Frontieres’ Cawthorne said Thai negotiators should be careful.

“Brazil has taken these kinds of offers and they found themselves paying prices way above other countries because they are locked into these contracts with the companies,” he said.

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