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AIDS Patient Group Sues Drug Maker Over Pricing

Courts: Organization's lawsuit alleges that GlaxoSmithKline abuses the patent system and overcharges for three of its medications.

July 02, 2002|GINA KEATING | REUTERS

The AIDS Healthcare Foundation, the largest AIDS organization in the United States, on Monday filed a lawsuit against Britain's GlaxoSmithKline, accusing the drug maker of antitrust violations and overcharging for its medicines.

The suit, filed in a Los Angeles federal court, alleges antitrust and patent violations regarding Glaxo's antiviral drugs AZT, 3TC and Ziagen.

The prices for those big-selling drugs "exorbitantly exceed its costs of licensing, manufacturing and distributing," the lawsuit said.

The AIDS Healthcare Foundation is seeking $66 million in damages and to invalidate six patents for the drugs and their applications, contending they were developed with public funds.

"GlaxoSmithKline has engaged in patent piracy for 17 years," foundation President Michael Weinstein said at a Los Angeles news conference.

"Glaxo has made tens of billions of dollars in ill-gotten gains and has deprived millions of people around the globe of treatment," he said.

In Britain, Glaxo expressed disappointment that the AIDS Healthcare Foundation was pursuing its argument in court.

"GlaxoSmithKline does not believe that litigation is the appropriate pathway to resolve matters such as these," a spokesman said.

AZT was developed as a chemotherapy drug in 1964 with U.S. government assistance, and Ziagen and 3TC were discovered at the University of Minnesota and Emory University, the suit says.

Burroughs Wellcome Co., which later merged with Glaxo, began producing AZT in 1983 after the National Institutes of Health asked the company to find an existing drug to treat HIV infections, the suit said.

In 1985, Burroughs filed patent applications for AZT and AZT treatments in Britain and the United States, falsely claiming its scientists had discovered the drug and its application to HIV, according to the suit.

Burroughs also obtained exclusive licenses to manufacture and market 3TC and Ziagen in the early 1990s from the universities, which still hold the patents.

The three drugs make up the first-line "drug cocktail" used to control HIV infections.

Glaxo sells about $2 billion of each of the drugs each year, Weinstein said.

The lawsuit says Glaxo's monopoly has hiked drug prices for the foundation's 12,000 patients in the U.S. and African clinics to $10,600 a year, compared with the $400 paid annually by AIDS patients in countries that sell generic versions.

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