PRNewswire - December 19, 2002

"AHF's motion for preliminary injunction speaks for itself as we believe that Glaxo does not hold a valid patent on AZT and other subsequent derivative AIDS drugs," said Michael Weinstein, AHF's President. "We are asking Judge Hatter to grant our motion invalidating GSK's AZT patent to prevent the 'irreparable harm' -- over 8,500 AIDS deaths worldwide every day -- that is occurring both in this country and throughout the world due in part to GSK's artificial, monopoly pricing on a drug it didn't even invent. GSK's stranglehold on this patent appears even more egregious -- our attorneys have uncovered the proverbial 'smoking gun' -- fraudulent statements on the patent application for AZT, the very first AIDS drug."

AHF's patent piracy lawsuit was first filed after the discovery that Burroughs Wellcome (now GlaxoSmithKline) lied to the United States Department of Commerce Patent and Trademark Office in 1986 in order to secure the patent on AZT (Retrovir), a key component in both of GSK's current best-selling AIDS medications. Burroughs neither invented AZT (which was first created in 1964 as a possible cancer drug), nor showed AZT's efficacy against the human immunodeficiency virus (HIV), yet claimed to the Patent Office that "we have now discovered that ... [AZT] is useful for the treatment of AIDS ..." when it filed for and secured the patent.

AHF's amended complaint also adds GSK's two best-selling AIDS drugs, Combivir and Trizivir -- a primary component of which is AZT -- to the suit.

AIDS Healthcare Foundation -- represented by the law firm of Manatt Phelps & Phillips -- challenged the pharmaceutical giant's right to exclude competition in the markets for its anti-viral prescription drugs AZT, Ziagen and 3TC and to price these drugs well above competitive rates. GlaxoSmithKline (GSK) controls 40% of the lucrative U.S. AIDS drug market. Glaxo's current worldwide market for its AIDS medications is estimated to be approximately $5 billion dollars annually. Combivir and Trizivir, Glaxo's best selling AIDS drugs today, are reformulations of existing AIDS drugs that offer patients the convenience of two-in-one and three-in-one pill dosing.

The initial patent application for AZT and its medicinal use against HIV was rejected by United States Department of Commerce Patent and Trademark Office Primary Examiner Ethel G. Love on January 9, 1986. On July 14, 1986, an attorney for Burroughs (GSK) paid a $390 dollar fee -- roughly the cost today of one patient's one year supply of life-saving generic versions of Glaxo's $10,000 AIDS medications -- to respond to the rejection and amend and secure a patent on AZT. In response, the pharmaceutical company's attorney Donald Brown stated: "With all due respect to the Examiner's allegations of obviousness, it is quite apparent that the NIH and others skilled in the art have been searching for a drug that will work, all apparently with little success to date."

In fact, the NIH had been sent samples of AZT ("Compound S" as it was called) by Burroughs for testing. NIH scientist Hiroaki Mitsuya performed tests in mid-February, 1985 that confirmed that AZT or "Compound S" was active against the HIV virus. Burroughs officials were informed of the results by telephone on February 20, 1985 -- a full seventeen months before Burroughs filed its response claiming that the "NIH and others ... have been searching ... with little success to date."

"They lied to the patent office in the 1980s about discovering AZT's ability to treat AIDS, and in doing so secured exclusive rights to manufacture it," said AHF's Weinstein. "AZT was developed with federal assistance in the 1960s, and the National Institutes of Health tested it for HIV use in the 1980s, 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 services to over 12,000 with HIV/AIDS in the U.S. and Africa -- 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. How many more lives could we have saved if Glaxo had not gouged the government and AHF for almost 15 years now?"

AHF's lawsuit also 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 U.S. tax dollars, GSK is doing all that it can to gouge the public and price the drugs out of reach.

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.

Manatt attorneys Ronald S. Katz, John F. Libby, Robert D. Becker, and Noel S. Cohen represent AHF in this action.

SOURCE AIDS Healthcare Foundation

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