PRNewswire - November 9, 2005

-- In Two Weeks, Patients in Africa, Elsewhere May Be Forced to Scramble to Find Non-AZT Drug Regimens; AIDS Group Alarmed That Patients' Medical Care Will Be Driven by Glaxo's Bottom Line

WHAT: Press Teleconference Call ON WORLDWIDE SHORTAGE OF GLAXOSMITHKLINE's AIDS DRUG, AZT (zidovudine)

WHEN: THURSDAY, November 10, 2005

LOS ANGELES6:00 AMPacific

NEW YORK 9:00 AMEastern

LONDON 2:00 PMUK

UGANDA 5:00 PMUganda

WHO: USA Michael Weinstein, AIDS Healthcare Foundation President

Tom Myers, AIDS Healthcare Foundation General Counsel

AFRICA Bernard Okongo, MD, AIDS Healthcare Foundation's Africa Bureau Chief -- (UGANDA)

Henry E. Chang, Chief of Global Affairs, AHF Global

HOW: dial in information

Domestic: +1.800.486.3317 + participant code # 638 0500

Int'l:+1.303.248.0186 + participant code # 638 0500

LOS ANGELES, Nov. 9 /PRNewswire/ -- AIDS Healthcare Foundation (AHF), the largest AIDS organization in the US which operates free AIDS treatment clinics in the US, Africa, Central America and Asia, will host a press teleconference tomorrow, Thursday, November 10th at 9am Eastern Standard Time (6am Pacific, 2pm UK and 5pm Uganda time -- see dial in information above) to call attention to the worldwide shortage of British drug maker GlaxoSmithKline's (GSK) life-saving AIDS drug, AZT (Retrovir or zidovudine), the very first AIDS drug, which is also a significant component of many AIDS drug regimens today, including GSK's best selling Combivir and Trizivir formulations.

"We are greatly alarmed about this shortage of GSK's life-saving AIDS drug, AZT, and are gravely concerned about the impact of this shortage in Africa and in other resource-poor countries around the globe," said Michael Weinstein, AHF's President. "This shortage mirrors the shortage of Tamiflu, the bird flu drug, and underscores just how the stranglehold created by patent protections by big, multinational drug giants are impeding prudent global public health efforts. GSK knew that demand for AZT in the developing world was increasing, primarily because of programs like PEPFAR. Until very recently, only its AZT was approved and could be used for PEPFAR efforts. The current shortage is due to an increased demand for AZT and shortsighted business forecasting by GSK. Unfortunately, assumptions that the company made did not materialize, which has led to this global AZT shortage. It's interesting to note, however, that GSK's AZT shortage, which will affect thousands in the developing world, will not affect the US, Western Europe and the developed world."

The issue of a worldwide shortage of Retrovir brand AZT or ZDV (zidovudine) manufactured and marketed by GSK first came to AHF's attention last month during a meeting in Lusaka, Zambia, concerning the scale up of an anti-retroviral treatment program funded by PEPFAR. AHF learned that up to 8,000 Zambians are faced with the prospect of having to obtain non-AZT- containing regimens around late November due to the worldwide shortage of Retrovir brand AZT. It is expected that this shortage will also affect the care of patients currently on AZT-containing drug regimens throughout Africa and elsewhere in the developing world.

After hearing of this looming crisis, AHF then learned:

* In mid-September, GSK officials outlined its new manufacturing & delivery times for Retrovir as well as other AZT-containing fixed-dose combinations such as Combivir and Trizivir.

* GSK stated that their official delivery time for existing orders would be extended from 16 to 20 weeks for all products containing AZT.

* Totally new orders now may have delivery times up to 26 weeks -- a full half-a-year from order to delivery.

This is all due to increased demand and limited business forecasting.

GSK's Retrovir came off patent in the US market on Sept 17, 2005 and its European patent ends in March 2006. On Sept 19, the US FDA approved several generic formulations of AZT (listed below) for the US market and for use in PEPFAR-fund ART programs in developing countries. [Note: PEPFAR (President Bush's ambitious $15 billion dollar global AIDS program) will only purchase and utilize FDA-approved medications -- branded or generic -- in its global treatment efforts.]

1) Zidovudine tablets, 300 mg , manufactured by Ranbaxy Laboratories (India)

2) Zidovudine tablets, 300 mg and oral solution, 50 mg/5mL, manufactured by Aurobindo Pharma (India)

3) Zidovudine tablets, 300 mg, manufactured by Roxane Laboratories (US)

However, these generic manufacturers have not yet been able to fully ramp up production much less distribution, so the abrupt transition from GSK's patent-protection on AZT to a more open marketplace will adversely impact HIV/AIDS patients in Africa and other resource-poor countries worldwide.

"From anthrax to bird flu to HIV, this is another example where limiting supply and production to protect property rights is failing public health," said Tom Myers, AHF's General Counsel. "While GSK's actions may make sense for GSK, they mean trouble for potentially thousands of people with AIDS. It is time to recognize that market forces do not trump public welfare, and that a drug company that enjoys a patent or an exclusive license to market a life saving medicine has a duty to ensure its accessibility, even if it means cutting into monopoly profits to guarantee an adequate supply. That is part of the bargain for getting that patent or license. We urge GSK to live up to its bargain and do whatever it takes to resolve this shortage."

"GSK knew that its US patent for AZT would expire soon, and that its European patents will expire shortly. It wrongly assumed that generic competition would rapidly follow," added AHF's Weinstein. "GSK therefore decided not to increase production to meet this demand, leading to a shortage of AZT in the developing world. We are deeply concerned that GSK's business decisions on AZT may result in adverse health outcomes for patients who may lose access to AZT as a result of GSK's desire to protect its profits and beef up its bottom line."

With the advent and widespread use of combined anti-retroviral therapy over the past few years, GSK and other drug companies created fixed-dose combinations (FDC) of AIDS drugs to provide added convenience for AIDS patients by combining two or more AIDS medications into one pill. Such combined formulations also have become an innovative way for the drug industry to extend the life of patent protection for certain drugs. In GSK's case, it created Combivir a two-drug combination consisting of AZT and 3TC (Epivir or lamivudine), which provided patient convenience and also quickly became the most widely used and best selling AIDS therapy in the world. As a consequence GSK's Combivir drove down demand for its older single medication, AZT, making today's end of patent protection for AZT far less significant. By some estimates, GSK sold only about $79 million of AZT in 2004, as compared with its 2004 sales of $1.4 billion for Combivir and its other fixed dose therapy, Trizivir.

AZT was first created with funding from the National Institutes of Health in 1964 as a possible cancer drug, but GSK (then Burroughs Wellcome) obtained the patent on the drug in the 1980s and then priced both it and certain derivative drugs well above competitive rates. As a result, GSK now controls 40% of the lucrative U.S. AIDS drug market, with a current worldwide market for its AIDS medications estimated at approximately $2 billion dollars annually. Combivir and Trizivir, Glaxo's best selling AIDS drugs today, contain AZT and offer patients the convenience of two-in-one and three-in-one therapeutic drug combinations in one pill.

It is expected that the shortage of Retrovir will not impact the rich markets in the developed world (e.g. US, Western Europe, Japan & Australia) and is indeed affecting markets in ROW or "rest of the world." (i.e. countries in Africa, Asia Pacific, Latin America/Caribbean, etc.)

SOURCE AIDS Healthcare Foundation

051109
PR051120

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