Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Abbott Labs and AIDS


Have we lost sight of the bigger picture as we expand economically?

Today's Wall Street Journal reports that in January, the government of Thailand sent a letter to Abbott Labs (ABT) informing the company that they were preparing to break Abbott's patent on Kaletra, an AIDS drug.

Mongkol na Songkhla, the Thai health minister, said, "We've been talking with the drug companies for four years about reducing the price of treatment, but with no result. Now we have no choice."

Abbott responded by canceling plans to bring new drugs to Thailand, including an updated version of Kaletra called Aluvia-an identical drug that is formulated so as not to require refrigeration.

Ideal in a country with average year-round temperatures between 86 and 93 degrees Fahrenheit.

Not ideal if you can't get it.

The Cost, In Dollars

A year's supply of Kaletra costs about $7,000 at full retail.

Last year, Abbott cut the price of Kaletra in Thailand to $2,200.

Now, it says it will sell the drug for $1,000 if Thailand respects its patent.

Pharmaceutical companies aren't charities. They rely on income from the drugs they develop to research and create new ones. However, Thailand's per capita income is $2,742.

Spending over a third of that on a drug-a lifesaving drug-is, obviously, not an option for most people.

In the Journal article, Miles White, Abbott's CEO, is quoted as saying, "Some would like to make this an HIV issue, but the fact is, it's not."

Melissa Brotz, an Abbott spokeswoman, said that Abbott is willing to "have discussions to come to a conclusion" but will not back down on protecting intellectual property.

Sure, intellectual property is important. But have we lost sight of certain aspects of the bigger picture as we expand economically in America?

The Social Costs

What are the social obligations of wealthy countries to poor ones?

Are there any?

Should there be any?

People seem to think so.

In the States, a number of faith-based investment groups have been sharply critical of Abbott's actions.

Take a quick look at the numbers: over 600,000 Thais live with HIV or AIDS-that's 1.4% of the adult population.

The only other country in the region that comes close is Myanmar, with 1.3%. India: 0.9%, Nepal: 0.5%, Indonesia: 0.2%, and Bangladesh, Bhutan, the Maldives, Sri Lanka, and Timor-Leste all at < 0.1%.

600,000 Thais with HIV or AIDS. Half a world away, right?


A Google search of "Thailand Sex Tourism" turned up 1,190,000 results. Bangkok has the most extensive sex industry on the planet. And visitors arrive there by the planeload from countries across the world to take part.

Some take home HIV.

A March 2007 World Health Organization report titled "HIV/AIDS in the South-East Asia Region" says that 49% of AIDS transmissions in Thailand come from sexual contact between sex workers and their clients.

While 49% is still high, an aggressive education campaign has created a better situation than existed in 1988-the first year data was recorded on the issue-when about 98% of AIDS cases were transmitted between sex workers and clients.

Dr. Nitet Tinnakul from Chulalongkorn University-the oldest university in Thailand-estimates there are a total of 2.8 million sex workers in Thailand, made up of two million women and 800,000 minors under the age of 18.

Prostitution has been technically illegal in Thailand since 1960, though the Entertainment Places Act of 1966, which was ushered in an attempt to increase state revenue through "R&R" expenditures by U.S. armed forces stationed in Vietnam, made it legal (and continues to make it legal) for Thais to render "special services."

Care to hazard a guess as to what those "special services" might include?

Bangkok's notorious Patpong district

The Cost of Doing Business

The Age, a highly-respected Australian newspaper estimates the Thai sex trade brings in $4.3 billion per year-about three percent of the Thai economy.

$4.3 billion a year.

A lot of money, you say?

Depends on how you look at it.

It's less than the federal budget request to Congress for fiscal year 2007, which asked for $13.2 billion for domestic AIDS care-a 7% increase from 2006, and 58% of the total budget request.

It's also a mere 5.2% of Abbott's 2006 global sales of $22.4 billion.

And if no deal can be reached?

The Journal quotes the Chairman of Cipla Ltd., an Indian company that makes a generic version of Kaletra as saying, "We will supply whatever drugs the Thai or other governments may want."

Abbott needs to grow its business in emerging markets as growth in the U.S., Europe, and Japan slows.

Emerging markets-like Thailand-need AIDS drugs.

Stay tuned.
< Previous
  • 1
Next >
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Featured Videos