[Ip-health] Pension fund plans letter to Glaxo on AIDS drugs

[Mike Palmedo]

http://www.reuters.co.uk/newsPackageArticle.jhtml?type=businessNews&storyID=419008&section=finance

Calpers plans letter to Glaxo on AIDS drugs
Wed 10 December, 2003 02:22

SAN FRANCISCO (Reuters) - Calpers plans to send a letter to
GlaxoSmithKline next week demanding that the drug maker provide
information about the pricing of its AIDS drugs in developing countries,
a spokesman for the largest U.S. pension fund says.

In the draft letter, the California Public Employees' Retirement Fund,
or Calpers, urges GlaxoSmithKline to provide a report it requested
months ago regarding the voluntary licensing to generic manufacturers of
the company's AIDS drugs.

"The Calpers Board of Administration takes this matter very seriously
and we strongly urge you to comply with our request," said the draft of
the Calpers letter, posted on the pension fund's Web site as part of a
monthly meeting agenda.

"As a large shareowner in your company, we expect our request to be
considered seriously and we expect a constructive and detailed response
from you on this issue."

GlaxoSmithKline representatives could not immediately be reached for
comment.

Calpers spokesman Brad Pacheco said on Tuesday it was likely a company
representative would be at the pension fund's Monday board meeting to
answer questions.

The letter would mark the second one this year that Calpers has sent to
the drug maker at the urging of the AIDS Healthcare Foundation. The
advocacy group wants Calpers to press the company on its AIDS drugs
pricing policies in developing countries.

The influential pension fund, which ranks as the largest in the United
States and has $154 billion in assets, also wants the company to answer
questions regarding a South African ruling that found GlaxoSmithKline
and Germany's Boehringer Ingelheim had violated a 1998 law by refusing
to license their patents to generic manufacturers in return for a
reasonable royalty.

The South Africa's Competition Commission recommended a penalty of 10
percent of annual sales of the firm's anti-retroviral drugs in South
Africa for each year they were found to have violated the Competition Act.

The October ruling, hailed by activists such as the AIDS Healthcare
Foundation, was issued as GlaxoSmithKline announced a further price cut
for its Combivir AIDS treatment in poor countries to 65 U.S. cents a day
from 90 cents.