California group questions Glaxo's drug pricing

By Advocate.com Editors

Originally published on Advocate.com April 16 2003 11:00 PM ET

The California Public Employees Retirement System (CalPERS) on Tuesday sent a letter to officials at drugmaker GlaxoSmithKline that questions the company's pricing of its HIV antiretroviral medications. CalPERS, the largest U.S. pension fund, owns about 20.2 million shares of Glaxo stock valued at about $760 million. The group sent the letter at the urging of the AIDS Healthcare Foundation, a California-based group that is currently legally challenging Glaxo's patents and pricing on a number of anti-HIV medications. AHF had been pushing the pension group to divest its Glaxo holdings, but the CalPERS board unanimously rejected that proposal and instead voted to send the letter.
The CalPERS letter asks the company to reevaluate its drug pricing for developing countries and to allow generic drugmakers to make cheap copies of Glaxo's patented medications for use in poor nations. "We request that Glaxo's Corporate Responsibility Committee immediately and continually evaluate the company's humanitarian efforts in light of a changing environment, including its response to the AIDS epidemic," the letter states. "We believe this should include continued evaluation of the means by which Glaxo can offer the lowest possible price on its AIDS therapies without long-term harm to the company and in recognition of the balance you must strike between economics and reputational costs." CalPERS also plans to introduced shareholder resolutions at Glaxo shareholder meetings to urge the company to make its anti-HIV medications more affordable in developing countries.