•  HOME 
  •  BOOKS 
  •  WWP 
  •  DONATE 
  • Loading

Follow workers.org on
Twitter Facebook iGoogle

Glaxo profits while people with HIV die

Published Sep 23, 2006 7:21 AM

On Sept. 11 the U.S. media quietly released the news—totally obscured by 9/11 anniversary coverage—that the federal Internal Revenue Service had just levied a $3.4 billion fine, the largest in U.S. history, against drug giant Glaxo Smith Kline. GSK is the biggest manufacturer of HIV medications on the planet.

The fine on Glaxo was actually a victory for the pharmaceutical company. The $3.4 billion was what the IRS settled for—60 percent of the $6 billion the IRS said GSK underpaid in taxes from 1989 to 2005. Since corporations are taxed at a statutory 32 percent rate, the $6 billion represents a fraction of Glaxo’s profits during the period in question. In the “you can tell me that, but I’ll never believe it” department, GSK agreed to drop its claim for a $1.8 billion rebate from the IRS as part of the settlement offer. (Wall Street Journal, Sept. 11)

Shares of Glaxo stock rose 23 cents the afternoon the IRS announced the settlement. Investors were doubtless elated to learn from that day’s GSK press release that the company had well over $4 billion in reserve to deal with such untidy matters.

The company’s bottom line and its shareholders’ wallets have been fattened by the exorbitant profits to be made in pharmaceuticals—especially HIV antiviral drugs that GSK produces, like Com bivir, Epivir and Ziagen.

Since 1987, Glaxo has made sky-high profits from the sales of the first FDA-approved AIDS drug, AZT. Government-financed National Institute of Health research at the University of Michigan in the 1960s made the development of AZT possible. Granted an exclusive patent by NIH, the school then licensed the drug to GSK, at that time known as Burroughs Wellcome. (“The Truth About Drug Companies,” Marcia Angell, Scribe Press, 2005)

Working people paid through their taxes for the development of AZT—while people with HIV paid upwards of $15,000 to $20,000 a year for the drug in the 1980s when AZT was thought to have life-saving properties.

In order to continue reaping mammoth profits, Glaxo spent millions to block the distribution and manufacture of generic versions of its drugs, from Ghana to Canada. The number of lives lost by this intentional withholding of life-saving drugs could easily run into the millions—a true crime against humanity.

The $6 billion that GSK allegedly evaded in taxes is more than the sum of the last 10 years’ HIV prevention budget in the U.S. That money might have prevented thousands of new infections in the U.S. and seriously limited the epidemic’s expansion.

Glaxo’s willingness to sacrifice human lives to gain obscene profits makes it clear that the global HIV pandemic cannot be curtailed under the rule of capitalism. Good health for the poor and Wall Street greed are irreconcilable and always will be.

Only a socialist public health program, such as exists in Cuba, can offer a thorough solution for HIV prevention and care. When all industry, including the production of life-saving pharmaceuticals, is owned and controlled by the working class instead of by individual capitalists, the needed resources can easily be allocated to alleviate suffering, including from preventable diseases like HIV-AIDS.