New AHF Subsidiary To Serve As Watchdog On Corporate Governance In Healthcare Industry: “ART” Will Promote “Accountability, Responsibility & Transparency”

LOS ANGELES, May 5 /PRNewswire/ -- AIDS Healthcare Foundation (AHF), the largest AIDS organization in the US, which operates clinics in the US, Africa and Central America, today announced the creation of a new subsidiary -- ART (Accountability, Responsibility, Transparency) -- a division of AHF that will seek to bring accountable, responsible and transparent corporate governance to corporations that have an impact on global health. Over the past several years, AHF has pioneered significant -- and successful -- efforts to make pharmaceutical companies more responsible in their AIDS drug pricing and corporate governance policies. ART will now codify AHF's previously individual corporate governance advocacy efforts and actions under one umbrella.

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"After the continuous barrage of corporate scandals over the past few years, everyone knows that the 'ART' of doing business is changing," said Michael Weinstein, President of AIDS Healthcare Foundation. "Today, the mantra is 'accountability, responsibility and transparency' as corporate governance takes a newfound importance among shareholders, regulators, corporate boards and the public at large. ART will tie together many of AHF's previous efforts targeting companies like GSK, Abbott, Serono and Roche in seeking responsible AIDS drug pricing and policies. Through ART, we plan to continue and expand our efforts to bring accountable, responsible and transparent corporate governance practices to corporations that have an impact on global health."

Over the past three years, AHF has pursued a stepped up and ambitious slate of advocacy and activist actions focused on pharmaceutical companies involved in the HIV/AIDS drug market here and abroad. AHF's advocacy efforts, which targeted drug giants including GlaxoSmithKline (GSK), Abbott Laboratories, Serono and Roche, have included protests, vigils, boycotts, the filing of state and federal lawsuits, petitioning the Food and Drug Administration to rescind or restrict approvals for certain AIDS drugs, and advocacy directed toward the investor community. Following are some of AHF's ongoing (and/or achieved) actions on corporate governance and global health:

   *  GlaxoSmithKline -- AHF has opposed GSK's pricing of its AIDS drugs,
      both domestically & internationally. To achieve its goals, AHF has:

   1.  Brought suit against GSK in federal court to invalidate its patent
       for AZT, the first AIDS drug, which was developed in the early 1960s
       with government grants as a possible cancer-fighting drug.  The case
       is proceeding to a jury trial;

   2.  Persuaded CalPERS, the largest US pension fund, to require GSK to
       explain its international AIDS drug pricing and policies.
       Approximately two weeks after CalPERS' request, GSK cut its prices
       for developing countries by at least 40%;

   3.  Along with other individuals and groups, AHF filed a complaint with
       South Africa's Competition Commission (a body somewhat akin to the US
       FTC) asserting that GSK charged illegally high prices for its AIDS
       drugs in that hard-hit African country.  The Commission initially
       recommended that the case be referred along for further prosecution.
       Within two days of the announcement of that decision in South Africa,
       GSK again lowered its AIDS drug prices.  GSK subsequently settled the
       claims by promising to extend licenses to other organizations to
       manufacture and sell generic versions of its AIDS drugs;

   4.  Successfully opposed a $36 million USD compensation package for GSK's
       CEO at last year's AGM in London, and successfully persuaded CALPERS
       to oppose the measure;

   5.  Banned GSK sales reps from calling on AHF medical providers during
       clinic hours;

   *  Serono -- Serono produces the drug, Serostim, which ostensibly treats
      AIDS wasting syndrome.  The drug costs up to  $7,000 per month;
      however, doctors doubt its effectiveness, and the drug has been widely
      abused and is frequently sold on the black market for use by
      bodybuilders and others as a 'vanity' drug.  In order to reduce this
      waste to taxpayers, AHF successfully lobbied California's ADAP program
      to place it on 'prior authorization status,' (whereby patients may
      still obtain the drug, but after a second review of the prescription
      for medical appropriateness by another provider).  Serono subsequently
      sued California to overturn that ruling; AHF's President, Michael
      Weinstein, and Chief of Medicine, Dr. Charles Farthing, filed legal
      declarations in support of California's position.  Serono lost the
      case and the drug remains on prior authorization status.

   *  Abbott -- AHF was among the first to speak out (in a press statement
      and subsequent Wall Street Journal article, December 19, 2003) when
      Abbott raised the price of Norvir, its key AIDS drug, by 400% after
      7 years on the market.  Since then, AHF has held protests and vigils;
      spoofed Abbott's advertising and outreach following the price hike;
      attended, protested outside of and also spoke inside during public
      comment directly to Abbott executives, officials and shareholders at
      Abbott's April 23rd AGM in Chicago.  In addition, AHF currently has
      two lawsuits pending against Abbott over the price hike: a federal
      antitrust suit alleging monopolization on the pricing of Norvir, and a
      state action in California asserting false advertising regarding
      statements Abbott has made on the impact of the drug price hike on
      Medicaid and other government programs.

   *  Roche -- AHF spoke out loudly and publicly against Roche's pricing of
      Fuzeon, Roche's newest protease inhibitor, which was priced close to
      $20,000 USD annually.  AHF has been monitoring the impact of this
      drug's price on state ADAP programs, and is also monitoring Roche's
      actions on compassionate use programs in states that restrict access
      to Fuzeon through their ADAP or other government-funded programs.

ART concentrates on Accountability, Responsibility and Transparency. Accountability is defined by issues such as financial performance and compensation policies that reflect proper incentives. Responsibility concerns corporate ethics and stewardship of the corporation's reputation. Transparency concerns corporate openness. ART will function as a subsidiary of AHF and will draw on AHF's advocacy experience and clinical expertise in influencing corporate governance at corporations that have an impact on global health.

CONTACT: Public Affairs, Ged Kenslea, Communications & CommunityRelations Director of AIDS Healthcare Foundation, +1-323-860-5225, or mobile,+1-323-791-5526