The 10 Worst Corporations of 2004

By Russell Mokhiber and Robert Weissman, AlterNet. Posted January 26, 2005.

It is never easy choosing the 10 Worst Corporations of the Year – there are always more deserving nominees than we can possibly recognize. One of the greatest challenges facing the judges is the directive not to select repeat recipients from last year's 10 Worst designation.

The no-repeat rule forbids otherwise-deserving companies – like Bayer, Boeing, Clear Channel and Halliburton – from returning to the 10 Worst list in 2004.

Of the remaining pool of price gougers, polluters, union-busters, dictator-coddlers, fraudsters, poisoners, deceivers and general miscreants, we chose the following – presented in alphabetical order – as the 10 Worst Corporations of 2004:

Abbott Laboratories: Drug-Pricing Chutzpah

Chutzpah. Webster's defines the Yiddish term now incorporated into English slang as: 1. unmitigated effrontery or impudence; gall. 2. audacity; nerve.

In the next edition, they may want to add: 3. See Abbott.

In December 2003, the company raised the U.S. price of its anti-AIDS drug Norvir (generic name ritanovir) by 400 percent. That is, unless the product is used in conjunction with other Abbott products – in which case the price increase is zero.

Norvir has become an increasingly important treatment in recent years. Scientists have discovered that while Norvir is generally too toxic for safe use as a protease inhibitor (one category of anti-AIDS drugs), in lower doses it works well as a booster to increase the efficacy of other protease inhibitors. As a result, Norvir is frequently prescribed along with other protease inhibitors.

The Norvir price increase does not apply when the product is used as a booster with another Abbott protease inhibitor (in the combined product Kaletra). Thus the impact of the Norvir price increase is to make Kaletra far cheaper than rival combinations of Norvir and non-Abbott protease inhibitors.

Norvir is especially important for patients in need of a "salvage therapy" of new and powerful treatments because their virus has become resistant to other medicines.

Lynda Dee, co-chair of the AIDS Treatment Activists Coalition's Drug Development Committee, called the price increase for these patients, who may have no choice as to the medications they need to survive, "pharma-terrorism perpetrated against the patients who need new drugs the most."

Abbott said the price spike was justified by its need to raise money for research and development. "New medicines cost hundreds of millions of dollars to develop," Jeffrey Leiden, president and chief operating officer of Abbott's Pharmaceutical Products Group, told a National Institutes of Health meeting in May.

Moreover, Leiden said, the price increase would not deny any patients access to the drug. The price increase does not apply to federal AIDS drug programs, which cover 54 percent of people with HIV/AIDS. Price increases only apply to private insurers and to uninsured individuals, who Abbott says can get the product for free under a special program it operates.

Making the Abbott price jump especially pernicious in the eyes of consumer advocates was that the drug was invented on a grant from the U.S. federal government.

Because of the U.S. government's financing role, Essential Inventions, Inc., a nonprofit corporation created to distribute affordable public health and other inventions, in January petitioned the government to exercise its "march-in" rights under the federal Bayh-Dole Act and issue an open license to generic firms to produce their own version of Norvir.

"Essential Inventions is asking the Bush administration to adopt a simple rule – U.S. consumers should not pay more for drugs invented on government grants," said Essential Inventions president James Love. Following the U.S.-only price increase, Norvir is 5 to 10 times more expensive in the United States than in other high-income countries.

But NIH rejected the Essential Inventions proposal, arguing that companies that obtained licenses to government-funded inventions have a duty only to commercialize the inventions. NIH does not have authority to consider the price at which a product is sold and the impact of the price on access, the agency ruled – even though the Bayh-Dole Act says government-funded inventions should be made "available to the public on reasonable terms."

"If Secretary Thompson agrees that quadrupling the price of a life-or-death AIDS drug, rigging the market, and discriminating against U.S. consumers is 'reasonable,' you can't help but wonder what the [s]ecretary considers unreasonable," said Rep. Sherrod Brown, D-Ohio, in criticizing the NIH decision.

AIG: Deferred Prosecutions On the Rise

When the world's largest insurer, American International Group Inc. (AIG), was charged by federal prosecutors with crimes in November, it quickly cut a deal with the Justice Department that ended a criminal probe into its finances with a deferred prosecution agreement.

In a deferred prosecution, the corporation accepts responsibility, agrees not to contest the charges, agrees to cooperate, usually pays a fine and implements changes in corporate structure and governance to prevent future wrongdoing.

Russell Mokhiber and Robert Weissman are co-authors of On the Rampage: Corporate Predators and the Destruction of Democracy (Monroe, Maine: Common Courage Press). Robert Weissman is general counsel for Essential Inventions, a nonprofit mentioned in the Abbott profile.

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