On average, shares in those companies have increased in value about 54% since 2002. Investments in Abbott and other drug makers probably have gained the foundation hundreds of millions of dollars.
In 1994, however, the drug makers, with other research-intensive businesses, lobbied hard and successfully for the international Agreement on Trade-Related Aspects of Intellectual Property Rights, which made it harder to move from costly brand-name drugs to cheap generics. The agreement protected new-drug monopolies for 20 years or more.
This meant no low-priced generic for Kaletra. The pact locked in Abbott as its sole supplier, and Abbott set prices for the world.
Under pressure from activists, Abbott and other companies cut prices for key AIDS drugs in poorer nations. In Guatemala and Thailand, the new Kaletra costs $2,200 per patient per year, plus taxes and fees — a fraction of the more than $8,000 it costs in the United States. In poorer Nigeria, the official price was $500 a year.
But this was still too costly for most patients, including Felix.
The industry's approach "has the effect of making medicines available only to a narrow spectrum of a rich elite in a developing country," said Brook Baker, an intellectual property expert at Northeastern University.
He called it "pharmaceutical apartheid."
Drug companies say critics overlook billions of dollars' worth of drugs they donate to developing nations. Abbott says it has given AIDS drugs to 25,000 patients, along with millions of test kits, and has underwritten a major project to improve AIDS services in Tanzania.
In emergencies, critics welcome donated drugs. The problem, they say, is that donations scare away generic suppliers. Donations, said Ellen 't Hoen, who directs a drug-access program for Doctors Without Borders, "remove the prospect of any stable supply."
And when the free drugs are gone, patients die.
Most medicines are reliably profitable. In the most recent quarter, Abbott posted a gross profit margin of 59% of sales, and recently paid its 331st consecutive quarterly dividend. A congressional analysis shows that during the first six months of 2006, the 10 largest drug companies earned $39.8 billion in profits.
The Gates Foundation's top priority is stopping AIDS, Bill Gates told the International AIDS Conference in August. Since its inception, the foundation has donated more than $2 billion to fight the disease.
The foundation did not respond to written questions about the problems of patients who cannot obtain needed AIDS drugs due to pharmaceutical company policies.
Meanwhile, the foundation holds its grant recipients to a far higher standard than the drug companies on which it bets large portions of its endowment. Its grant form says it expects recipients "to exercise their intellectual property rights in a manner consistent with the stated goals of the Bill & Melinda Gates Foundation to promote the availability of inventions for public benefit in developing countries at reasonable cost."
Some critics say the foundation's failure to use its own investments "to promote public benefit in developing countries at reasonable cost" might trace back to the source of most of its money — Microsoft — which Bill Gates serves as chairman.
Microsoft monopolies in computer operating systems and business software depend upon the same intellectual-property and trade-law approaches favored by drug companies.
"The Gates Foundation is in a position to change the dynamic, to make sure that drugs get first to the places they are most needed," said Daniel Berman, deputy director in South Africa for Doctors Without Borders. "But it conflicts with the interests of Microsoft."
In response to written questions, Harrington, the Gates Foundation policy officer, said the foundation tried to guarantee that grantee discoveries made in partnership with for-profit companies trickled down to people in developing nations.