JOHANNESBURG, Oct 17 (AFP) - South Africa's Competition Commission has found two pharmaceutical giants guilty of charging excessively high prices for anti-AIDS drugs and recommended they be fined 10 percent of their annual turnover in South Africa.
The South African branches of GlaxoSmithKline, which has its headquarters in Britain, and Boehringer Ingelheim of Germany have been found guilty of contravening the Competition Act and denying competitors access to an essential service.
"The firms have been found to have abused their dominant positions in their respective anti-retroviral markets," the Competition Commission said in a statement.
The Competition Commission, an independent organisation ensuring that companies compete fairly and do not abuse positions of power, found that the two firms had engaged in "excessive pricing", "an exclusionary act" and "denied a competitor access to an essential facility".
"Our investigation revealed that each of the firms has refused to license their patents to generic manufacturers in return for a reasonable royalty," commissioner Menzi Simelane said.
The commission is an investigating body that makes recommendations to the Competition Tribunal which then decides whether or not to accept its advice.
"We will recommend a penalty of 10 percent of the annual turnover of the respondents' anti-retrovirals in South Africa for each year that they are found to have violated the act," Simelane said.
Commission spokeswoman Dani Cohen said Friday the ruling followed a range of complaints from persons or groups including the AIDS Healthcare Foundation, the largest AIDS organisation in the United States; and the Treatment Action Campaign, a lobby group which successfully challenged the South African government's AIDS policies in court.
The two companies, which hold patents on certain anti-retroviral medicines in South Africa, including nevirapine and AZT, said they have been offered a chance to try to reach a settlement with the complainants before November.
Giving nevirapine to an HIV-positive mother at the start of labour and to her child for a short period post-natally is believed to reduce the risk of mother-to-child transmission of the virus that causes AIDS during delivery and through breast feeding.
AZT is currently the most popular drug for for preventing the onset of AIDS in HIV-infected patients.
GlaxoSmithKline spokeswoman Vicki Ehrich also said the commission's announcement to the media was premature.
"We really are jumping the gun. We are very, very concerned about the implication of their finding and we are in negotiations with the complainants," Ehrich told AFP.
She declined to disclose GlaxoSmithKline's annual turnover in South Africa, saying the firm was not obliged to make the information public.
Boehringer Ingelheim made a similar statement to SAPA news agency Friday.
"We shall avail ourselves of the opportunity, given by the commission, to discuss the matter further. This will be done as a matter of great urgency," the company said in a statement.
South Africa has one of the highest AIDS rates in the world with five million of its adults in a population of 44.8 million infected with HIV in 2002. UNAIDS estimates that nearly 1,000 people died of AIDS per day in 2002 and that 660,000 children were left orphaned by the disease.
The South African government ended years of denial in August by recognising the efficacy of antiretroviral drugs in fighting AIDS, and launched a plan to provide the drugs to its HIV-positive citizens.
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