Important note: Information in this article was accurate in 2003. The state of the art may have changed since the publication date.

Reuters NewMedia - Wednesday December 10, 2003
Jodie Ginsberg

In an out-of-court settlement with AIDS activists, British-based GlaxoSmithKline Plc and Germany's Boehringer Ingelheim said they would grant more licenses to generic firms to produce and import antiretroviral (ARV) drugs.

South Africa has more people with HIV/AIDS than any other country -- an estimated 5.3 million, or 13 percent of the world's infected. Despite steep price cuts in recent years, modern therapy to fight the HIV virus that causes AIDS remains out of reach for the vast majority of Africans.

The country's Competition Commission found in October the two firms had a case to answer on anti-competitive behavior over the sale of AIDS drugs and recommended to the Competition Tribunal, an enforcement body, they be fined and required to allow the manufacture of generics.

The Commission said Wednesday that it would now not ask for Glaxo to be fined, and was discussing a similar agreement with Boehringer.

"This is a big day for people living with HIV/AIDS," HIV sufferer Hazel Tau told a news briefing. "If it wasn't for ARVs, I wouldn't be living here today."

Tau said her ARV treatment cost around 1,200 rand ($187.50) a month -- twice the country's average monthly income. Cheap generics could slash the cost to around 300 rand, or less if more firms are allowed into the market.

In November, South Africa approved a national drug treatment program to tackle the spread of AIDS, finally bowing to pressure to act against an epidemic killing an estimated 600 of its people each day. This has yet to be implemented.

FIVE PERCENT ROYALTY FEE

Activists said cheaper drugs should help. The Treatment Action Campaign said that under the deal the two firms would charge no more than a five percent royalty fee on the sales of generics in South Africa.

"We are pleased with the decision," Glaxo senior vice president Peter Bains said, adding that the firm had no estimate for the cost it would incur.

Nick Turner, industry analyst with Jefferies in London, said there would be little financial impact on Glaxo.

A Glaxo spokesman in London said the company -- the world's biggest maker of AIDS drugs -- would extend to other firms a voluntary license it granted to local firm Aspen Pharmacare in October 2001 for the production of antiretrovirals.

It is in advanced talks with Thembalami Pharmaceuticals, a joint venture between Adcock Ingram and India's Ranbaxy Laboratories, and will consider issuing a two more possible licenses for copies of its drugs AZT and lamivudine.

The British-based company said its preference would be to award licenses to local producers but would consider imports into South Africa if that was not practicable.

Boehringer said it would grant three licenses for the production and import of nevirapine, used to prevent transmission of HIV from mothers to children. The first of these has already gone to Aspen.

Spokesman Kevin McKenna said that if licensees manufactured the drugs in South Africa they would be able to export the drugs to the region but if they were imported, they would only be available in South Africa.

Drug industry figures show cut-price HIV/AIDS medicines from six companies were getting to only 76,000 Africans in June this year, a drop in the ocean when set against the need for treatment. Sub-Saharan Africa is home to 30 million of the 42 million people infected with HIV worldwide.

The pandemic is starting to hurt South African firms, an independent survey showed Wednesday.

The largest survey on the issue to date found that nine percent of companies reported a "significant" adverse impact on business from the disease, and 43 percent envisioned this within five years.

(Additional reporting by Ben Hirschler in London and Sitaraman Shankar in Frankfurt) ($1=6.398 Rand)

031210
RE031216

Always watch for outdated information. This article first appeared in 2003. This material is designed to support, not replace, the relationship that exists between you and your doctor.

AEGiS presents published material, reprinted with permission and neither endorses nor opposes any material. All information contained on this website, including information relating to health conditions, products, and treatments, is for informational purposes only. It is often presented in summary or aggregate form. It is not meant to be a substitute for the advice provided by your own physician or other medical professionals. Always discuss treatment options with a doctor who specializes in treating HIV.

Copyright ©1980, 2003. AEGiS. All materials appearing on AEGiS are protected by copyright as a collective work or compilation under U.S. copyright and other laws and are the property of AEGiS, or the party credited as the provider of the content. .