Important note: Information in this article was accurate in 2003. The state of the art may have changed since the publication date.
South African Press Association - December 10, 2003
"It has come late, and at the cost of many lives," Treatment Action Campaign (TAC) leader Zackie Achmat told reporters today in Pretoria.
"Let's put that behind us..."
Competition Commissioner Menzi Simelane announced that GlaxoSmithKline (GSK) agreed to allow up to three more companies to manufacture generic versions of three of its antiretroviral (ARV) drugs.
The commission hoped to conclude a similar agreement with Boehringer Ingelheim (BI) by the end of the week, he said.
Achmat said the individual complainants had already reached settlements along similar lines with BI.
This came after a year-long process which started when an HIV-positive woman, Hazel Tau, complained to the commission that GSK and BI contravened the Competition Act by abusing their dominant position in the manufacturing of ARVs.
A number of individuals and organisations, including the TAC and the Congress of SA Trade Unions, joined as complainants.
In October, the commission concluded there was a case to be made before the Competition Tribunal that GSK and BI had indeed contravened the act.
However, it was decided to engage in further discussions with a view of settling the matter without following the tribunal route, Simelane said.
"We think it is far more important to have broadened access to cheaper ARVs for people with HIV/Aids through price reductions by generic manufacturers. The introduction of generic substitutes should result in a drastic reduction in the prices of ARV drugs.
"As the agreements provide for more than one generic manufacturer, there will be competition amongst them, which should push prices even lower."
Since 2001 GSK allows Aspen Pharmacare to make and sell generic versions of Epivir (3TC), Retrovir (AZT) and Combivir for the public sector.
In terms of the latest deal, this would be extended to the private sector, the commission said in a statement.
Up to three more companies would be given similar licences. The licencees would be allowed to export their drugs to sub-Saharan African countries. If they did not have manufacturing capability in South Africa, they would be able to import the drugs from overseas.
GSK would charge them no more than five percent of the net sales of the drugs.
The TAC said the agreements with BI entailed the granting of two more licences, besides the one already granted to Aspen, to produce and sell generic versions of nevirapine.
These agreements meant that a Clinton Foundation deal -- whereby sub-Saharan governments could obtain generic ARVs at R900 per patient per year -- could be introduced immediately, the TAC said in a statement.
According to GSK senior vice-president Peter Bains, the company believed the complaint was unfounded.
"Our prices are sustainable. We do not make a profit; we cover our costs."
He said the crisis in sub-Saharan Africa had forced many companies to rethink the way they did business.
But Bains warned that if intellectual property rights were not protected, there would be no research and consequently no medicines or vaccines.
This settlement would not cause GSK to alter its research programme into ARVs and vaccines though, he said.
Simelane said the impact of the deal would hopefully be felt before the end of next year.
"We'll monitor the situation to ensure that the objective of cheaper drugs is achieved."
Tau said if it were not for ARVs, she would not be living today. A donor was sponsoring her treatment at a cost of R1,200 per month.
"Let's not waste more time (but) save lives in South Africa."
Achmat said the TAC intended to also approach the Competition Commission with regard to the cost of diagnosis and monitoring of HIV patients, which it believed was far too high.
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