[Ip-health] Press clips on SA Settlement

Thu Dec 11 12:09:09 2003

New York Times

December 11, 2003
Pact Expands Generic Drugs in South Africa to Fight AIDS
By MICHAEL WINES

JOHANNESBURG, Dec. 10 =97 Two major makers of anti-AIDS drugs agreed
Wednesday to expand licensing of the drugs in southern Africa to generic
manufacturers, potentially making both existing and new, more powerful
AIDS treatments available at drastically lower prices.

The agreement ended a yearlong inquiry by South African government
regulators into accusations that the companies had gouged consumers and
stifled competition with their pricing and licensing policies.

Some AIDS activists who had made the accusations said the settlement
could reduce the price therapy for AIDS patients by as much as 90
percent and provide powerful combination medicines not now available in
the region.

More than one in nine South Africans is H.I.V.-positive, the highest
rate of any nation. The settlement will affect South Africa and 47 other
sub-Saharan nations.

"It's come late, but not too late," Jonathan Berger, a lawyer at the
AIDS Law Project at the University of the Witswatersrand in
Johannesburg, said in a telephone interview. "Many tens, if not hundreds
of thousands of lives have been lost. But many lives can now be saved,
and that's what's important."

Estimates of the price reductions expected to result from the expanded
sale of the drugs vary wildly. Mr. Berger said the average price of
anti-retroviral treatment could drop to as little as $25 from as much as
$225 =97 a figure that dwarfed the average monthly income here.

The two drug makers, GlaxoSmithKline of Britain and Boehringer Ingelheim
of Germany, are dominant makers of anti-retroviral drugs, the principal
weapons used in suppressing AIDS. The South African Competition
Commission concluded in October that the companies had overcharged for
the drugs and had limited their licensing to competitors to try to
suppress competition.

Both companies denied the commission's assertion. Glaxo, the world's
largest maker of anti-retroviral drugs, has said that it makes its
anti-AIDS drugs available to charities and governments in Third World
nations at cost, and Boehringer says it makes nevirapine, a drug that
suppresses H.I.V., available free or at reduced cost to developing
nations. But the companies would have had to defend themselves in court
proceedings that could have exposed internal pricing and marketing
strategies.

Surveys show that regardless of company efforts, anti-AIDS drugs are
available to only a tiny sliver of the estimated 30 million people in
sub-Saharan Africa who have tested positive for H.I.V., the virus that
causes AIDS.

In the settlement, GlaxoSmithKline agreed to license its patents for
three anti-retrovirals =97 AZT, Epivir and Combivir =97 to at least one
generic manufacturer in addition to an existing South African licensee,
Aspen Pharmacare Holdings. In a news release, the company said it would
accept applications for licenses from one or two other companies.

Boehringer has already awarded a royalty-free license to Aspen to make
and import nevirapine for South Africa and 13 other nations in the
region, and would award two more licenses under the new accord.

Competition Commission officials said at a news conference that Glaxo
would charge a 5 percent royalty for the licenses instead of the 30
percent it had previously charged Aspen and that it would permit generic
makers to import its drugs to South Africa if they lacked the capacity
to manufacture them here. Drugs produced in South Africa could be
exported to anywhere in the region.

Financial Times

South Africa to get cheap Aids medicines
By Nicol Degli Innocenti in Pretoria and David Firn in London
Published: December 11 2003 4:00 | Last Updated: December 11 2003 4:00

GlaxoSmithKline and the pharmaceutical companies, are to grant voluntary
licences to generic drugs manufacturers in South Africa to produce cheap
versions of their patented Aids drugs.

The move opens the anti-retrovirals market to generic competition and is
likely to result in a fall in prices. A month's supply of anti-
retrovirals, which costs R1,200 (=A3107), is expected to drop to just over
R300 (=A327) as soon as generics are available.
The licensees will be allowed to export to 47 countries in sub-Saharan
Africa. Aids activists believe the move could have consequences in other
countries with rising HIV infections. "This licensing agreement will
have significant implications for other developing countries outside
Africa," said Mark Heywood, Treatment Action Campaign secretary.

The granting of voluntary licences is the result of an out of court
settlement between British-based GSK and Germany's BI and TAC, an Aids
activist group. Last year, TAC lodged a complaint with the South African
Competition Commission, accusing the companies of acting unlawfully
charging excessive prices for Aids drugs.

In October, the commission found the companies guilty of abusing their
dominant position in the anti-retrovirals market and of excessive pricing.

Both GSK and BI have accepted a cut in royalty fees on the licences to
no more than 5 per cent of net sales.

Boston Globe

Deal paves way for generic HIV drugs
Drug companies to allow sales in sub-Saharan Africa

By John Donnelly, Globe Staff, 12/11/2003

PRETORIA -- AIDS activists and two major pharmaceutical companies
reached milestone agreements that allow generic drug makers in South
Africa to produce life-extending medication for those infected with the
deadly virus, officials announced yesterday.

The deal also permits the drugs to be sold in all 47 sub-Saharan African
countries, and is the first agreement of its kind in Africa, where the
deadly disease has hit hardest, infecting more than 26 million people.

The agreements, brokered by South Africa's Competition Commission, are
expected to result in another major drop in price for the antiretroviral
drugs because of a more competitive market, commission officials said.
Currently, the lowest price for antiretroviral medicine in the
developing world is slightly less than $300 annually; the cost can be
more than $10,000 in the United States and other wealthy countries,
where the drugs are protected under patent laws.

The two companies, GlaxoSmithKline and Boehringer Ingelheim, reached
separate agreements with the Treatment Action Campaign, the activist
group said. The Competition Commission said it had finalized an
agreement with GlaxoSmithKline, and is in negotiations with Boehringer.

"For us, this is an historic occasion," said Zackie Achmat, chairman of
the Treatment Action Campaign, who at a news conference wore a "HIV
Positive" T-shirt and held his purple pillbox containing antiretroviral
drugs. "It's come late, it's come at a cost of many thousands of lives,
but we now want to say to the drug companies, `Let's put this behind us,
and move on.' "

The agreement followed a ruling by the Competition Commission in October
that GlaxoSmithKline and Boehringer had violated the country's
Competition Act by excessive pricing and refusing to license their
patents to generic manufacturers in return for a reasonable royalty.

GlaxoSmithKline said it would allow four generic companies to produce
and sell its drugs 3TC (lamivudine), AZT (retrovir), and combivir for a
5 percent royalty. Peter Bains, senior vice president for the company,
said that while the drug makers believe the complaint was unfounded, it
was "pleased" that the matter wasn't referred to the Competition
Tribunal, where it feared a protracted process of hearings and
investigations would have produced months of negative publicity.

"We want to continue to play our part in addressing South Africa's
health care needs," Bains said, reading from a statement at the news
conference. ". . . Perhaps more importantly, we are leading efforts to
discover and develop new vaccines and medicines for AIDS."

While some pharmaceutical officials have said that awarding voluntary
licenses for generic manufacturers to produce their drugs might lessen
incentives for research and development, Bains said that would not
happen as a result of this deal. He said his company now has 16
antiretroviral drug projects and three AIDS vaccine projects.

But he warned, "If there's no intellectual property protection, there
will be no research and development. And if there's no research and
development, there will be no future supply for antiretrovirals and
vaccines."

Treatment Action Campaign officials said they also reached an agreement
with Boehringer to allow three generic companies in South Africa to
produce, import, or sell the antiretroviral medicine neviripine, which
is used for adults in triple combination therapy as well as given to
pregnant women in attempts to prevent passing HIV to newborns.
Boehringer officials did not comment yesterday.

At the time of the complaint that led to yesterday's settlement, AZT and
3TC each cost about $1,200 a year per patient, while neviripine cost
roughly $600 annually; AIDS activists now hope the prices for those
three drugs combined will drop to as low as $300 in South Africa. Over
time, advocates and complainants hope, the price for the triple
combination therapy will fall to about $150 annually.

The complaint was first brought by Hazel Tau, an HIV-positive woman who
nearly collapsed 14 months ago after announcing the litigation at a news
conference, only to later find out the CD4 cell count in her blood had
fallen to 9. A person's CD4 count measures the body's ability to fight
off opportunistic diseases; if it drops below 200, doctors recommend
antiretroviral therapy.

Tau, who now is on antiretroviral drugs thanks to an anonymous donor,
said yesterday her CD4 count has rebounded to 380.

"I'm well," she said. "I represent a network of individuals, many of
whom are too poor to buy the drugs. Let's not waste more time."

The fight against AIDS is a broad battle, with price reductions for
antiretrovirals only one major goal, the activists acknowledged. South
Africa, which has an estimated 5 million people infected with HIV, more
than any country in the world, hopes to begin its rollout of AIDS
treatment programs early next year. It comes just as the World Health
Organization starts its ambitious plan to treat 3 million people by the
end of 2005. Roughly 400,000 people in the developing world are
currently on the AIDS drugs.

The work ahead includes training tens of thousands of community workers
to monitor those on the medication; educating those infected that they
must take the drugs every year; widescale prevention campaigns; major
efforts to get more people to test for HIV; and work by activists,
politicians, and others to decrease the stigma attached to the disease.

Several of the complainants named in the litigation talked yesterday
about losing friends to AIDS at a numbing rate in the last year. But
even with the drugs available, activists and experts acknowledged that
the virus will continue to kill, if at a much slower rate.

Petunia Ngubane, a 38-year-old Soweto woman, was among the spectators at
yesterday's news conference yesterday. A fourth-grade teacher and mother
of three children, she lost her husband, Paul Matola Ngubane, to AIDS on
June 16.

He was one of the complainants. "He had been on the drugs since 2001,"
she said. "He developed complications. This agreement is an achievement
and will help many, many people, but as sometimes happens, they are not
always enough."

Globe and Mail (Canada)

Drug companies make patent concessions

By STEPHANIE NOLEN
 From Thursday's Globe and Mail

December 11, 2003

Johannesburg =97 AIDS activists hailed a breakthrough agreement with two
of the largest drug companies in South Africa Wednesday, saying it will
help more poor people get vital medicines. They cited the Canadian
government's decision to override patent law for essential drugs for
Africa as one key factor in persuading the pharmaceutical makers to
loosen their hold on patents.

South Africa's AIDS-activist group Treatment Action Campaign signed a
deal yesterday with GlaxoSmithKline PLC and Boehringer Ingelheim that
will see the drug companies grant up to four different generic companies
licences to make their patented AIDS drugs, with 5 per cent of profits
going to the patent holders.

The generic makers will be allowed to sell the drugs to both the public
and the private sector, and export them to all of sub-Saharan Africa =97
the first time there has been any such arrangement on the continent.

The price of anti-retroviral drugs to keep one AIDS patient alive
currently costs about $300 per year, but the deal will likely drive that
cost much lower. "For us, this is an historic occasion," TAC chairman
Zackie Achmat said. "It's come late. It's come at a cost of many
thousands of lives, but we now want to say to the drug companies, 'Let's
put this behind us, and move on.' " Mr. Achmat, who is HIV-positive, now
pays $74 per month for drugs (in a country where the average monthly
income is $305), but the new competition could drive the price as low as
$18 per month. It may take up to a year, however, for the generic firms
to start production of the drugs.

Glaxo currently has an agreement with Aspen Pharmacare to make its
generic AIDS drugs, but with only one company licensed, there had been
no competitive lowering of the price. A group led by TAC filed a
complaint with the South African Competition Commission, which ruled in
October that their complaint against the pharmaceutical makers had merit
and should go before a tribunal with the authority to impose fines and
penalties.

The new deal will give licences to up to four generic companies for the
Glaxo drugs. "As the agreement provides for more than one generic
manufacturer, there will be competition among them, which should push
prices even lower," said Menzi Simelane, a lawyer with the commission.
Peter Bains, senior vice-president for Glaxo, noted that the company had
already dramatically lowered the prices of its drugs (3TC, AZT and
Combivir) and voluntarily granted Aspen a licence in 2001. He called
Wednesday's agreement "an appropriate response to the HIV/AIDS pandemic
in the region."

"Perhaps more importantly, we are leading efforts to discover and
develop new vaccines and medicines for AIDS," he told reporters.

Boehringer holds the patent on Nevirapine, the key drug in preventing
transmission of HIV from pregnant women to their babies; it is expected
to grant three generic makers the right to produce the treatment. TAC
national secretary Mark Heywood credits the Canadian legislative change,
which overrides patent law so that generic makers can make drugs on the
World Health Organization's list of essential medicines and export them
to the developing world, with having influenced Glaxo's decision not to
fight the complaint with the competition commission.

"I think the Canadian legislation definitely played a part. It's quite
clear," he said, also citing a World Trade Organization agreement in
August that said governments could override patent law for health
emergencies. "The defence of patents on the terms these companies are
trying to protect them is morally unacceptable, and the world is moving
in a direction the pharmaceuticals are having to take cognizance of."

Business Report, Independent Newspapers (South Africa)

Drug companies make patent concessions

By STEPHANIE NOLEN
 From Thursday's Globe and Mail
11 Dec 2003