[Ip-health] SA M&G on Comp Com case

[Sean Flynn]

SA Mail and Guardian
SA generic Aids drugs breakthrough
Nawaal Deane | Johannesburg, South Africa
16 October 2003 16:51
The Treatment Action Campaign (TAC) is celebrating what it calls a
=93ground-breaking=94 decision on Thursday by the Competitions Commission
that found two giant pharmaceutical firms culpable of charging excessive
prices for anti-retroviral drugs and abusing their dominant positions in
the market.

The firms, GlaxoSmithKline South Africa and Boehringer Ingelheim, will
have to appear before the Competitions Tribunal -- the commission's
prosecuting arm -- to defend their contravention of the Competitions Act.

The finding is a result of a complaint made a year ago by a group of 12
people affected by and infected with HIV/Aids who alleged the prices
charged by the drug companies are directly responsible for the
=93premature, predictable and avoidable deaths of people living with
HIV/Aids, including adults and children.

The importance of this case ties into the need for anti-retroviral drugs
to be accessible to the people living Aids. Currently there are no
generic version of the anti-retroviral drugs sold in the country and
therefore the multinational cartels are able to monopolise the markets
through their patent rights.

In India and Brazil generic versions of these drugs cost a fraction of
the price compared to those manufactured by the patent-holding
multinationals. Competition by generics would drive down the costs of
these patent drugs.

The TAC welcomed the decision by the commission to find the firms guilty
of excessive pricing.

=93We are encouraged that both GlaxoSmithKline South Africa and Boehringer
Ingelheim will have to defend their conduct and their pricing to the
tribunal,=94 said Fatima Hassan, Aids Law Project lawyer.

=93The stark fact is that for the cost of one treatment from the
brand-name companies four people with Aids can be treated with cheaper
high quality 'generic' copies of the same medicines. In South Africa,
tens of thousands of people are dying every year because excessive
prices are charged for life-saving anti-retroviral medicines,=94 she told
the Mail & Guardian.

The Competitions Commission has also recommended to the tribunal that a
penalty of 10% of the annual turnover of the firm=92s sales of
anti-retroviral drugs be charged for each year that they have been found
to have violated the Competitions Act.

The Tribunal could also make an order authorising any company to use the
firms=92 patents to market anti-retroviral generics.

Menzi Simelane, commissioner at the Competition Commission, said: =94Our
investigation revealed that each of the firms has refused to license
their patents to generic manufacturers in return for a reasonable
royalty. We believe that this is feasible and that consumers will
benefit from cheaper generic versions of the drugs concerned. We further
believe that granting licenses would provide for competition between
firms and their generic competitors.=94

He said: =93Indeed the very goals of our Competition Act -- promoting
development, providing consumers with competitive prices and product
choices, advancing social and economic welfare and correcting structural
imbalances -- have been made difficult in this context by the refusal of
the respondents to license patents.=94

GlaxoSmithKline South Africa and Boehringer Ingelheim hold patents on
certain anti-retroviral medications used to treat HIV/Aids.
GlaxoSmithKline South Africa holds patents in South Africa on AZT
(branded as Retrovir), Lamivudine (branded as 3TC) and AZT/Lamivudine
(branded as Combivir). Boehringer Ingelheim holds patents in South
Africa on nevirapine (branded as Viramune).