[Ip-health] Guardian on SA Comp Com Case

[Sean Flynn]

According to Rory Carrol, there a GSK spokeswoman criticied the decision
on south african radio.



Ruling opens the door for cut-price HIV drugs

Pharmaceutical companies charging unfair prices for essential Aids
medicines, says South African commission

Sarah Boseley, health editor
Friday October 17, 2003
The Guardian

Grassroots activists in South Africa gained an important victory
yesterday over two giant pharmaceutical companies, including Britain's
GlaxoSmithKline, which could open the door to cheap Aids drugs being
available across the hard-hit continent.

South Africa's competition commission announced that it had accepted the
case, argued by the Treatment Action Campaign and other groups, that the
high charges made by GSK and Boehringer Ingelheim for Aids drugs were
unfair.

The companies had engaged in restrictive practices by refusing licences
to other firms making their own low-cost generic versions of Aids drugs,
the commission said.

Those companies, such as Cipla in India, are regularly accused of piracy
by the multi nationals, which, through the courts and by lobbying
friendly governments such as the US in trade negotiations, have
vigorously defended the 20-year patents on their drugs.

But the commission's statement yesterday leaves the large companies
staring at the potential wreckage of their carefully crafted drug
policies in Africa.

GlaxoSmithKline has led the way in cutting the prices of its Aids drugs
in Africa. The bombshell dropped on the day GSK announced another
reduction, with a fanfare that included an endorsement from Britain's
international development secretary, Hilary Benn.

But yesterday's cuts still left GSK's drugs at a higher price than those
of the Indian generic companies. The GSK price of the two-drug treatment
Combivir will be cut to $273 (=A3164) a patient a year. But the generic
firms' drugs are still much cheaper. Cipla's version sells at $197 and
Ranbaxy's is priced at $265. Both treatments are approved by the World
Health Organisation.

GSK's answer has been to license one generic company - South Africa's
own Aspen - to produce its drugs, but these are some way off reaching
the market and there is no guarantee the prices will be low unless there
is competition.

The competition commission is now referring the case to its tribunal for
a final decision. But the commission's recommendations are trenchant and
will be received with enthusiasm by Aids activists.

Menzi Simelane, a member of the commission, said: "Each of the firms has
refused to license their patents to generic manufacturers in return for
a reasonable royalty. We believe this is feasible and that consumers
will benefit from cheaper generic versions of the drugs. Granting
licences will also provide for competition between firms and their
generic competitors."

The commission is to ask the tribunal to make an order saying generic
firms should be allowed to sell their drugs in South Africa. It is also
to recommend a penalty of 10% of the multinationals' annual turnover
from Aids drugs sold in South Africa - for each year the pharmaceuticals
are found to have violated the 1998 competition act. In practice this is
not likely to be a substantial fine since so few people have been able
to buy the drugs in South Africa.

Jonathan Berger, a lawyer with the Treatment Action Campaign, which
brought the case about a year ago, said companies could still come to an
agreed resolution on the case. It was also possible that the tribunal
would rule in the companies' favour. But if the tribunal followed the
commission's advice, cheap drugs could quickly arrive in South Africa, a
country which has the highest number of infected people in the world.

"Cipla and Ranbaxy's products are already registered for use in South
Africa," Mr Berger said. "It is only the patents standing in the way of
them being used."

GlaxoSmithKline was shellshocked by the commission's statement, not
least because it had just received a letter from a senior investigator
saying the case would not be referred to the tribunal. A spokesman said
it was still in discussions with the commission.

Mr Berger said the price cuts and the TAC case were linked, but he
thought GSK's action was a result of the broad campaign led by TAC
together with the government statement in August saying it would put
together a treatment programme for the country's HIV/ Aids sufferers -
which left the pharmaceuticals "as the only ones who haven't come to the
table properly".

=B7 A total of =A326m is to be shared out among a dozen or more Caribbean
countries to help fight HIV/Aids. The UN's global fund to fight Aids,
tuberculosis and malaria will help fund Guyana, Haiti, Belize, Jamaica
andthe nine countries making up the Organisation of Eastern Caribbean
States.
An estimated 2.4% of people in the Caribbean have HIV. Previously, the
only country in the region to have had help from the fund was Haiti.