[Ip-health] MSD licenses generic efavirenz in South Africa - was facing competition commission challenge

[Mike Palmedo]

'Generic ARV will cut HIV costs'

Cape Argus
June 03, 2008 Edition 1

Di Caelers

The Treatment Action Campaign has claimed another victory in the fight
for cheaper anti-Aids drugs, with news that a multinational
pharmaceutical company has given the go-ahead for generic production of
one of the country's first-line antiretrovirals.

The news comes after the Aids Law Project, acting for the TAC, lodged a
complaint against Merck Sharp & Dohme (MSD) with the Competition
Commission late last year.

They charged that MSD, the SA subsidiary of Merck, was "unlawfully
refusing to license the ARV efavirenz on reasonable terms".

Announcing that MSD was no longer "acting in an uncompetitive way", the
TAC said the change would pave the way for entry into the market of a
wide range of affordable efavirenz products.

For the public sector, which had been paying 64c in every R1 spent on
first-line ARV treatments for efavirenz alone, the development means
they can now choose to buy the drug from up to five different suppliers.

For the public sector, which had been paying 64c in every R1 spent on
first-line ARV treatments for efavirenz alone, the development means
they can now choose to buy the drug from up to five different suppliers.

Referring to recent correspondence from the Commission, the TAC said MSD
had now licensed four generic drug companies - two local producers and
two locally-based importers - to bring stand-alone efavirenz products to
market.

All four are also entitled to bring co-packaged products containing
efavirenz to market, and MSD had agreed that all licensed products could
be sold to both the public and private healthcare sectors in South
Africa and 10 other southern African countries.

MSD had also waived any right to a royalty.

On the basis of these developments, the commission said there was no
reason to refer the TAC's complaint to the Competition Tribunal for
adjudication. The TAC agreed. "There is no compelling purpose served by
referring what is now a historical complaint. Instead the TAC will focus
on ensuring that the reasonable terms of the licensing agreements are
appropriately implemented."

Compared with a year's supply of efavirenz at $500, a generic equivalent
of proven quality, safety and efficacy could cost only $150.

--
Mike Palmedo
Research Coordinator
Program on Information Justice and Intellectual Property
American University, Washington College of Law
4910 Massachutsetts Ave., NW Washington, DC 20016
T - 202-274-4442 | F 202-274-0659
mpalmedo@wcl.american.edu