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New generation antiretroviral drugs (ARVs) could cost 500 percent more than those now being dispensed by the health department, Health Minister Manto Tshabalala-Msimang said on Tuesday.

Government will increase its spending on a variety of programmes in the social sector including teachers' salaries, health, welfare and public transport, said Finance Minister Trevor Manuel in his annual budget speech in Parliament today.

Tobacco excise tax increases in the budget seem to be as inevitable as night following day.

Over the past two weeks, the Global Fund was involved in a public argument with the government of South Africa over whether Global Fund grants to South Africa are being disbursed quickly enough.

The reduction will drop the price of Combivir, an HIV/Aids treatment recommended by the World Health Organisation, to 90 cents a day in 63 developing countries, including South Africa. The pharmaceutical company announced it would also reduce the price of Epivir, commonly known at 3TC and Retrovir, also known as AZT, by 45% and 38% respectively. TAC spokesperson Nathan Geffen said the price reduction was not being made available to pharmacies which was where most patients obtained their medication. Only about a 1 000 people get their medication through the public health system. Most people get their medication in the private sector. Geffen said the only way of keeping prices substantially low was through generic competition. He said GlaxoSmithKline also needed to clarify if it was going to lower the price of Lamibudine. Combivir is made up of AZT and Lamibudine. He said while Glaxo's action was insufficient, the positive side was that the drugs were being offered to employers who were treating their workers who were not part of medical aid plans. Jean-Pierre Garnier, Glaxo's chief executive, emphasised yesterday that this was not its first price cut. Glaxo has said it has trebled sales from two million people treated to six million in the 63 poorest countries between 2001 and 2002. Sales had not increased much since the last price cut, but manufacturing processes had improved. (Source: Sapa, Guardian Newspapers Limited 2003, Sapa,29 April 2003)