Prices for AIDS drugs will become more affordable with the announcement this weekend of two initiatives aimed at cutting the cost of the most frequently prescribed
antiretrovirals.
Multinational pharmaceutical company GlaxoSmithKline (GSK) said yesterday it was granting a voluntary licence to local firm Aspen Pharmacare to produce AZT and 3TC - as well as the combination pill Combivir exclusively for the public sector.
The deal also obliges Aspen to pay 30% of the net sale price to non-governmental organisations dealing with HIV/AIDS.
At the same time Cipla-Medpro, the local associate of Indian pharmaceutical manufacturer Cipla, has submitted a complaint to the Competition Commission alleging that GSK and Boehringer Ingelheim abused their patents. Cipla manufactures Nevirapine, an antiretroviral drug that helps to prevent the mother-to-child transmission of HIV. Cipla-Medpro CEO Jerome Smith said late last night that the complaint might now have to include Aspen
Pharmacare.
The only real market in SA for antiretroviral drugs has been in the private sector as government has consistently refused to provide the life-prolonging drugs to public sector patients who could not afford them.
GSK has kept the lucrative - albeit small - market that includes medical aid schemes and larger buyers, like mining or manufacturing companies like Ford or
DaimlerChrysler.
The Cipla action is groundbreaking and challenges the way the patents have been used by both companies to keep drug prices high.
Cipla has chosen to challenge the patents through the commission initially, but it will use the Patents Acts if necessary.
Cipla's complaint says that the patents and licence-holders qualify as a dominant firm in terms of the Competition Act, and claims that they have abused that dominance.
The patentees and all the licencees charge an exorbitant price for the relevant pharmaceutical products to the detriment of consumers, according to the complaint.
The claim argues that people with the virus or those who have been exposed to it are obliged to pay the sum demanded by these patentees and
licencees".
At the time the complaint was filed, Cipla was unaware of the details of GSK's move, but Smith believes that the move will not impede his complaint.
He says it appears as though Aspen and GSK are now acting in concert. However, he felt that any move that sought to make much-needed drugs accessible was to be welcomed.
James Love, director of the Washington-based consumer project on technology, believes that GSK needs to be challenged further on its drug policy for the private sector, and says that the competition which the Cipla action will bring, will see prices lowered further.
The complaint describes the prices charged for the drugs until recently, as well as the prices at which these drugs could become available through
Cipla.
The Indian parent company offered substantial reductions on the prices earlier this year.
The drug known as 3TC in a 150mg dose of 60 tablets would have cost R12 000, while Cipla would have supplied the same drug for R195,46.
Aspen CEO Steven Saad said he did not have exact prices yet, and that much would depend on the demand.
However, industry sources said that the prices likely to be charged would be considerably higher than Cipla's offers.
The Cipla case also claims that the patent-holder has entered into exclusive licensing agreements with both GSK and Boehringer Ingelheim, which exclude other entities from marketing the same products in competition.
Source: Business Day, 8 October 2001
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