Johannesburg — AIDS activists hailed a breakthrough agreement with two of the largest drug companies in South Africa Wednesday, saying it will help more poor people get vital medicines. They cited the Canadian government's decision to override patent law for essential drugs for Africa as one key factor in persuading the pharmaceutical makers to loosen their hold on patents.
South Africa's AIDS-activist group Treatment Action Campaign signed a deal yesterday with GlaxoSmithKline PLC and Boehringer Ingelheim that will see the drug companies grant up to four different generic companies licences to make their patented AIDS drugs, with 5 per cent of profits going to the patent holders.
The generic makers will be allowed to sell the drugs to both the public and the private sector, and export them to all of sub-Saharan Africa — the first time there has been any such arrangement on the continent.
The price of anti-retroviral drugs to keep one AIDS patient alive currently costs about $300 per year, but the deal will likely drive that cost much lower. "For us, this is an historic occasion," TAC chairman Zackie Achmat said. "It's come late. It's come at a cost of many thousands of lives, but we now want to say to the drug companies, 'Let's put this behind us, and move on.' " Mr. Achmat, who is HIV-positive, now pays $74 per month for drugs (in a country where the average monthly income is $305), but the new competition could drive the price as low as $18 per month. It may take up to a year, however, for the generic firms to start production of the drugs.
Glaxo currently has an agreement with Aspen Pharmacare to make its generic AIDS drugs, but with only one company licensed, there had been no competitive lowering of the price. A group led by TAC filed a complaint with the South African Competition Commission, which ruled in October that their complaint against the pharmaceutical makers had merit and should go before a tribunal with the authority to impose fines and penalties.
The new deal will give licences to up to four generic companies for the Glaxo drugs. "As the agreement provides for more than one generic manufacturer, there will be competition among them, which should push prices even lower," said Menzi Simelane, a lawyer with the commission. Peter Bains, senior vice-president for Glaxo, noted that the company had already dramatically lowered the prices of its drugs (3TC, AZT and Combivir) and voluntarily granted Aspen a licence in 2001. He called Wednesday's agreement "an appropriate response to the HIV/AIDS pandemic in the region."
"Perhaps more importantly, we are leading efforts to discover and develop new vaccines and medicines for AIDS," he told reporters.
Boehringer holds the patent on Nevirapine, the key drug in preventing transmission of HIV from pregnant women to their babies; it is expected to grant three generic makers the right to produce the treatment. TAC national secretary Mark Heywood credits the Canadian legislative change, which overrides patent law so that generic makers can make drugs on the World Health Organization's list of essential medicines and export them to the developing world, with having influenced Glaxo's decision not to fight the complaint with the competition commission.
"I think the Canadian legislation definitely played a part. It's quite clear," he said, also citing a World Trade Organization agreement in August that said governments could override patent law for health emergencies. "The defence of patents on the terms these companies are trying to protect them is morally unacceptable, and the world is moving in a direction the pharmaceuticals are having to take cognizance of."
