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Contributions from
the Column
Studies and reports
AIDS drugs could soon be a lot cheaper in Africa
NGOs concerned about automony of development policy
Working together to protect the rainforest
Failing states: in search of a development policy concept
A new international financial architecture not in sight
1/2004 |
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[ Agreement on manufacture of generic drugs ]
AIDS drugs could soon be a lot cheaper in Africa
At the beginning of December, the South African anti-AIDS initiative Treatment Action Campaign (TAC) wrested agreement from pharmaceutical companies Boehringer Ingelheim and GlaxoSmithKline to issue licences for the production of cheaper generic versions of patented drugs. The two companies agreed to grant manufacturing licences to four South African companies for three drugs which, in combination, extend the life expectancy of AIDS patients. At present, only one company in South Africa, Aspen Pharmacare, is allowed to manufacture these drugs. In a statement, TAC said the granting of licences to three more manufacturers will strengthen competition and bring down prices; observers reckon the agreement could lower the cost of combination therapy by as much as 75 percent. According to TAC, the agreement is a major improvement on the As-pen Pharmacare deal. For one thing, it allows licencees to sell their products to private customers and not, as at present, only to public institutions. Furthermore, the generics produced can be exported to any country in Subsaharan Africa, whereas exports in the past were prohibited. And finally, the licence fees have been lowered from 30 percent (15 percent in the case of Boehringer) to five percent of sales volume.
In signing this deal, Boehringer Ingelheim and GlaxoSmithKline anticipated proceedings by South Africa’s Competition Commission. In September 2002, TAC and a string of other organisations and individuals had appealed to the Commission complaining that, despite acceptable offers, the two companies refused to grant generic manufacturing licences and were thus blocking competition. The Commission found the complaints justified and announced that it would be instituting proceeedings. Now, with the December agreement signed and delivered, the AIDS activists have dropped the case against the companies. (ell)
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