GlaxoSmithKline and Boehringer Ingelheim have conceded defeat in a long-running battle to preserve their antiretroviral drug patents in South Africa. Following a Competition Commission judgement against the companies in October, the manufacturers announced this morning that they will allow generic versions of their products AZT, 3TC and nevirapine to be produced by South African-based companies at low cost. The deal will also allow South African companies to export the products to other countries in sub-Saharan Africa.
Both companies had already concluded voluntary licensing deals with Aspen Pharmacare, allowing the company to export to public sector customers in sub-Saharan Africa. The new deal will extend the license to allow exports to private sector customers too.
The agreements open up the $140 a year triple combination price negotiated with Aspen Pharmacare by the Clinton Foundation to the whole of sub-Saharan Africa.
The terms of the agreement will allow manufacturers to produce fixed dose coformulations of the three drugs, as recommended by the WHO guidelines on antiretroviral treatment in resource-limited settings.
The Treatment Action Campaign (TAC), COSATU, CEPPWAWU, the AIDS Consortium, four people living with HIV/AIDS and four health-care workers have entered into settlement agreements with pharmaceutical giants GlaxoSmithKline (GSK) and Boehringer Ingelheim (BI).
"In signing these agreements, AIDS activists have now concluded their complaint against GSK and BI," a TAC spokesperson said this morning. "The terms of the agreements go well beyond what could conceivably have been won by pursuing the prosecution of the complaint under the Competition Act."
The agreements are legally binding on GSK and BI. In the event that GSK and/or BI do not comply with any aspect of any agreement it will be left open to the complainants to go to a court of law to enforce any aspect of the agreement that is not being complied with.
GlaxoSmithKline will license its product to three companies. One deal has already been agreed with Thembalami, a joint venture between the Indian manufacturer Ranbaxy and the South African manufacturer Adcock Ingram.
Boehringer-Ingelheim will also license its product to two further companies.
Both companies will receive royalties of no more than 5%. GlaxoSmithKline had originally asked for a royalty of 30%, and Boehringer a royalty of 15%.
In a statement issued this morning, the Treatment Action Campaign called on other pharmaceutical companies to follow the example set by GlaxoSmithKline and Boehringer-Ingelheim.