S. African Commission Rules GSK, Boehringer Ingelheim Must Allow Generic AIDS Drug Licenses; GSK Announces Drug Price Cut
South Africa's Competition Commission on Thursday ruled that drug companies GlaxoSmithKline and Boehringer Ingelheim have violated the country's Competition Act of 1998 by setting antiretroviral drug prices too high and by refusing to license their patents to generic drug manufacturers, Reuters reports. The commission recommended to the Competition Tribunal -- which has enforcement powers -- that the two companies be forced to allow generic licenses in exchange for royalties and be required to pay a fine of 10% of their annual antiretroviral sales for each year that they have violated the 1998 law (Chege/Ginsberg, Reuters, 10/16). The AIDS Healthcare Foundation -- the largest nongovernmental provider of AIDS care in the United States -- filed a complaint with the commission against GSK in January, claiming that the company's high drug prices block access to antiretroviral treatments. Musa Ntsibande, the attorney representing AHF in South Africa, said that the complaint alleged that GSK "abused its dominant market position in contravention" of the country's Competition Act and was "engaging in excessive pricing of its drugs to the detriment of the consumer" (Kaiser Daily HIV/AIDS Report, 1/29). Approximately 5.3 million South Africans are HIV-positive, Reuters reports. Although some pharmaceutical companies have made "steep" price cuts for antiretroviral drugs and generic makers have brought market competition, the drugs remain out of reach for the majority of HIV-positive individuals in sub-Saharan Africa, according to Reuters.
GSK Lowers Price for Combivir
GSK on the same day as the commission's ruling announced an additional price cut for its antiretroviral drug Combivir, which combines zidovudine and lamivudine into one pill, according to Reuters (Reuters, 10/16). The company will lower Combivir's price in developing countries from 90 cents per day to 65 cents per day, a reduction made possible by manufacturing improvements and economies of scale, according to a GSK release. GSK also announced that it will extend the voluntary license granted to Aspen Pharmacare -- sub-Saharan Africa's largest generic drug maker -- to manufacture and sell generic versions of its antiretrovirals. GSK CEO Jean-Pierre Garnier said that the company's actions "demonstrate our commitment to playing an integral role in the global response [to HIV/AIDS] through sustainable preferential pricing, partnership and community investment." Dr. Jack Chow, assistant director-general for HIV/AIDS, tuberculosis and malaria at the World Health Organization, welcomed GSK's announcements, saying, "When combined with the building of health infrastructures, innovative public-private partnerships and the training of national health workforces, the company's efforts are a major gain in the campaign in support of people living with HIV/AIDS" (GSK release, 10/16).
AHF said in a statement that the commission's ruling "vindicated" its campaign to "reign in" GSK's "abuses," adding that the commission's judgment "proves that GSK's greed has indeed cost many lives." AHF President Michael Weinstein called on the Competition Tribunal to immediately approve the commission's recommendations, adding, "The time has come for GSK to stop being a rogue company and join the ranks of corporate responsibility" (AHF release, 10/16). GSK said that it remains in discussions with the commission. A spokesperson for Boehringer said that the company is "carefully studying the [commission's] reasoning that they have used in order to consider us a dominant company, when in August of this year they reached a totally different decision about the same product and a similar complaint." Boehringer manufactures the antiretroviral drug nevirapine, which is used to prevent mother-to-child HIV transmission. The spokesperson said that Boehringer is considering several options to increase access to medicines, including voluntary licenses if "safety monitoring is ensured." The Boehringer spokesperson said that the company has "reasonable pricing -- our prices are low as they are now." If the tribunal upholds the commission's ruling, the money collected from fines will go to the South African government, Competition Commission Manager Zolile Ntukwana said, according to Reuters (Reuters, 10/16).