South Africa’s Competition Tribunal To Hear GlaxoSmithKline AIDS Drugs Pricing Case
South Africa's Competition Tribunal has agreed to hear a case claiming that the pricing policies of GlaxoSmithKline -- the world's largest manufacturer of antiretroviral drugs -- violate the country's Competition Act, South Africa's Business Day reports (Kahn, Business Day, 7/27). In the lawsuit, the Los Angeles-based AIDS Healthcare Foundation and several South African individuals claim that GSK used its market dominance to charge high prices for its drugs. AHF also alleges that because of GSK's drug pricing, it has been forced to deny treatment to HIV-positive people because the organization could not afford to purchase GSK's drugs. South Africa's Competition Commission has ruled that AHF has a valid case and has referred the case to the tribunal, which has the authority to impose fines on the drugmaker (VOA News, 7/25). AHF has 20 days to file the case with the tribunal, which then will set a date for a hearing (Rogow, SAPA/News24.com, 7/26). The tribunal also has ordered GSK to pay for AHF's legal costs in the case, according to an AHF release (AHF release, 7/23). GSK on Monday said that it is considering appealing the decision to South Africa's High Court, according to company spokesperson Dudu Ndlovu (Associated Press, 7/26).
The Competition Commission in October 2003 ruled that GSK and Boehringer Ingelheim violated the country's competition act by setting antiretroviral drug prices too high and refusing to license their patents to generic drug manufacturers. The tribunal in December 2003 approved a settlement between GSK, Boehringer and the South African AIDS treatment advocacy group Treatment Action Campaign in which the drug companies agreed to grant licenses to four generic drug makers to manufacture their patented antiretroviral drugs (Kaiser Daily HIV/AIDS Report, 12/11/03). However, AHF was not party to the settlement negotiations and has said that it is filing the suit with the tribunal in order to seek civil damages, AHF lawyer Musa Ntsibande said. If the tribunal rules in favor of AHF it may impose fines of up to 10% of the company's turnover, according to Business Day (Business Day, 7/27). AHF said that GSK had not fulfilled its promise to make the drugs more widely available, but added that because Boehringer has fulfilled the terms of the settlement, the company would not be included in the lawsuit. GSK South Africa said that that accusations were "unfounded," adding, "We are progressing well with the terms of the settlement" (Reuters/SABC News, 7/26).