WOZA Internet (Johannesburg) - March 9, 2001

Johannesburg - Siyaphila! An extraordinary price war is breaking out in the market for AIDS drugs in poor countries, as pharmaceutical giants seek to blunt a growing threat from generic-drug companies and recoup some moral high ground amid the crippling epidemic, according to a report in the Wall Street Journal on Wednesday.

At the end of 2000, an estimated 36.1 million people worldwide - 34.7 million adults and 1.4 million children younger than 15 years - were living with HIV/AIDS, according to UNAIDS.

More than 70 percent of these people (25.3 million) live in sub-Saharan Africa; another 16 percent (5.8 million) live in South and Southeast Asia.

Most of these people have no access to treatment, because the drugs are unaffordable, the infrastructure to provide drugs and monitor patients is insufficient or nonexistent and apparently, not enough political will exists to make use of all possible avenues to get the drugs to the patients.

President Thabo Mbeki and the health department are probably still reeling with shame about the international and local outrage following their public questioning of the link between HIV/AIDS, or at least their booming silence around the dissident debate.

The drug war currently raging is fed by a global campaign by AIDS activists - such as UK charity Oxfam - who accuse industry and rich governments of waging "an undeclared drugs war" against the world's poorest countries.

"World trade rules on patents for drugs to treat AIDS and other life- threatening conditions reinforce the link between ill-health and poverty, and widen the health gap between rich and poor," activists say.

Oxfam called in particular on GlaxoSmithKline - the world's biggest drugs group by sales and the largest supplier of HIV/AIDS treatments - to cut its prices and plough more investment into neglected diseases largely afflicting the poor.

Aside from a proliferation of drug offers from major multinational pharmaceutical companies in recent months, two Indian generic companies - Cipla and new entrant Hetero Drugs Ltd - are fighting each other to get a foothold in developing world markets, with Hetero offering Cipla's drugs at a cheaper price.

According to the Wall Street Journal, Hetero has already entered an agreement with a large South African generics firm, Aspen Pharmacare Ltd, to distribute Hetero's drugs - if government wins its lawsuit with the Pharmaceutical Manufacturers' Association - which has been postponed until mid-April - and allows for the importation of generic drugs.

Government concerns - that poor people's access to quality medicines is dependent on the goodwill of individual industry players - may be justified. But government itself is not without blame for the continued situation in which most HIV patients in this country are without treatment, and many dead AIDS patients' lives could have been prolonged and made productive with drugs.

These are some of the offers and developments in the HIV/AIDS drugs war: * a small US firm said on March 1 it was creating a R2 billion fund to buy AIDS drugs and distribute them free in Africa where price and infrastructure are huge barriers to keeping patients healthy. The company, Phyto-Riker, has the backing of the US Export-Import Bank, the government of Ghana and members of the Congressional Black Caucus in the effort * Indian generic drugmaker Cipla Ltd announced in February it would supply a triple cocktail of AIDS drugs to the world's poor at less than R8 a day, undercutting a discounted supply plan by multinational companies by around two- thirds. To date, Cipla has yet to receive acceptance from any developing country government or non-governmental organisation * GlaxoSmithKline Plc met market expectations with an 11 percent rise in underlying profit in February and promised to widen a scheme to supply poor countries with deeply discounted AIDS drugs * Health Minister Manto Tshabalala-Msimang confirmed late last November that Pfizer has made an offer to provide Fluconazole for use in the public sector for specified conditions (Fluconazole still has not reached SA patents, but arrived in SA on Thursday, according to the latest reports) * the Boehringer Ingelheim division of Jos Hansen & Soehne (East Africa) Limited launched a nine-year programme last November for the supply of Viramune (Nevirapine) for free to African countries, especially those with an annual per capita GDP of R24 000. Congo was the first to benefit * the Medicines Control Council granted a conditional Section 21 exemption for Biozole, a Fluconazole generic, last November The latest SA Health Review 2000 - launched at the end of February - confirms that drug expenditure puts an unsustainable burden on state coffers as the HIV/AIDS pandemic claims more and more victims, and contributes most significantly to the inequality in access to healthcare between the private and public sector.

"Public sector sales are expected to make up 24%, which translates to R59.36 per person not belonging to a medical aid scheme. In contrast, the per capita expenditure on prescription drugs in the private sector would be R800.29," according to the Review.

However, the pressure on pharmaceutical companies is not just building up in developing countries - industrialised countries are getting increasingly concerned about the large chunk taken out of health budgets for medicines.

They are following the fight about patent rights - and incidentally the fight for the ability to bypass patents and shop around for the cheapest drugs - with interest.

Promises abound, drugs have even arrived in the country that could be saving lives now. But while patients are waiting, accusations fly: * the Medicines Control Council is accused of not being fast enough in its approval of medicines * government is accused of not taking up existing offers, using the State Tender System to get drug bargains or using the Patent Law to grant compulsory licences * activists are accused of being too emotive, not getting their facts straight and not accepting invitations to negotiate with pharmaceutical companies * pharmaceutical companies are accused of drug profiteering and lack of transparency about how they come to charge the prices they charge The ongoing surge of the AIDS pandemic is said by experts to be going to kill one South African every minute in the next five years. The minutes are ticking by . . .