LONDON, Oct 7 (Reuters) - GlaxoSmithKline Plc said on Sunday it
had handed over rights to its market-leading AIDS medicines in
South Africa to a local generic drug firm, in an attempt to
defuse a continuing row over access to treatment.
The move comes six months after 39 pharmaceutical companies
backed down in a landmark court battle with the South African
government, since when there has been little progress in
improving the flow of live-saving drugs to millions infected
Drug companies, under fire for not doing more to help poor
countries, are trying to perform a balancing act by cutting
prices in Africa while not jeopardising their profitable
premium markets in North America and Europe.
Aspen Pharmacare, South Africa's largest generic company, has
been granted a voluntary licence on patents to GSK's
antiretroviral drugs AZT and 3TC, and a third pill -- Combivir
-- which combines the two.
GSK and another British firm, Shire Pharmaceuticals Group Plc ,
which licenses 3TC to GSK, will waive their rights to royalties
on sales. In exchange, Aspen will pay 30 percent of net sales
to one or more non-governmental organisations (NGOs) fighting
HIV-AIDS in South Africa. Industry sources said Aspen's generic
Combivir would cost around $1.80 per patient a day, with AZT
priced at $1.60 and 3TC at just over 60 U.S. cents. That is
still a premium to the $1-a-day some Indian generic drugmakers
are offering for AIDS combination therapy in Africa.
Aspen's locally made versions of the drugs will be distributed
to the government, NGOs and charities, with GSK continuing to
supply other markets. Aspen Chief Executive Stephen Saad, whose
company already has licences on two AIDS drugs from
Bristol-Myers Squibb Co (NYSE:BMY - news), said the South
African health service would now have access to range of
affordable antiretroviral drugs.
GOVERNMENT HOLDS KEY
But the success of the scheme will hinge on the response of the
government -- in particular, whether or not the health ministry
decides to offer up a state tender for Aspen's generic product.
There was no immediate reaction from Pretoria, which has
slammed companies in the past for trying to restrict access to
cheap supplies of AIDS drugs, leading to this year's court case
over the right of poor countries to import cut-price medicines.
South Africa's government -- faced with the largest number of
HIV-AIDS cases of any country in the world -- has pursued a
controversial policy on the disease. President Thabo Mbeki
touched off a storm of protest by questioning the causal link
between HIV and AIDS and the efficacy of antiretrovirals such
as AZT. His ministers have resisted the use of antiretroviral
drugs in the state health sector on cost and safety grounds,
despite the country having close to five million people living
with the deadly virus.
The Treatment Action Campaign pressure group, which was a key
ally in the earlier court cases against the drug industry,
threatened in August to take the government to court for
denying HIV-positive pregnant women drugs that cut the risk of
transmission to their newborns.
The global market for AIDS drugs, which is dominated by GSK, is
estimated at around $4 billion a year. Adding in associated
infections takes the total nearer $10 billion -- with most of
the money to be made in the world's biggest drugs market, the
United States, where combination therapy can cost $15,000 a