The pact is one of the first price slashes in an initiative announced in May by five major pharmaceutical companies to provide drugs to poor African countries where the AIDS epidemic has taken it strongest hold.

"Glaxo Wellcome has agreed a price with the government of Senegal," Glaxo spokesman Philip Thomson told Reuters.

Its leading anti-AIDS drugs, Retrovir, Epivir and Combivir will be available for about $2 a day, he added.

"We're working quite closely with Uganda and Kenya," Thomson said, although no agreements had been reached yet.

Senegal said it had also negotiated bargain prices with Merck & Co. (NYSE:MRK - news) and Bristol-Myers Squibb (NYSE:BMY - news) in the United States. Switzerland's Roche Holding SA and Germany's Boehringer Ingelheim are also taking part in the initiative.

Boehringer has offered its drug nervirapine, which cuts mother-to-child transmission of the HIV virus that causes AIDS, free to poor nations for the next five years.

SEPARATE NEGOTIATIONS

According to Thomson each company is negotiating separate price reductions with African governments but it is all part of the same initiative brokered by the United Nations.

The deal was set up by UNAIDS, the U.N. agency entrusted with tackling the disease, but its senior technical adviser admitted when it was announced five months ago that the details still had to be sorted out.

"Clearly resources need to be found from within countries to pay for some of it. The question of what external finance is going to be required and where it is going to come from, and who is prepared to pay are all discussion we are still having," she said at the time.

The World Health Organisation (WHO) and the World Bank are also involved in the initiative.

Leading drug companies have come under increasing criticism for not doing enough to curb AIDS in the developing world. The prices of the drugs in the industrialised world are well beyond the means of poor African countries.

The reduced drugs will mean that the anti-AIDS drug cocktails that have prolonged the lives of AIDS sufferers in rich countries will be available in poor African nations.

Nearly 25 million people in sub-Saharan Africa are living with the AIDS virus.

In seven countries, all in the southern cone of the African continent, at least one adult in five is living with the virus. The disease has killed an estimated 19 million people worldwide.

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