Cape Town — The Competition Commission is expected to announce today that pharmaceutical firms GlaxoSmithKline and Boëhringer Ingelheim have reached a settlement with activists over the licensing and pricing of their AIDS drugs.

The deal follows a complaint brought last year by a group of AIDS activists, including the Treatment Action Campaign, which argued that the firms had abused their market position to price their drugs too high.

Last month the commission found that the two firms had breached the Competition Act, and announced that it planned to refer the matter to the Competition Tribunal for prosecution.

The deal, brokered by the activists and drug firms, not only spares the firms scrutiny by the tribunal and the possibility of harsh penalties, but may also stem the damaging media attention they have received over their pricing policies.

It is understood that Glaxo and Boehringer have agreed to a 5% ceiling on the royalty fees that they will charge generic manufacturers who make licensed copies of the firms' patented AIDS drugs.