Tamar Kahn, Science And Health Editor
27 July 2004
Cape Town — AIDS drug prices are at issue again
The Competition Tribunal is set to reopen an investigation into the pricing practices of pharmaceutical giant GlaxoSmithKline, after announcing yesterday that it had agreed to hear the AIDS Healthcare Foundation's (AHF's) complaint against the company over its AIDS drugs prices.
Glaxo is the world's largest manufacturer of AIDS drugs, with patents on three of the most widely used antiretroviral medicines: AZT (branded Retrovir), lamivudine (3TC) and the two combined (combivir).
The foundation is a US-based nonprofit organisation with one clinic in SA.
Its action against Glaxo brings a long-standing battle between the two organisations to South African turf AHF unsuccessfully challenged Glaxo's patents on AZT and 3TC in the US and tried to get the US Food & Drug Administration to withdraw approval for Glaxo's AIDS drug Trizivir. It also filed a false advertising suit against Glaxo, without success.
Last year the commission, the investigative arm of the tribunal, found that Glaxo and German drug maker Boëhringer Ingelheim had charged excessive prices on the AIDS drugs front.
It also said they had abused their dominant market position to stifle competition in the generics market because they had only given manufacturing licences to Aspen Pharmacare to make cheap copies of their patented AIDS drugs.
The commission's probe was based on a complaint lodged by the Treatment Action Campaign, joined six months later by a complaint from AHF, alleging that Glaxo was charging excessive prices for its AIDS drugs.
Glaxo and Boëhringer reached a settlement with the commission in December last year, which included agreements to allow more companies to make generic AIDS drugs.
They also agreed to reduce their royalty fees to 5%, and to allow sales to both public and private sector markets in sub- Saharan Africa.
Due to this deal, the matter was not referred to the tribunal.
AHF was not party to the settlement negotiations, said legal counsel Musa Ntsibande, and wanted the matter referred to the tribunal so that it could seek damages in the civil courts.
If the tribunal finds in favour of AHF, and rules that Glaxo has engaged in anticompetitive behaviour, it may fine the company up to 10% of turnover.
Glaxo said it was "disappointed" in the tribunal's decision to hear AHF's complaint, and was considering appealing the decision in the high court.
Yesterday's announcement by the tribunal comes after a protracted exchange between the authorities and AHF's legal counsel over the length of time the foundation took to object to the commission's settlement.
The foundation failed to meet the 20-day deadline, and then asked the tribunal to overlook this because it was not party to the commission's settlement agreements, said Ntsibande.
AHF now has 20 days in which to file its complaint with the tribunal, after which a date will be set for the hearing.
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