Millions will benefit after GSK and BI license generic manufacturers to produce AZT, lamivudine and nevirapine

Graham McKerrow, HIV i-Base

Two of the world’s biggest pharmaceutical companies have signed an agreement with a group of South African AIDS activists that will result in affordable medicines for millions of sub-Saharan Africans.

The ground breaking deal marks a triumphant end to a legal, political and media campaign against the companies, which, as we reported in the last issue of HTB, resulted in the South African Competition Commission finding that GlaxoSmithKline (GSK) and Boehringer Ingelheim (BI) had contravened the Competition Act by denying competitors access to essential facilities and by charging excessive prices.

The companies signed the agreement with the Treatment Action Campaign (TAC), the Congress of South African Trade Unions, other organisations, four people living with AIDS and four health workers. The activists say the agreement “goes well beyond what could conceivably have been won by pursuing the prosecution of the complaint under the Competition Act”.

In October 2003, the Clinton Foundation brokered a deal that ensured that generic companies would sell triple combination therapy to sub-Saharan governments for $140 per patient per year. TAC says the new agreement between the activists and the companies means the Clinton deal can be implemented immediately.

GSK has agreed to grant licences to four generic companies to produce and/or import, sell and distribute AZT and lamivudine. BI will grant licences to three generic companies to produce and/or import, sell and distribute nevirapine. GSK and BI will receive royalties of “no more than 5% of net sales of the antiretroviral medicines”. Before the agreement, BI was demanding royalties of 15% and GSK wanted 30%.

Previous agreements have applied to the supply of drugs only to the public sector but this deal covers the private sector as well. For the first time, the generic manufacturers will be allowed to export the drugs to all 47 sub-Saharan countries.

The agreement also allows the generic manufacturers to produce the drugs in combination with each other and/or other drugs for which they have licences, which will allow multi-drug fixed-dose combinations, currently made by separate companies, to come onto the market as single pills. The licences cover adult and paediatric formulations of the drugs.

The TAC has declared that in the event of GSK or BI not complying with any aspect of the agreement, they will return to court to have it enforced. The TAC has also warned the generic producers that it will monitor their prices as closely as it monitors the prices of brand name medicines.

The TAC has called on other major pharmaceutical companies such as Merck, Roche and Abbott to come to similar agreements



It is easy to knock the Global Fund for doing too little, too late and imperfectly but it is a slim machine that deserves credit for extracting more than $2 billion from rich countries and getting it out to projects in poorer countries. It is no mean feat to finance ARV treatment for 700,000 people, testing and counselling for 35 million and care for 1 million orphans as well as treatment for 3 million people with TB and the provision of 64 million bed nets.

Richard Stern’s criticisms (above) of what is happening on the ground in Latin America are, however, serious and from a credible source, so the Global Fund needs to investigate them and respond.

South African activists are to be congratulated on another triumph in their long campaign for affordable treatments for the citizens of their own and neighbouring countries. Merck, Roche and Abbott should offer similar licences for generic producers and not waste time by waiting to be dragged through the courts and media, as did GSK and BI – at the cost of many lives and serious damage to those companies’ reputations.

Companies, governments, NGOs and other agencies and individuals – the AIDS community – must now focus on the ‘3 by 5’ target which, although it will take another two years to treat just half of those who need ARVs, sets the world an achievable goal and would represent significant progress.

This July the AIDS community will gather for the 15th International AIDS Conference, this time in Bangkok, and we will hold each other to account as to just how much has been achieved since we met in Barcelona in 2002 and how to reassess our priorities. The conference banner is “Access for all” and we will learn from each others’ experiences, not least from activists who have successfully confronted obstructionist government and multinationals.


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