The Treatment Action Campaign (TAC) is celebrating what it calls a ”ground-breaking” decision on Thursday by the Competitions Commission that found two giant pharmaceutical firms culpable of charging excessive prices for anti-retroviral drugs and abusing their dominant positions in the market.
The firms, GlaxoSmithKline South Africa and Boehringer Ingelheim, will have to appear before the Competitions Tribunal — the commission’s prosecuting arm — to defend their contravention of the Competitions Act.
The finding is a result of a complaint made a year ago by a group of 12 people affected by and infected with HIV/Aids who alleged the prices charged by the drug companies are directly responsible for the ”premature, predictable and avoidable deaths of people living with HIV/Aids, including adults and children.
The importance of this case ties into the need for anti-retroviral drugs to be accessible to the people living Aids. Currently there are no generic version of the anti-retroviral drugs sold in the country and therefore the multinational cartels are able to monopolise the markets through their patent rights.
In India and Brazil generic versions of these drugs cost a fraction of the price compared to those manufactured by the patent-holding multinationals. Competition by generics would drive down the costs of these patent drugs.
The TAC welcomed the decision by the commission to find the firms guilty of excessive pricing.
”We are encouraged that both GlaxoSmithKline South Africa and Boehringer Ingelheim will have to defend their conduct and their pricing to the tribunal,” said Fatima Hassan, Aids Law Project lawyer.
”The stark fact is that for the cost of one treatment from the brand-name companies four people with Aids can be treated with cheaper high quality ‘generic’ copies of the same medicines. In South Africa, tens of thousands of people are dying every year because excessive prices are charged for life-saving anti-retroviral medicines,” she told the Mail & Guardian.
The Competitions Commission has also recommended to the tribunal that a penalty of 10% of the annual turnover of the firm’s sales of anti-retroviral drugs be charged for each year that they have been found to have violated the Competitions Act.
The Tribunal could also make an order authorising any company to use the firms’ patents to market anti-retroviral generics.
Menzi Simelane, commissioner at the Competition Commission, said: ”Our investigation revealed that each of the firms has refused to license their patents to generic manufacturers in return for a reasonable royalty. We believe that this is feasible and that consumers will benefit from cheaper generic versions of the drugs concerned. We further believe that granting licenses would provide for competition between firms and their generic competitors.”
He said: ”Indeed the very goals of our Competition Act — promoting development, providing consumers with competitive prices and product choices, advancing social and economic welfare and correcting structural imbalances — have been made difficult in this context by the refusal of the respondents to license patents.”
GlaxoSmithKline South Africa and Boehringer Ingelheim hold patents on certain anti-retroviral medications used to treat HIV/Aids. GlaxoSmithKline South Africa holds patents in South Africa on AZT (branded as Retrovir), Lamivudine (branded as 3TC) and AZT/Lamivudine (branded as Combivir). Boehringer Ingelheim holds patents in South Africa on nevirapine (branded as Viramune).