Deal paves way for generic HIV drugs

The deal also permits the drugs to be sold in all 47 sub-Saharan African countries, and is the first agreement of its kind in Africa, where the deadly disease has hit hardest, infecting more than 26 million people.

The agreements, brokered by South Africa's Competition Commission, are expected to result in another major drop in price for the antiretroviral drugs because of a more competitive market, commission officials said. Currently, the lowest price for antiretroviral medicine in the developing world is slightly less than $300 annually; the cost can be more than $10,000 in the United States and other wealthy countries, where the drugs are protected under patent laws.

The two companies, GlaxoSmithKline and Boehringer Ingelheim, reached separate agreements with the Treatment Action Campaign, the activist group said. The Competition Commission said it had finalized an agreement with GlaxoSmithKline, and is in negotiations with Boehringer.

"For us, this is an historic occasion," said Zackie Achmat, chairman of the Treatment Action Campaign, who at a news conference wore a "HIV Positive" T-shirt and held his purple pillbox containing antiretroviral drugs. "It's come late, it's come at a cost of many thousands of lives, but we now want to say to the drug companies, `Let's put this behind us, and move on.' "

The agreement followed a ruling by the Competition Commission in October that GlaxoSmithKline and Boehringer had violated the country's Competition Act by excessive pricing and refusing to license their patents to generic manufacturers in return for a reasonable royalty.

GlaxoSmithKline said it would allow four generic companies to produce and sell its drugs 3TC (lamivudine), AZT (retrovir), and combivir for a 5 percent royalty. Peter Bains, senior vice president for the company, said that while the drug makers believe the complaint was unfounded, it was "pleased" that the matter wasn't referred to the Competition Tribunal, where it feared a protracted process of hearings and investigations would have produced months of negative publicity.

"We want to continue to play our part in addressing South Africa's health care needs," Bains said, reading from a statement at the news conference. ". . . Perhaps more importantly, we are leading efforts to discover and develop new vaccines and medicines for AIDS."

While some pharmaceutical officials have said that awarding voluntary licenses for generic manufacturers to produce their drugs might lessen incentives for research and development, Bains said that would not happen as a result of this deal. He said his company now has 16 antiretroviral drug projects and three AIDS vaccine projects.

But he warned, "If there's no intellectual property protection, there will be no research and development. And if there's no research and development, there will be no future supply for antiretrovirals and vaccines."

Treatment Action Campaign officials said they also reached an agreement with Boehringer to allow three generic companies in South Africa to produce, import, or sell the antiretroviral medicine neviripine, which is used for adults in triple combination therapy as well as given to pregnant women in attempts to prevent passing HIV to newborns. Boehringer officials did not comment yesterday.

At the time of the complaint that led to yesterday's settlement, AZT and 3TC each cost about $1,200 a year per patient, while neviripine cost roughly $600 annually; AIDS activists now hope the prices for those three drugs combined will drop to as low as $300 in South Africa. Over time, advocates and complainants hope, the price for the triple combination therapy will fall to about $150 annually.

The complaint was first brought by Hazel Tau, an HIV-positive woman who nearly collapsed 14 months ago after announcing the litigation at a news conference, only to later find out the CD4 cell count in her blood had fallen to 9. A person's CD4 count measures the body's ability to fight off opportunistic diseases; if it drops below 200, doctors recommend antiretroviral therapy.

Tau, who now is on antiretroviral drugs thanks to an anonymous donor, said yesterday her CD4 count has rebounded to 380.

"I'm well," she said. "I represent a network of individuals, many of whom are too poor to buy the drugs. Let's not waste more time."

The fight against AIDS is a broad battle, with price reductions for antiretrovirals only one major goal, the activists acknowledged. South Africa, which has an estimated 5 million people infected with HIV, more than any country in the world, hopes to begin its rollout of AIDS treatment programs early next year. It comes just as the World Health Organization starts its ambitious plan to treat 3 million people by the end of 2005. Roughly 400,000 people in the developing world are currently on the AIDS drugs.

The work ahead includes training tens of thousands of community workers to monitor those on the medication; educating those infected that they must take the drugs every year; widescale prevention campaigns; major efforts to get more people to test for HIV; and work by activists, politicians, and others to decrease the stigma attached to the disease.

Several of the complainants named in the litigation talked yesterday about losing friends to AIDS at a numbing rate in the last year. But even with the drugs available, activists and experts acknowledged that the virus will continue to kill, if at a much slower rate.

Petunia Ngubane, a 38-year-old Soweto woman, was among the spectators at yesterday's news conference yesterday. A fourth-grade teacher and mother of three children, she lost her husband, Paul Matola Ngubane, to AIDS on June 16.

He was one of the complainants. "He had been on the drugs since 2001," she said. "He developed complications. This agreement is an achievement and will help many, many people, but as sometimes happens, they are not always enough."

John Donnelly can be reached at donnelly@globe.com.