AIDS Drug Battle Deepens in Africa
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By Rachel L. Swarns
JOHANNESBURG, March 7 - An Indian maker of generic drugs asked South
Africa today to give it the right to sell eight AIDS drugs currently
available only from their patent-holding multinational companies at
high prices. The announcement by Cipla Ltd. of Bombay, a large pro-
ducer of drugs, opened a new front in the struggle over patented
medications in a country, and continent, ravaged by AIDS and too poor
to afford life-prolonging treatments.
South Africa has more people infected with H.I.V. than any other
country on earth - roughly 20 percent of its adults carry the virus.
But few can afford the US$ 10,000 to US$ 15,000 a year that is the
normal cost of the AIDS regimen in the West. Cipla's move came as a
leading producer of anti-H.I.V. medicines, Merck, said it was slash-
ing prices in South Africa and other developing countries on two im-
portant AIDS drugs in a developing price war. It began last month
when Cipla offered to sell drugs to South Africa and other govern-
ments for US$ 600 a year per patient, or about US$ 400 below the
price offered by most big drug companies that hold the patents. But
South Africa could take advantage of the offer only if it compelled
the patent holders to license the drugs, for instance on the ground
that in national emergencies, demand was not being met at fair
prices.
In a letter to the Department of Trade and Industry today, Cipla said
it was asking for a patent commissioner to grant this kind of compul-
sory licensing. Such a decision could give Cipla the upper hand in
the African market. The multinationals argued that they need high
prices in order to carry out their research, even though the prices
put the remedies out of the reach of millions of people with H.I.V.
The price cuts are welcome news to Africans, but even the much lower
costs could overwhelm many countries, whose per capita incomes might
be half of the annual drug cost. South Africa has not indicated at
what price it would be willing to buy, and presumably it would rely
on international donors to bridge the gap between the lower charges
and its ability to pay.
AIDS developments have consumed South Africa this week. Thousands of
banner-waving demonstrators have marched the streets demanding drug
price cuts, and the big drug makers went to court to block a law that
in their view undercuts patent protections. They contend the law
gives the health minister too much power to allow cheaper versions of
patented drugs. That case was postponed until next month, but pres-
sures on the drug industry are growing. Merck said today that it
would make one of its major drugs, Crixivan, available at US$ 600 per
patient per year, and another, Stocrin, available for US$ 500. They
are taken in combination with other drugs as an H.I.V. cocktail.
Merck said that at those prices, it would make no profits on the
sales. In the United States, Crixivan costs more than $5,000 per pa-
tient per year. Other companies have also responded to the price
pressures. Last month, GlaxoSmithKline P.L.C. said it would offer
discounted drugs to employers and non-profit groups.
Two weeks ago, the Bush administration agreed to continue the policy
of not seeking sanctions against poor countries ravaged by the AIDS
epidemic, even if American patent laws are broken, so long as the
country abides by World Trade Organization treaties. South Africa is
riding a wave of international support after being pilloried for de-
manding low-cost drugs and neglecting expert opinion on the cause of
AIDS.
"There's an increasing understanding that the epidemic has catastro-
phic implications in many developing countries," Julian Fleet, a sen-
ior adviser on law and ethics at the United Nations AIDS agency, said
in a telephone interview from Geneva. "Increasingly, governments in
the North are realizing that mechanisms like compulsory licensing are
tools that should be considered to make medicines more affordable,"
Mr. Fleet said. "There has certainly been a change in the last year
to 18 months." It has been the images of the dying, in part, that
have forced the climate to change.
In December, the United Nations reported that 25.3 million people in
sub-Saharan Africa - the bulk of the world's infected - had H.I.V. or
AIDS. Last year, 2.4 million in the region died of AIDS. They are dy-
ing in flimsy metal shacks and in crowded hospital wards. Abandoned
babies wither in the arms of strangers. Parents bury children. And
relatives and friends, doctors and nurses, are unable to offer the
medicines that could save thousands of lives.
In May five multinationals, backed by the World Health Organization
and other United Nations agencies, offered to sell their components
to poor nations at much lower prices. One was Merck. Negotiations
have gone slowly. To date, Uganda, Senegal and Rwanda have agree-
ments. The companies refuse to say how much they are charging, but
the cost of a typical cocktail in Senegal is US$ 1,000 a year, ac-
cording to the care agency Doctors Without Borders. Merck says it
will now offer each of two AIDS drugs at roughly half that price. If
Cipla were to win a license, it would offer eight drugs and their
combinations at an annual cost per patient of about US$ 600. Cipla
officials, who have offered to pay royalties for the license, said
that before they took their step today they asked several multina-
tionals to grant the license voluntarily. "We've had no concrete re-
sponse from the multinationals to date," said Dr. Yusuf K. Hamied,
chairman of Cipla, in a telephone interview from Bombay. "We have now
decided it is best to approach the government. What we've offered is
an opportunity to Africa. It's up to the Africans to take it up."
But the procedure to win a compulsory license can be slow and costly.
Cipla must first file its request with the commissioner of patents,
who will then hear arguments from both sides, said MacDonald Net-
shitenzhe, South Africa's registrar of patents in the Department of
Trade and Industry. Such cases can take years. Cipla's supporters,
including officials at the Consumer Project on Technology, a Washing-
ton group started by Ralph Nader, note that drug company officials
have repeatedly suggested compulsory licensing as a preferable alter-
native to the South African drug access law they will challenge in
court next month. That law, the drug companies say, is overly broad
and would give the health minister too much power. Several officials
at the big drug companies today said they did not know enough about
Cipla's decision to comment. Others said they would argue against the
plan, saying South Africa has not taken advantage of the discounted
drugs it has been offered. (South Africa argues that many of these
offers are short-term and not explained in detail.)
"If they accuse us of abusing our patent position, we can only say
that we have offered the governments of all developing countries
preferential pricing," said Kevin McKenna of Boehringer Ingelheim
Pty. Ltd. in South Africa, which produces the anti-AIDS drug nevirap-
ine. "The South African government has not yet come back to us in re-
sponse to our letter, so I think we could hardly be accused of abus-
ing our patent."
Officials at GlaxoSmithKline said that petitioning under South Af-
rica's patent law "would be the appropriate course of action should
Cipla feel that their request is justified." But they added that they
did not know enough about Cipla's plans to comment further.
Jo-Anne Collinge, a spokesman for the Health Department, said govern-
ment officials, too, were waiting to hear details about how Cipla
planned to produce the drugs, the scale of production and the likely
pricing. The government itself has never requested a compulsory li-
cense, even though it can under the law, because it feared retalia-
tion from its Western trading partners, which threatened sanctions
when the idea was debated a few years ago. But Cipla's overture alone
might force the drug companies to change, some experts say. "Just the
pressure of the possibility of this could be enough to force the
pharmaceutical companies to really act," said Frederick M. Abbott, a
government consultant who specializes in international trade law and
intellectual property. "The talk from the pharmaceutical companies
about intending to provide low-cost pharmaceuticals goes back years,
and every day this goes on, people die in South Africa," said Mr. Ab-
bott, who is also a visiting law professor at the University of Cali-
fornia at Berkeley. "The necessity is not to have lawyers debating
statutory language," he said. "The necessity here is getting drugs."
Copyright 2001 The New York Times Company
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