[e-drug] GSK licenses ARVs to South African generic manufacturer

[andy@healthlink.org.za]

E-DRUG: GSK licenses ARVs to South African generic manufacturer
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[GSK is the second multinational to allow South Africa's generic
manufacturer Aspen Pharmacare to make generic copies of its antiretrovirals.
GSK will allow the local generic production of AZT and 3TC. Earlier, BMS
allowed Aspen Pharmacare to make generic ddI and d4T.

The GSK move shows a changed strategy among multinationals: rather than
selling
their own "A-brands" at strongly reduced costs (with the risk of parallel
export and spoiling their profitable USA and EU markets!), the multnationals
are now opting for the "controlled" release of African made generic copies.
These "B-drugs" will only be registerable in African countries; this will
avoid polluting their profits in USA and EU, while at the same time being
able to avoid compulsory licenses and warranted criticism by NGOs and
African governments that they are not making their ARVs available to the 25
million HIV+ Africans.

The definition of "NGO" needs to be clarified: recently Abbott allowed its
ARVs to be sold at discounted rates through all 2000 members of the Southern
African HIV Clinicians Society. This effectively (but not officially!) means
that most private sector patients have access to the cheaper drugs. It will
have to be seen whether GSK will also make its "cheaper" ARVs available to
the SA HIV Clinicians Society, and thereby effectively to South Africa's
private sector.

MSD, Boehringer Ingelheim and BMS made their ARVs already available to the
SA private sector some months ago.

Roche is now the only remaining company which has so far not yet made a
serious effort to lower its ARV prices in SA's private sector.

As Jamie love observed, USD 1.80 per day is more expensive than current
Indian generic prices. And why should AIDS patients pay a 30% tax for an HIV
fund??

Message copied from druginfo with thanks. NN]

Hi all

Here's the news of the GlaxoSmithKline (GSK) voluntary license
issued to Aspen. Below it I have attached some comments from
Jamie Love of the US-based Consumer Project on Technology
(CPT), who has been working closely on seeking compulsory
licenses for anti-retroviral drugs in South Africa.

To my mind, the single greatest problem with the GSK license is
that Aspen is restricted to selling their version of Combivir to the
state or NGOs. As was pointed out by Dr Leon Regensberg (of
Medscheme's Aid for AIDS unit) in an interview quoted by the
Sunday Times, prices are important in the private sector as well.
Dropping the prices of such drugs will not only allow a greater
number of medical aid schemes to consider offering ARV cover (or
extending existing cover from double to triple drug regimens), but it
will also enable more of the larger employers whose workers are
not necessarily on medical aid schemes to offer such drugs from
occupational health facilities (e.g. those operated by mining
houses). As Jamie points out, if the State does not issue a tender
for the product, will it be worth Aspen's while to gear up to
manufacture the product? Additionally, how will an "NGO" be
defined in the license? The non-government, not-for-profit sector in
South Africa is small - e.g. the few church-owned hospitals still
operating.

regards
Andy
~~~~~

 http://www.cnn.com/2001/WORLD/africa/10/07/aids.glaxo.reut/index.html

Glaxo acts over S. Africa drug row
October 7, 2001 Posted: 6:34 AM EDT (1034 GMT)

LONDON, England (Reuters) -- GlaxoSmithKline Plc said on Sunday it had
handed over rights to its market-leading AIDS medicines in South Africa
to a local generic drug firm, in an attempt to defuse a continuing row
over access to treatment.

The move comes six months after 39 pharmaceutical companies backed down
in a landmark court battle with the South African government, since when
there has been little progress in improving the flow of life-saving
drugs to millions infected with HIV.

Drug companies, under fire for not doing more to help poor countries,
are trying to perform a balancing act by cutting prices in Africa while
not jeopardising their profitable premium markets in North America and
Europe.

Aspen Pharmacare, South Africa's largest generic company, has been
granted a voluntary licence on patents to GSK's antiretroviral drugs AZT
and 3TC, and a third pill -- Combivir -- which combines the two.

GSK and another British firm, Shire Pharmaceuticals Group Plc, which
licenses 3TC to GSK, will waive their rights to royalties on sales. In
exchange, Aspen will pay 30 percent of net sales to one or more
non-governmental organisations (NGOs) fighting HIV-AIDS in South Africa.

Industry sources said Aspen's generic Combivir would cost around $1.80
per patient a day, with AZT priced at $1.60 and 3TC at just over 60 U.S.
cents. That is still a premium to the $1-a-day some Indian generic
drugmakers are offering for AIDS combination therapy in Africa.

Aspen's locally made versions of the drugs will be distributed to the
government, NGOs and charities, with GSK continuing to supply other
markets.

Aspen Chief Executive Stephen Saad, whose company already has licences
on two AIDS drugs from Bristol-Myers Squibb Co, said the South African
health service would now have access to range of affordable
antiretroviral drugs.

But the success of the scheme will hinge on the response of the
government -- in particular, whether or not the health ministry decides
to offer up a state tender for Aspen's generic product.

There was no immediate reaction from Pretoria, which has slammed
companies in the past for trying to restrict access to cheap supplies of
AIDS drugs, leading to this year's court case over the right of poor
countries to import cut-price medicines.

South Africa's government -- faced with the largest number of HIV-AIDS
cases of any country in the world -- has pursued a controversial policy
on the disease.

President Thabo Mbeki touched off a storm of protest by questioning the
causal link between HIV and AIDS and the efficacy of antiretrovirals
such as AZT.

His ministers have resisted the use of antiretroviral drugs in the state
health sector on cost and safety grounds, despite the country having
close to five million people living with the deadly virus.

The Treatment Action Campaign pressure group, which was a key ally in
the earlier court cases against the drug industry, threatened in August
to take the government to court for denying HIV-positive pregnant women
drugs that cut the risk of transmission to their newborns.

The global market for AIDS drugs, which is dominated by GSK, is
estimated at around $4 billion a year. Adding in associated infections
takes the total nearer $10 billion -- with most of the money to be made
in the world's biggest drugs market, the United States, where
combination therapy can cost $15,000 a year.

Copyright 2001 Reuters. All rights reserved. This material may not be
published, broadcast, rewritten, or redistributed.

~~~~~

Comment by James Love, Consumer Project on Technology, on
GSK/Aspen deal
FMI mobile: 1.202.361.3040, love@cptech.org

"Everyone has been expecting Aspen to cut a deal with one or
more big PhRMA player with a voluntary license for one or more
ARV drugs.  The assumption is that the big pharma companies will
seek to undermine the current CIPLA compulsory licensing effort,
or a parallel patient-led compulsory licensing effort that is in the
works in South Africa.   By issuing the voluntary license, GSK may
argue in court that the compulsory license is not needed."

"There are not many details yet on the GSK/Aspen deal, so we'll
have to take a harder look when more information is available.
Judging from news reports, it seems as though the Aspen prices
will be a great deal higher than the prices available from other
generic suppliers.  At $1.80 per day for the Aspen version of
combivir, with limited distribution. According to some reports
Aspen will only sell to NGOs, charities and the government, it
appears to only shave $.20 per day off the current $2 per day GSK
government price for combivr.  In contrast, other generic firms have
announced prices below $1 per day for three drug cocktails, and
we have one offer of a three drug combination for $.67 per day.  The
price of $1.60 per day for AZT alone is almost the same price as for
the Aspen version of combivir.  It is our opinion, judging from the
prices offered by other generic firms currently barred from market
entry by GSK patents, that these prices are still far too high.  We
also reject any deal that does not open up the commercial market
to competition, which is not only the best opportunity for expanded
access right now, but also essential for the generic firms to obtain
sufficient economies of scale."

"I think the limited benefits of the GSK/Aspen deal show how
important it is to lower entry barriers and encourage real
competition."

One novel aspect of the deal is that GSK will reportedly forgo
royalties, having 30 percent of the sales given to NGOs involved in
HIV work.  There are some benefits to such an agreement, and
some risks too, if it gives GSK too much influence on the funding of
local NGOs.   The 30 percent royalty figure is also very high, and
may be used to argue for similar high royalty rates in other
compulsory licensing proceedings.  It is a bit odd to charge a 30
percent royalty for sales to NGOs, and then give the money back
to certain NGOs selected by the drug companies."

--
James Love
Consumer Project on Technology
http://www.cptech.org
1.202.380.3080 fax 1.202.234.5176
mailto:love@cptech.org
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~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Andy Gray
Discipline Chair: Pharmacy Practice
School of Pharmacy and Pharmacology
University of Durban-Westville
andy@healthlink.org.za
PO Box 1580 Westville 3630
Tel: 27-31-2044358  Fax: 27-31-2044792

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