Drugmakers GlaxoSmithKline and Boehringer Ingelheim announced Tuesday that they have agreed to allow the widespread manufacture of cheap generic versions of their patented anti-HIV drugs in South Africa. In an out-of-court settlement with AIDS activists the companies agreed to grant more licenses to generic firms to produce and import antiretroviral drugs. The deal comes after South Africa's Competition Commission found the companies guilty in October of anticompetitive behavior over the sale of AIDS drugs and recommended to the Competition Tribunal--an enforcement body--that they be fined and required to allow the manufacture of generics. The commission said today it will not fine Glaxo for anticompetitive behavior, and a similar agreement is being discussed with Boehringer.
Activist group Treatment Action Campaign said, under the terms of the deal, the two firms would charge no more than a 5% royalty fee on the sales of generic drugs in South Africa. According to a Glaxo spokesman, the company will extend a voluntary license it granted to local firm Aspen Pharmacare in October 2001 for the production of antiretrovirals to other companies. A second firm, Thembalami Pharmaceuticals, has already been offered another license. Glaxo would consider applications for another two possible licenses for producing copies of its drugs AZT and 3TC. Boehringer will grant three licenses for the manufacture and import of Viramune to prevent mother-to-child HIV transmission. The first license has already gone to Aspen.