Companies To Allow Generic HIV/AIDS Drugs In South Africa

Following an out-of-court settlement with South African's Treatment Action Campaign, pharmaceutical companies GlaxoSmithKline and Boehringer Ingelheim agreed today to permit large-scale manufacture of generic versions of their patented HIV/AIDS drugs for the country. The drug makers said they would grant more licenses to generic firms to produce and import antiretroviral drugs, and would charge no more than a 5 percent royalty fee on the sales of those drugs in South Africa, where an estimated 5.3 million people have HIV/AIDS.

In October, South Africa's Competition Commission alleged the firms were guilty of anti-competitive behavior over the sale of antiretrovirals and recommended they be fined and forced to allow generic drugs. Today, the regulator said it will not fine Glaxo, and was negotiating a similar arrangement with Boehringer. The U.K.-based Glaxo has already offered a license to one South African firm, Adcock-Ranbaxy, and extended an existing license to another local drugmaker. It is also considering two other possible licenses, a spokesman said. Boehringer will reportedly grant three licenses for the production and import of nevirapine, which is used to prevent HIV transmission from mothers to children.

In related news, the HIV/AIDS epidemic has reduced profits for many South African businesses, according to a study by the South African Coalition on HIV and AIDS published today. "Approximately a third of the companies surveyed reported that HIV/AIDS has already had a negative impact on profits, while more than half expect an adverse impact on profitability in five years' time," said agency spokesman Leighton McDonald.

Of the more than 1,000 company leaders interviewed over the past two months, 9 percent reported a significant impact on overall business and 43 percent said they expected a major impact in the next five years. About 30 percent had seen higher labor turnover, and more than 20 percent had incurred recruitment and training costs due to the disease. The HIV/AIDS epidemic had a smaller impact on the demand side of the economy, however, with less than 10 percent of business leaders reporting reductions in their sales. One major concern, according to McDonald, is that there has been little response to the epidemic among businesses. "Only a quarter of all the firms surveyed have implemented a formal HIV/AIDS policy," he said. (UN-Wire)