GSK gives pan-Africa license to South African firm

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Glaxo Smith Kline has announced that Aspen Health Care, the South African generic drug manufacturer, has been granted voluntary licenses for three of the company’s antiretrovirals that will allow Aspen to supply the drugs throughout sub-Saharan Africa.

The announcement comes on the same day that South Africa’s Competition Commission decided that Glaxo Smith Kline had refused to license its patents to generic manufacturers in return for a reasonable royalty. The judgement also covers Boehringer-Ingelheim, manufacturer of nevirapine.

“We believe that this is feasible and that consumers will benefit from cheaper generic versions of the drugs concerned”, Competition Commissioner Menzi Simelane said today. “We further believe that granting licenses would provide for competition between firms and their generic competitors."

Glossary

generic

In relation to medicines, a drug manufactured and sold without a brand name, in situations where the original manufacturer’s patent has expired or is not enforced. Generic drugs contain the same active ingredients as branded drugs, and have comparable strength, safety, efficacy and quality.

Had GSK not granted the voluntary licenses today, it could have faced a penalty of 10% of the annual turnover of its antiretroviral products in South Africa for each year that it was found to have been violating the act. The case, brought by a group of treatment advocates and trade unionists, is now due to be adjudicated by the Competition Tribunal.

The licenses cover Retrovir (AZT, zidovudine), Epivir (3TC, lamivudine) and Combivir (lamivudine and zidovudine combination tablet). They allow Aspen to supply private or public sector purchasers in any country in sub-Saharan Africa. The licenses are unlikely to encourage the generic competition desired by the Competition Commission.

Glaxo Smith Kline also announced that it is reducing the price of Combivir from US$ 0.90 cents to 0.65 cents per day, implying an annual price of US$237 (compared to US$265 offered by the Indian company Ranbaxy for its zidovudine/lamivudine combination tablet).