GSK at Odds with Activists

Johannesburg, South Africa-GlaxoSmithKline announced in October that it had licensed Aspen Pharmacare to manufacture three AIDS products: Retrovir-AZT (zidovudine), Epivir-3TC (lamivudine), and Combivir (zidovudine/lamivudine). The products can be distributed only to the public, including the government, non-governmental organizations (NGOs), and charitable bodies accredited by the World Health Organization (WHO).

GSK and Shire-lamivodine's patent holder-waived their rights to royalty payments. Instead, a 30-percent fee on net sales will be paid to NGOs managing AIDS programs in South Africa.

GSK's move came in response to a request from Aspen to manufacture the products and is reportedly a way of increasing access to drugs. If successful, it could be the template for similar efforts in other countries.

But Nathan Geffen of the Treatment Access Campaign says the move will have little benefit. The medicine's price may come down, but, he claims, unless the offer is made to the private sector as well, it's useless. He says the move is intended to protect the company from other attempts to widen access to medicines.

Jamie Love of the Consumer Project on Technology in Washington says GSK announced its deal on the day that a subsidiary of the Indian generics company Cipla lodged a complaint with the Competition Commission alleging that GSK and Boehringer Ingelheim abused their patents by charging excessively high prices. Cipla is seeking a license to manufacture the antiretrovirals at a far lower cost than Aspen.

Love says the deal is a great PR ploy intended to maintain the company's monopoly rather than to extend supply because Aspen alone cannot supply the region's needs.

He says the royalty payments can be viewed as a way to control NGOs' purse strings.