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Africa: Treatment Access Updates
AFRICA ACTION
Africa Policy E-Journal
April 30, 2003 (030430)
Africa: Treatment Access Updates
(Reposted from sources cited below)
This posting contains several updates on developments related to
access to AIDS treatment: (1) a notice from the Treatment Action
Campaign on the temporary suspension of their civil disobedience
campaign pending a new meeting with the South African government,
(2) two short press releases from the National Association of
People Living with HIV/AIDS (NAPWA) in South Africa against the
Pharmaceutical Manufacturing Assocation (PMA), and (3) an analysis
from Brook Baker of Healthgap of the recent move by GlaxoSmithKline
lowering the cost of its antiretroviral drugs.
Another posting today contains new press releases and other
material from Africa Action related to the Africa's Right to Health
Campaign.
+++++++++++++++++end summary/introduction+++++++++++++++++++++++
Treatment Action Campaign http://www.tac.org.za
TAC NEC RESOLUTION
29 April 2003
At a meeting on April 25th 2003 with Deputy President and SANAC
Chairperson, Jacob Zuma, TAC was asked to consider suspending its
civil disobedience (Dying for Treatment) campaign, pending a full
day meeting with SANAC on Saturday May 17th 2003 and its outcomes.
At a meeting of the TAC NEC, and several key allies, on April 29th
2003 it was agreed that the campaign would be suspended. This was
despite reservations expressed by several NEC and staff members who
stressed the urgency of changing government policy on ARV treatment
and the NEDLAC draft agreement. TAC NEC members also reiterated
concerns about whether SANAC has the power to act to save lives.
However we are suspending the campaign in the interest of ensuring
the fullest opportunity for government to prove its good faith and
to demonstrate that TAC's campaign is about saving lives. The
decision will be explained and defended at TAC branch meetings.
TAC will decide on whether to resume this campaign depending on the
outcomes of the SANAC meeting and the process of preparation for
it. Our next NEC will take place on May 18th 2003.
It was noted that it was agreed with the Deputy President that:
- On the agenda of the SANAC meeting will be (not necessarily in
this order):
- An ARV treatment programme for the SA public sector and the
report of the Costing Committee;
- The Nedlac Framework Agreement:
how it was arrived at and how it will be finalised;
- TAC's relationship with government and SANAC: questions SANAC may have
about TAC's structure, finances, decision on civil disobedience
etc.
- To prepare for this meeting a joint committee of SANAC and TAC
will be set up to work on the agenda as well as necessary
supporting documentation. TAC proposes that any disputes in this
committee be referred to the SANAC chairperson with clear
recommendations.
TAC proposes that where relevant, the outcomes of the May 17th
meeting be immediately and formally tabled with government as
urgent recommendations from SANAC with a request that they be
considered and confirmed within three weeks of the SANAC meeting.
The outcomes must include using the legal powers of government to
reduce the prices of medicines.
The TAC NEC reiterates its desire to work constructively with
government and all other sectors of society in HIV prevention and
treatment. However, should we encounter further unjustifiable
delays or deceit, we will continue with all existing campaigns to
get agreement on a national plan that saves lives by preventing HIV
infection and treating people with AIDS.
Proposed by Mark Heywood, TAC National Secretary Seconded by Zackie
Achmat, TAC Chairperson Agreed unanimously by TAC NEC members and
staff present on teleconference: Theo Steele, Luyanda Ngonyama,
Arthur Jokweni, Ivy Ntlangeni, Cati Vawda, Sindiswa Godwana,
Ncumisa Nongo, Sharon Ekambaram, Nathan Geffen, Mandla Majola,
Sipho Mthathi, Nonkosi Khumalo, Pholokgolo Ramothwala, Desmond
Mpofu, Thembeka Majali, Rukia Cornelius
National Association of People Living with HIV/AIDS
P. O. Box 66 Germiston 1400
Tel : +27(011) 872 0975 Fax : +27(011) 872 1343
napnat@sn.apc.org
http://www.napwa.org.za
Organise, Mobilise and Empower P.W.A. S
29 April 2003
Media alert
15 NAPWA members arrested
15 members of the National Association of People Living with
HIV/AIDS (NAPWA) who have been protesting peacefully today outside
the offices of Pharmaceutical Manufacturing Association (PMA) as
part of its unfolding programme to pressurize Pharmaceutical
Companies in providing Antiretroviral Drugs free of charge to
people Living with HIV/AIDS (PWA s) have been arrested in Midrand
Police Station.
For more information contact:
Sechaba Ranthako 072 291 3913
21 April 2003
NAPWA is continuing with her Black Easter Campaign
Up to date - We have 50 members who have joined and are part of the
campaign. These members are coming from 5 Provinces i.e North West,
Mpumalanga, Free State, Limpompo and Gauteng. NAPWA members have
vowed not to leave PMA premises until their demands are positively
addressed.
They are hoping to make their impact to be felt more on Tuesday, 22
April 2003, when NAPWA will forcefully enter the PMA premises. If
PMA does not respond positively to our demands NAPWA will intensify
her struggle and put pressure on the Pharmaceutical Companies by
involving our communities in consumer boycotts and forcefully
entering all the premises of Pharmaceutical Companies.
NAPWA is in these exercises and/or struggle because she believes
that Pharmaceutical Companies are the ones that need to provide
treatment to people who need it (treatment). NAPWA says
Pharmaceuticals have made enough profit and the moral thing they
can do is to Provide treatment free of charge to poor PWA's .The
notion that it is the duty of the government only to provide
treatment is misplaced and uncalled for, government has a
responsibility to provide nutrition to root out poverty while
building health care infrastructure.
We see Pharmaceutical Companies as the main institution that can
save our world from HIV/AIDS by donating and subsidizing treatment
for the benefit of the poor. Their obsession with profit making
make them to be regarded as murderers of the highest order in our
lifetime. NAPWA has vowed to stay in PMA offices at Midrand until
their demands are met. The struggle for treatment continues.
PWA rights are human rights. For more information please contact
Thanduxolo Doro NAPWA Deputy Director and Spokesperson +27 11 (0)83
489 3912
Or Nkululeko Nxesi NAPWA National Director +27 11 (0)83 478 9462
mailto:napwadir@sn.apc.org napwadir@sn.apc.org reposted from
Aids-Africa, a forum for communication and information on AIDS
related issues in Africa
<
http://www.yahoogroups.com/group/aids-africa>
The Real Politics of GSK's Price Cut
Brook K. Baker, Health GAP (http://www.healthgap.org)
April 28, 2003
[Note: The GlaxoSmithKline press release of April 28 is
available at
http://www.gsk.com/media/pressreleases.htm
Brief excerpts from the release:
"GlaxoSmithKline(GSK) today announced that it has further reduced
the not-for-profit prices of its HIV/AIDS medicines for the world's
poorest countries by up to 47%. The latest reduction lowers the
not-for-profit price of Combivir - the backbone of WHO-recommended
HIV/AIDS treatment regimens - to 90 cents per day. ...
GSK's single, not-for-profit prices are available to a wide range
of customers in the Least Developed Countries and all of
sub-Saharan Africa - a total of 63 countries. Eligible customer
groups include governments, Non-governmental organisations (NGOs),
aid agencies, UN agencies and international purchase funds like the
Global Fund to Fight AIDS, TB and Malaria. In recognition of the
gravity of the HIV/AIDS situation in sub-Saharan Africa, employers
who offer HIV/AIDS care and treatment to uninsured staff are also
eligible for GSK's not-for-profit prices for antiretrovirals. ...
GSK is the leading supplier of HIV/AIDS medicines, providing almost
twice as many antiretrovirals as the second largest supplier.]
Nobody should scoff at the importance of lower HIV/AIDS drug costs,
least of all those who have fought so hard, for so long, for them
to happen. Nonetheless, treatment activists always have a healthy
dose of skepticism when price reductions are trumpeted to the
worldwide press. They usually signal either a grudging capitulation
to an activist campaign, a strategic response to generic
competition, or a preemptive response to a legal threat. All three
factors seem to be playing a role in GlaxoSmithKline's most recent
announcement.
Glaxo is the main producer of HIV/AIDS antiretroviral drugs and
thus has been a principle target of activist campaigns for many
years. Because it faces so little real competition, Glaxo has been
among the slowest in reducing its prices for AIDS medicines in
developing countries. This has resulted in ACT UP and other
activist demonstrations at corporate headquarters, in letter
writing campaigns, in shareholder resolutions, and a ton of bad
press. Thus, it comes as no surprise that Glaxo would continue to
make price concessions in an effort to relieve some of the activist
pressure.
Glaxo is also facing serious competitive threat from generic
producers who have continued to undercut its previous price
discounts, who have received prequalification from WHO with respect
to the quality of their products, and who have begun to respond to
the subsidized purchasing power represented by the Global Fund, the
World Bank, and other donor sources. As a result, for the first
time, generic producers are beginning to see some larger purchase
orders and can begin to see the emergence of a sustainable and
robust market for a large-volume of AIDS medicines. At present,
India's Ranbaxy is the cheapest prequalified generic supplier at
$270 per year, but Hetero of India sources at $201 per year and
prices will continue to go down as efficiencies and economies of
scale increase. Doctors Without Borders has predicted prices well
below $100 per year once full-scale production begins.
These competitive features are important because the Global Fund
has already committed to lowest cost sourcing consistent with
national and international patent schemes. Thus, where no patents
are on file (in many of the smallest and poorest African countries)
and/or where compulsory licenses have been issued for imported
medicines, countries must preferentially source the cheaper generic
medicines in order to be eligible for Global Fund money to purchase
ARVs and drugs for opportunistic infections. In this regard, Glaxo
can be seen as having tried to match the generic pricing levels set
by Cipla, Ranbaxy, Aurobino, and Hetero in order to remain in the
running for purchases subsidized by the Global Fund.
However, Glaxo also engages in price competition in order to deter
scale-up of generic capacity. By matching generic price reductions,
Glaxo forces generic producers will think twice about expanding
their capacity. After all, Glaxo is signalling its willingness to
dump medicines at bargain basement prices in order to preempt the
emergence of a truly competitive generic industry. Moreover, Glaxo
and other drugs companies are trying to tie up the most lucrative
developing country markets by negotiating directly with some of the
biggest purchasers, like the U.S. government for Bush's unilateral
AIDS initiative (do we think George Bush's $300 came out of thin
air), like the South Africa and Botswana's governments, and like
Anglo American.
Finally, Glaxo has faced some unprecedented legal threats. Like
other drug companies, it has faced damaging patent challenges while
the industry as a whole has been rocked by price fixing charges,
deceptive patent-listing charges and the like. In addition, Glaxo
has had its pricing for AIDS medicines directly challenged in a
case brought by the AIDS Healthcare Foundation. Most importantly,
however, Glaxo has had its "discount" pricing scheme challenged in
South Africa in a case brought by the Treatment Action Campaign
before the Competition Commission. The Competition Commission is
empowered to investigate TAC's claim of excessive pricing by
checking the company books and seeking detailed information about
costs of production. Moreover, the Commission might well be
authorized to issue a compulsory license or impose punitive damages
totalling 10% of Glaxo's entire annual turnover of drug sales in
South Africa. An interesting side feature of a compulsory license
issued directly by the Competition Commission or subsequently by
the Patent Department would be that it would not be subject to the
"primarily for domestic use" rule found in TRIPS. In other words,
South Africa could issue an "anti-competition" compulsory license
authorizing exports to all of sub-Saharan Africa. There is strong
reason to believe that Glaxo might be seeking to avoid an abuse of
patent or excessive pricing finding by making its most recent price
concession.
Whatever the true calculation of factors influencing Glaxo's
decision, economies of scale are likely to be trivial. Glaxo has
bragged that it has increased its sale of Combivar from 2.2 million
pills in 2001 to nearly 6 million in 2002. I guess its better to
count pills than patients, because when you divide these numbers by
730 (2 pills a day times 365 days in a year), you see that Glaxo is
now treating providing preferentially priced Combivar to only 8219
patients in developing countries. Given that nearly 500,000
patients in the U.S. and Europe are receiving ARVs, many of them
Combivar, it's hard to see how there are new found economies of
scale in Glaxo plants. (In this regard, Glaxo's sales of ARVs in
all developing countries is only .2% of its annual gross sales and
probably less 2% of its total AIDS drug sales.) What may be true
however, is that the costs of base ingredients are falling as a
growing number of patients in developing countries are finally
accessing both patented and generic products.
An interesting feature of Glaxo's new found economies of scale and
manufacturing efficiencies is that it is presumably now making even
more money on its sales in the U.S. and E.U. Since it sells
Combivar at $9.00 a pill in those two markets, presumably it could
now knock a dollar off the price without affecting its exorbitant
profit!
A last factor to note about Glaxo's price offer is that it is still
significantly restricted, at least with respect to the private
sector purchases and with respect to the number of developing
countries included. Thankfully, Glaxo does commit to discount
pricing for 63 countries (all of sub-Saharan Africa and
approximately 10 other least developed countries) but this list
leaves out a lot of developing countries with a high disease
burden. Likewise, although the offer includes governments, NGOs,
aid agencies, UN agencies, and the Global Fund, it does not include
the entire private sector. Instead, the private sector offer is
limited to employers who offer HIV/AIDS treatment to "uninsured
staff." Although this distinction is not a huge issue in many of
the poorest countries, there is an elite in developing countries,
including a significant private sector in South Africa that does
provide ARV coverage through medical aid schemes. For the tiered
pricing to be most effective, it does not make sense to disrupt
participation in the private health sector by maintaining huge
price disparities between private and public sector drugs.
In the long run, the best way to evaluate the Glaxo pricing
discount is to assess its impact on finding a sustainable solution
to an ongoing and accelerating problem. Based on this kind of
evaluation, Glaxo's offer will be counterproductive in the long run
if it prevents the development of a robust generic industry that
achieves cost-efficient economies of scale and that has some
internal competition to drive prices down. In the short run, the
discounted drugs are registered, they utilize an existing
distribution system, and they are now significantly cheaper.
However, the most viable long term solution is one that energizes
highly efficient production in India and elsewhere, not one that
maintain the super-monopoly status of the patent industry.
+++++++++++++++++++++Document Profile+++++++++++++++++++++
Date distributed (ymd): 030430
Region: Continent-Wide
Issue Areas: +economy/development+ +health+
The Africa Action E-Journal is a free information service
provided by Africa Action, including both original
commentary and reposted documents. Africa Action provides this
information and analysis in order to promote U.S. and
international policies toward Africa that advance economic,
political and social justice and the full spectrum of
human rights.
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