South Africa's competition regulatory body has ruled in favour of AIDS activists who want protection of patents on antiretroviral drugs to be drastically curtailed so that South African makers of generic drugs will be able to produce cheap copies of the drugs.
The Competition Commission ruled in favour of 10 complainants (including the trade union federation and several doctors and nurses) who sought to prove that GlaxoSmithKline and Boehringer Ingelheim abused their position of market dominance and their patents by charging too much for their drugs, depriving poor people of access to the drugs.
The activists, grouped under the banner of the Treatment Action Campaign, had also complained that a voluntary licence that the companies granted to a manufacturer of generic drugs was too restrictive.
The commission ruled that the companies had indeed abused their position and has indicated that all generic drug manufacturers wishing to make cheap copies of antiretroviral drugs ought to be able to do so without seeking the permission of the patent holder.
Just as the commission was making its findings known GlaxoSmithKline announced that it had dropped the prices of several of its antiretroviral drugs and had eased restrictions on the voluntary licence. The company protested that the commission had assured it that it would have time to negotiate a settlement with the litigants.
The ruling has been referred to the Competition Tribunal for what is effectively an appeal. It is likely to be vigorously contested, because the precedent set by the commission is likely to affect a wide range of drugs used to treat the types of diseases found in large numbers of poor people in the region. These diseases include malaria and tuberculosis. The lawyer working on behalf of the activists, Fatima Hassan, believes the commission has given a clear indication of its future direction when other such complaints reach it.
In reaching its decision the commission had taken into account international law on intellectual property and had used intellectual property consultants in its research.
South Africa has several generic drug manufacturers, although only two are able to make antiretrovirals. Other companies, however, would be able to import the drugs from India and other countries.