<http://www.guardian.co.uk/international/story/0,3604,450358,00.html> Embarrassed firms slash Aids drug prices
Special report: Aids
Sarah Boseley, health editor Monday March 12, 2001 The Guardian
Aids patients in Ivory Coast will be the first to benefit from a price-cutting war that appears to have broken out among drug manufacturers, embarrassed by the outcry in recent weeks over the preventable deaths of millions and afraid of losing the potentially huge African market to copycat generics manufacturers. Merck, one of the world's leading pharmaceutical companies, has dramatically dropped the price of two antiretroviral drugs in the last few days. Crixivan (indinavir sulfate), which costs around $6,000 (about £4,100) a year in the US, is on offer to sub-Saharan Africa at $600 a year, and Stocrin (efavirenz) at $500. Merck says it will make no profit on the sale. Ivory Coast's minister for Aids, Assana Sangare, said yesterday her country would buy discounted drugs from Merck, Bristol Myers Squibb and GlaxoSmithKline, bringing the cost of the sort of three-drug combination used to combat HIV/Aids in the west down to around $1,200 a year.
The three drug companies, and two others, have in the past offered discounts of 85% but have not named figures. There has been only a limited response. Most of Africa said the prices were still unaffordable. Merck's more generous offer is being seen as a response to the low prices being offered by generics companies, which copy patented drugs. Cipla, the Indian generics company, has said it is willing to supply developing world governments with a cocktail of three Aids drugs for $600 and to drop the price to $350 for the volunteer doctors of Médecins sans Frontières. The same combination would cost over $10,000 a year in the west.
The prices are still too high to allow more than a small number of people to be treated in desperately poor countries. But the real significance of the Merck move is that it signals a downward spiral in drug prices, which looks set to open up the possibility of treatment for millions for whom HIV is now a death sentence.
Merck's offer comes within days of the opening and adjournment of a court case brought by 39 international pharmaceutical companies - Merck among them - against the South African government contesting legislation that would allow the import of drugs that are cheaper elsewhere.
International outrage over the spectacle of hugely wealthy drug companies trying to stop South Africa's access to cheap medicines has made the case acutely embarrassing for the companies. While they say they must fight on because the legislation in effect sweeps away all their patent rights in South Africa, they are under pressure to improve their public image. GlaxoSmithKline, for instance, has recently announced two malaria initiatives for Africa.
Whether or not Merck is trying to draw the sting of the court case, it is certainly motivated by the threat of Cipla walking into the African mar ket. Cipla has asked the South African government to grant it eight compulsory licences for Aids drugs - permission to make a cheap version in South Africa of a patented drug, which is allowable under international trade agreements in cases of dire human need.
Merck and the others are signalling that they will do all they can to fight the generics companies off, if not through law then by undercutting their prices.
"I certainly feel that compulsory licences are unneces sary in this case," said Jeffrey Sturchio, Merck's executive director for public affairs in Africa. "We are making these drugs available. We're willing to work with the government in South Africa."
Those campaigning to get Aids drugs to millions across sub-Saharan Africa are delighted at the price war. "We think prices can fall further, down to as low as $200 a year for a triple combination," said Nathan Ford of MSF. "For many countries drugs are still, and will be still, too expensive."