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Indian Firm Offers AIDS Cocktail for $1 a Day
Published on Wednesday, February 7, 2001 by Reuters
Indian Firm Offers AIDS Cocktail for $1 a Day
Undercuts Multinational Companies
by Sitaraman Shankar and Ben Hirschler
BOMBAY/LONDON - Indian generic drugmaker Cipla Ltd. said Wednesday it would supply a triple-cocktail of AIDS drugs to the world's poor at less than $1 a day, significantly undercutting multinational companies.

The Indian group, which makes cheap copies of drugs that are patent-protected in other countries, is offering the medicines to international charity Medecins Sans Frontieres (MSF) for $350 per year per patient and to governments for $600.

``We are offering the drugs at a humanitarian price. Our normal price -- at which we sell to wholesalers in India -- is $1,200 per patient per year,'' Cipla Chairman Yusuf Hamied told Reuters.

MSF said the offer showed its target of $200 per year was almost within reach and called on Western pharmaceutical companies to match the Cipla price.

The offer is aimed primarily at Africa, where antiretroviral drugs commonly used in the West are out of reach of virtually all the 25.3 million people infected with the HIV virus . The same drug cocktail would cost $10,400 per year in the United States.

Leading drug companies have recently negotiated discount deals of 60-90 percent with Senegal, Uganda and Rwanda under a United Nations initiative -- but that still leaves their products at a premium to Cipla's offer.

MSF said Senegal was currently paying $1,008 to $1,821 per year for combination therapy.

Cipla, India's third largest drug company by sales, is offering the three drugs stavudine, lamivudine and nevirapine. U.S. firm Bristol-Myers Squibb holds the patent on stavudine, or Zerit, in much of the world; Britain's GlaxoSmithKline has patents on lamivudine, or Epivir; and Boeringher Ingelheim of Germany owns the patent on nevirapine, or Viramune.

Indian drug firms are allowed by local laws to make drugs that are under patent elsewhere in the world, providing they use a process that differs from the original patented process.

Hamied said the special prices only applied to MSF and to governments backed by MSF. However, the charity said this requirement was not practical or necessary and asked Cipla to make its offer directly to governments and U.S. agencies.

Pressure On Drug Majors

Cipla's move puts further pressure on multinational firms -- who have patchy patent protection in the developed world -- to cut their prices further. However, industry analysts predicted the majors would not be rushing into a price war.

``There is an economic price under which they are not going to go and it looks as though the price Cipla is offering is substantially lower than anything the majors could do it for,'' said Martin Hall of stockbroker HSBC Securities in London.

Phil Thomson, spokesman for GlaxoSmithKline, said the pharmaceutical giant welcomed initiatives that improved drug access but was skeptical about the Cipla deal.

``It would appear that the offer is a partial donation and the price is below cost, so we would question the sustainability of supply,'' he said.

AIDS activists have been fighting a campaign for the past two years to force drug companies to cut prices and accuse the industry of dragging its feet -- a view shared by some governments.

South Africa, which has the largest number of HIV infections, is on a collision course with drug firms.

A group of more than 40 firms are taking Pretoria to court, arguing that its plan to promote the importation or local manufacture of generic AIDS drugs infringes their intellectual property rights. The case is due to be heard in March.

Brazil, too, has clashed with the companies in a case which has sucked in the U.S. government and World Trade Organization.

The Latin American country, which already makes generic versions of several AIDS drugs, said last week it would start producing a further two by June if prices on imported patented medicines do not drop.

Copyright © 2001 Reuters Limited


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