Glaxo offers cheaper Aids drugs

Many Aids sufferers can't afford Glaxo's drugs

The world's biggest pharmaceuticals company, GlaxoSmithKline, has promised to supply charities with discounted drugs to help tackle the high price of Aids treatments.

The offer came as the company, recently created from the merger of Glaxo Wellcome and SmithKline Beecham, reported a 13% rise in its pre-tax profits for last year, to £5.327bn ($7.689m).

The pharmaceutical industry should drop their prices before we get to a level of political crisis

Dr Sam Ongeri, Kenyan Minister for Public Health

It said strong world-wide demand for drugs to treat Aids, asthma and depression had contributed to the increase.

The charity Oxfam welcomed the move, but said it did not address the central problem, which was the systematic use of patent rules to keep low-cost drugs out of poor countries.

GlaxoSmithKline has been at the centre of criticism that its profits come, in part, from overcharging for anti-Aids drugs in developing countries.

Overcharging

The criticism has been spearheaded by charities such as Oxfam and Medecins Sans Frontieres.

They say Glaxo - and other drugs companies - have been grossly overcharging for Aids treatments while, at the same time, preventing poor countries making cheaper copies of their patented medicines.

Drugs companies urged to lower prices

Among the examples quoted was a treatment available in India costing less than $500. Oxfam said Glaxo sold the same cure in other countries for $10,000.

In Kenya, a coalition of aid organisations has declared its intention to go ahead and order such drugs from manufacturers which copy patented drugs.

Samantha Bolton, a Nairobi-based spokeswoman for Medecins Sans Frontieres, told the BBC there was no other way out as the cost of $600 a year was unaffordable in a country where the average annual income was only $270.

The Kenyan Minister for Public Health, Dr Sam Ongeri, said his government would introduce a bill in parliament next month to allow compulsory licensing, which would enable aid agencies to import generic drugs.

Mr Ongeri said he expected drugs companies to protest, but warned them to act before the situation deteriorated into a political crisis.

Glaxo's promise

In a move to head off the criticism, GlaxoSmithKLine's chief executive Jean-Pierre Garnier said his company would offer heavy discounts on Aids drugs.

They would be made available to non-profit organisations working in developing countries.

What we want is for the international community to encourage governments to take advantage of generic cheaper medicines

Samantha Bolton, Medecins Sans Frontieres

The offer - of a 90% reduction - is similar to a package offered by the Bombay-based Cipla Ltd, which announced early in February that it would be supplying the triple-cocktail treatment to Medecins Sans Frontieres.

Drug companies have, in the past, threatened to sue Cipla for exporting patented drugs.

Under WTO rules, governments are allowed to issue compulsory licenses that allow generic drugs to be manufactured, or allow "parallel importation" of cheaper drugs.

But drug companies are challenging this in a lawsuit against the South African government. They allege that it violated international law by allowing the import and manufacture of generic equivalents of patented drugs.

However, in parallel to that, and in an effort to stave off criticism, the companies have recently been negotiating deals with individual governments to lower prices.