Four companies that produce generic Aids drugs have agreed to reduce the cost of the drugs for millions of people in developing countries under a deal brokered by former US President Bill Clinton.
Clinton said the deal would bring hope to millions of people
The companies in India and South Africa say they will provide the medication to several nations in Africa and the Caribbean at less than a third of the cost of patented versions.
Aids organisations have hailed the deal as a breakthrough, with the potential to save millions of lives.
Mr Clinton said treatment could begin in places where until now there had been virtually no medicine and no hope.
Nine countries in the Caribbean, as well as Mozambique, Rwanda, South Africa and Tanzania will receive the low-cost medication.
The agreement was reached after advisors from the William J Clinton Presidential Foundation worked with the drugs firms to find ways to cut costs.
Under the deal, the price of a generic triple-drug regimen will be less than 40 cents a day, as opposed to more than $1.50 for the same patented medicines.
"This agreement will allow the delivery of life-saving medicines to people who desperately need them," Mr Clinton said.
He said he hoped up to two million people would receive the cut-price drugs by 2008.
Mr Clinton has secured partial funding from wealthier nations to help the countries pay for the drugs and for improvements in the countries' health systems.
Ireland, for example, has committed $58.3m over five years to Mozambique. Canada has also agreed to be a commit funds.
The four African nations have each secured additional funds from other sources, including the World Bank and the Global Fund to Fight AIDS, Tuberculosis and Malaria.
Analysts say the companies are able to provide the drugs at cheaper prices by cutting marketing and distribution costs because the treatments are so well known there is no need for them to be advertised.
Profits from drugs used for other ailments not related to Aids can also used to offset the cost of providing cheaper Aids treatments. In addition, already existing drugs do not have the burden of large research and development expenses.
The high cost of anti-retroviral drugs is a big issue in poor countries, with campaigners often arguing that drug companies' profit margins are too large.
In southern Africa, only 50,000 out of four million Aids sufferers are receiving required treatment.
Aids campaigners have welcomed Mr Clinton's initiative as an important step forward.
"Providing Aids treatment to those who most urgently need it in poor countries is the most urgent health challenge the world faces," said Dr Lee Jong-Wook, director of the World Health Organization.
Irish rock star Bono, a leading Aids activist, said the deal "marks a crucial breakthrough in the Aids emergency, showing that we can, and must, wage a successful war against this preventable and treatable disease".