GlaxoSmithKline, the biggest manufacturer of Aids drugs in the world, has halved the price of its leading Aids drug in poor countries.
The move comes after intense pressure on the pharmaceutical industry from health activists, investors and charities around the world.
British-based GSK, which has previously said it did not sell Aids drugs at a profit in the developing world, said it is now able to reduce prices thanks to more efficient manufacturing and economies of scale.
Despite the steep price cuts for poor countries in recent years, the cost of combination drug therapy is still too high for the majority of people outside the developed world.
The price offer is open to 63 developing countries, including all of sub-Saharan African.
GSK's leading Combivir treatment will be nearly halved in price to 90 cents a day, while the price for the component drugs will also come down.
Combivir costs $18 a day in the US.
"We congratulate GSK on their humanitarian action today to significantly lower the preferential prices of their Aids drugs for the world's poorest nations," said Michael Weinstein, president of the Aids Healthcare Foundation (AHF).
"In light of Glaxo's intention to reduce prices, AHF will withdraw our California lawsuit against GSK, and continue our work to see that these drugs can be made both available and affordable throughout the world."
Earlier this month, institutional investors added to the pressure on drugs firms when the largest pension fund in the US called on GSK to make access to Aids drugs easier by cutting prices and easing patent controls.
But the California Public Employees Retirement System (Calpers), which holds nearly $760m in GSK stock, stopped short of threatening to sell out.
Clare Short, Secretary of State for International Development, said: "I very much welcome this announcement from GSK.
"I look forward to other companies making similar efforts to bring down the prices of much needed drugs.
"We must complement this by a combined effort to build basic health systems in developing countries.
"We need to be clear, no matter how cheap the drugs,
most poor people will not receive them because there is no health system that reaches them."