Exactly 20 years ago, Hazel Tau became the first of 11 complainants to bring a ground-breaking complaint to the Competition Commission, alleging that the price of drugs to treat HIV/ Aids in South Africa was excessive.
So excessive that South Africa’s price ranged from 540% to 1 543% more than the best-priced generic available in the world. In 2002, the cost for a month of antiretroviral drugs that people needed to keep themselves alive was about R4 500 (Heywood, 2002).
Remember that in 2002, South Africa had among the highest rates of HIV/Aids infections in the world. At the time, the Health Department reported that about one-in-nine South Africans (or five million people) were living with HIV/Aids in this country.
Moreover, these were the days before the government started supplying HIV/Aids drugs, so the drugs were not available at all in the public sector, although Aspen Pharma had been given rights to manufacture for the public sector.
The result was a grossly inequitable situation where those who needed the life-saving drugs the most were hopelessly unable to afford them.
Hazel Tau herself fell within this community but, due to her prominence as an HIV/Aids activist, was fortunate to have gained a corporate sponsor.
Nevertheless, Tau, the then Treatment Action Campaign and nine other complainants launched a battle against the two pharmaceutical giants that supplied the drugs – GlaxoSmithKline SA (Pty) Ltd (GSK) and Boehringer Ingelheim (Pty) Ltd (BI).
At the time of the subsequent Competition Commission investigation, GSK held patents in South Africa on AZT (branded as Retrovir), Lamivudine (branded as 3TC) and AZT/Lamivudine (branded as Combivir), whilst BI held patents in South Africa on Nevirapine (branded as Viramune).
The complainants brought their complaint to the commission seeking an outcome that would lead to the reduction of HIV/Aids drug prices, not just in South Africa, but through all of sub-Saharan Africa, given that this entire region was the most affected by HIV/Aids in the world.
Following its investigation, the commission concluded that GSK and BI had indeed contravened the Competition Act by (1) refusing to grant (generic) competitors access to an essential facility when it was economically feasible to do so; and by (2) charging excessive prices for the drugs supplied to the South African market.
It was a bold move designed to challenge the balance between patent protection, competition law and plain social responsibility. However, our approach was never fully tested in the courts, because the respondents offered to settle the matter by granting generic manufacturers the right to develop and supply generic HIV/Aids drugs to the market.
The pharmaceutical manufacturers essentially undertook to:
● Issue voluntary licences to other companies for both public and private sectors.
● Charge a royalty of 5%.
● Allow licensees to produce f ixed-dose combinations containing active ARVs.
● Allow for importation and/or production of the relevant ARVs.
● Allow SA licensees to export locally-manufactured, specific ARVs into sub-Saharan African countries.
And it worked! The settlements brought a major reduction in the price of HIV/Aids drugs. Heywood later reported that the cost of the first line of ARVs had fallen to less than R100/ month.
Fast forward to 2022, and concerning Covid-19 vaccines, once again the pharmaceutical industry demonstrated that those with the deepest pockets get first pickings.
In February this year, the Competition Commission referred a complaint against Roche Holding AG to the Competition Tribunal for prosecution.
In it, we alleged that from about 2011 to 2022, Roche charged excessive prices for Herceptin / Herclon, a breast-cancer drug, and we estimated that over 10 000 breast cancer patients (nearly 50% of the newly-infected patients in the private and public health-care sectors) were unable to receive treatment with Herceptin between 2011 and 2019 because of the excessive prices Roche charged for it.
We also drew the link between this matter and the Constitutional right to health care, which is enshrined in the Bill of Rights.
As an example, a 12-month course of Herceptin in the private sector cost about R355000 for 17 cycles of treatment for a period of one year. In the public sector, an equivalent treatment with Herclon costs approximately R160 000.
Our case against Roche is yet to be heard by the Competition Tribunal.
All three scenarios: the Hazel Tau case; the matter of Covid vaccines; and the Commission’s case against Roche, essentially pose one question: where should we draw the line between the rights conferred on pharmaceutical companies by patent law protection and the right of fair access to life-saving pharmaceutical drugs?
The Roche case is set to debate this very issue. The benefits and incentives of patent law protection are widely accepted. At the Competition Commission we believe there are instances where this right must be challenged and weighed up against patient rights to access medicines.
The Competition Act 89 of 1998, as amended, provides the legislative tools for us to do so.
The Tau case concluded with a settlement that achieved the outcome we would have wanted to see from a contested trial. The distribution of Covid vaccines became more equitable as time passed due, in part, to global social activism in this regard. However, neither case established a precedent or framework from which future matters questioning the balance between patent protection and free access can be assessed.
Whichever way the Roche matter unfolds, it will mark a significant moment in the shaping of our pharmaceutical regime – in much the same way the Hazel Tau case did, just 20 short years ago.
* Doris Tshepe is the Commissioner at the Competition Commission of South Africa.
** The views expressed here are not necessarily those of Independent Media.
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