Competition Commission Finds GSK and BI in Contravention of the Competition
Act
16 October 2003
The Treatment Action Campaign welcomes the
statement below by the Competition Commission. Just over a year ago, Hazel Tau
and 10 others lodged a complaint at the Competition Commission against
GlaxoSmithKline and Boehringer Ingelheim for excessive pricing of their
antiretroviral medicines. The Competition Commission has now decided to refer
this matter to the Competition Tribunal for ajudication.
The 11
complainants are: COSATU, the TAC, CEPPWAWU, Hazel Tau, Nontsikelelo Zwedala,
Sindiswa Godwana, Sue Roberts, Isaac Skosana, William Mmbara, Steve Andrews and
Francois Venter. Two additional parties joined the complaint in February 2003,
the AIDS Consortium and a TAC volunteer who subsequently died of AIDS in June .
For questions on the Competition Commission case, please contact
Jonathan Berger on 011 717 8600 or 083 419 5779, or Fatima Hassan on 083 279
9962.
We reprint the Competition Commission Statement below.
Fact
Sheet on the Competition Commission case last updated in October 2002.
Price
of Life: a booklet by the AIDS Law Project on the Competition Commission
case.
MEDIA RELEASE FROM THE COMPETITION COMMISSION
16 October
2003
Competition Commission finds pharmaceutical firms in contravention of the
Competition Act
The Competition Commission has found that pharmaceutical
firms GlaxoSmithKline South Africa (Pty) Ltd (GSK) and Boehringer Ingelheim (BI)
have contravened the Competition Act of 1998. The firms have been found to have
abused their dominant positions in their respective anti-retroviral (ARV)
markets.
In particular the Commission has found the firms have engaged in
the following restrictive practices:
1.
Denied a competitor access to an essential
facility
2. Excessive
pricing
3. Engaged in an exclusionary
act
The Commission has decided to refer the matter to the Competition
Tribunal for determination.
Menzi Simelane, Commissioner at the
Competition Commission, says," Our investigation revealed that each of the firms
has refused to license their patents to generic manufacturers in return for a
reasonable royalty. We believe that this is feasible and that consumers will
benefit from cheaper generic versions of the drugs concerned. We further believe
that granting licenses would provide for competition between firms and their
generic competitors."
"We will request the Tribunal to make an order
authorising any person to exploit the patents to market generic versions of the
respondents patented medicines or fixed dose combinations that require these
patents, in return for the payment of a reasonable royalty. In addition, we will
recommend a penalty of 10% of the annual turnover of the respondents' ARVs in
South Africa for each year that they are found to have violated the
Act."
Simelane said these practices violate the Competition Act of 1998's
prohibitions against excessive pricing (section 8(a)), refusing access to
essential facilities (section 8(b)) and exclusionary acts that have an
anticompetitive effect that outweighs technological, efficiency or other
pro-competitive gains (section 8(c).
"Indeed the very goals of our
Competition Act - promoting development, providing consumers with competitive
prices and product choices, advancing social and economic welfare and correcting
structural imbalances - have been made difficult in this context by the refusal
of the respondents to license patents."
The original complaint in this
matter was filed by Hazel Tau and others alleging that GSK and BI were charging
excessive prices to the detriment of consumers for their patented ARV medicines.
GSK and BI hold patents on certain antiretroviral (ARV) medications used
to treat HIV/AIDS. GSK holds patents in South Africa on AZT (branded as
Retrovir), Lamivudine (branded as 3TC) and AZT/Lamivudine (branded as
Combivir). BI holds patents in South Africa on Nevirapine (NVP) (branded
as Viramune).
ENDS
Prepared by: Beachhead Media
& Investor
Relations
Dani Cohen 021 469 9000 / 082 897
0443
Jennifer Cohen 011 214 2400 /082 468 646
On behalf of: The
Competition Commission
Further info: Zolile
Ntukwana
Manager, Compliance Division at the Competition
Commission
082 774 6017
[ENDS]