TAC Electronic Newsletter

14 December 2004


TAC awarded punitive costs in case against Minister of Health

GSK grants license to Cipla in accordance with Competition Commission settlement

TAC awarded punitive costs in case against Minister of Health

The Minister of Health has been ordered by the Pretoria High Court to pay punitive costs in a case brought earlier this year by the TAC. She must pay the TAC's costs on the scale as between attorney and client, as well as the cost of one counsel. This is an unprecedented judgement. It is a signal to the Minister to treat civil society with the seriousness that it deserves. The judgment is important because punitive costs are seldom granted; such awards indicate that the court is displeased by the conduct of a party – here the Minister. The Minister has therefore wasted money in defending an indefensible case. She must account for her conduct.

The case highlighted the Ministers delinquency in failing to inform the public about the true state of affairs of a document called ‘Annexure A’ which is referred to in the Operational Plan as the implementation timetable published on 19 November 2003.

According to sworn testimony by the acting Director-General of Health provided only in September 2004, Annexure A is not the finalised or approved timetable and is a draft document. The TAC accepted this testimony in good faith and therefore asked the Minister to pay for the costs of bringing the case because it was occasioned by her refusal to communicate with us. This is why we went to court in November.

We welcome the judgment because it demonstrates that the Minister as well as other organs of state have a duty to act in an open and transparent manner in compliance with the access to information rights in the Bill of Rights. The Minister cannot act in a manner that is inconsistent with the Constitution and simply ignore genuine requests for access to lifesaving information. This is why we welcome the punitive cost order against the Minister.

The judgment vindicates the TAC’s application to court. According to the judgment, the Minister had eleven opportunities to inform the TAC of the true state of affairs but failed to do so. For the TAC, it is not the money that is of primary concern here, but the delay in saving lives. We will continue to repeat our call for the final and approved implementation timetable to be made available publicly. Should the Minister fail to make it available, we will begin new litigation to compel her to do so.


GlaxoSmithKline grants license to Cipla in accordance with Competition Commission settlement

The Treatment Action Campaign (TAC) welcomes today’s announcement that GlaxoSmithKline (GSK) has granted a licence to Cipla-Medpro for the importation and sale of generic versions of antiretroviral (ARV) medicines containing zidovudine (AZT) and/or lamivudine, two crucial drugs used both in the prevention and treatment of HIV infection. As Cipla-Medpro has already obtained approval from the Medicines Control Council (MCC) to sell AZT and lamivudine (adult and paediatric formulations) in South Africa, these ARV medicines are now available in private pharmacies and may be purchased by the state for use in public health facilities.

The TAC hopes that today’s announcement concludes a lengthy dispute that resulted in its formal complaint to the Competition Commission in September 2002. Our initial assessment is that GSK seems to have complied with its obligations as contemplated by the settlement agreement. Once we are satisfied that this is indeed the case, we will issue a public announcement to this effect.

In the complaint to the Competition Commission, COSATU, the Chemical, Energy, Paper, Printing, Wood and Allied Workers’ Union, ten others (including people living with HIV/AIDS and health care workers) and we argued that GSK and Boehringer Ingelheim (BI) had been unlawfully charging excessive prices for their ARV medicines, resulting directly in the premature, predictable and avoidable deaths of people with HIV/AIDS.

In exchange for legally binding guarantees to issue multiple licences on their patented ARV medicines on specified terms and conditions, the complainants agreed to withdraw their complaint. The settlements were entered into on the basis that only with sufficient competition could the prices of ARV medicines reach their lowest possible amount and remain affordable on a sustainable basis. In short, the settlements held the promise of sufficient competition essential for ensuring a sustainable supply of affordable ARV medicines.1

To date, GSK has also granted licences to Aspen Pharmacare, Thembalami Pharmaceuticals, Feza Pharmaceuticals and Biotech Laboratories for the importation and/or local production of the same essential drugs. Of these companies, only Aspen is currently supplying these medicines, which are manufactured locally. We trust that Thembalami, Feza and Biotech will take all steps necessary to bring their ARV medicines to market as soon as is reasonably possible, and that as and when Cipla-Medpro is in a position to manufacture its drugs locally that its licensing agreement with GSK will be amended accordingly.

The TAC has requested MSD, the distributer of efavirenz, an essential antiretroviral medicine, to grant voluntary licenses to generic manufacturers on similar terms to those reached with GSK or Boehringer Ingelheim. Should MSD fail to do so, we will consider litigation for compulsory licenses.