21 January 2004

Essential Antiretroviral - Efavirenz - for Children is Out of Stock

Efavirenz is Patented by World's Largest Pharmaceutical Company, Merck (MSD in South Africa)

At Least One Patient has Defaulted Taking Efavirenz Following Shortage

Demonstration Outside MSD Offices on 2 February to Demand Voluntary Licenses

Pharmaceutical Company MSD has run out of stock of the paediatric version of its antiretroviral, efavirenz (Stocrin 50mg). In response the TreatmentAction Campaign (TAC) has sent the letter below to MSD.  Furthermore, theTAC will hold a picket outside MSD's South African offices on 2 February 2004demanding that the company gives non-exclusive voluntary licenses on a 5%royalty fee basis to any generic company that meets objective criteria forquality and manufacturing standards.

MSD is a subsidiary of the world's largest pharmaceutical company, Merck & Co, Inc.based in the United States.

Venue: 11716th Avenue, Midrand
Date: 2 February 2004
Time: 12pm
Contact:Pholokgolo Ramothwala: 011 339 8421 or 082 969 8691

Letter to MSD

Mr. Chirfi Guindo
Chief Executive Officer
MSD (Pty) Ltd
Private Bag 3
Halfway House 1685
South Africa

19 January2004

By RegisteredMail and Fax: 011 655 3187

Dear Mr.Guindo


It has come to the attention of the Treatment Action Campaign (TAC) that MSD (Pty) Ltd,holder of the exclusive right to market and distribute efavirenz in SouthAfrica, has run out of stock of the 50mg tablet that is used in the treatmentof HIV infection in children over the age of three years.  As far as canbe ascertained, very few pharmacies in the country are currently holding any stock of 50mg efavirenz.

We have been reliably informed that MSD is unable to guarantee supply of this particular formulation before 28 January 2004. In personal communication with us, MSD saidthat the supply would restart on Wednesday, 21 January. The logisticalnightmare created by the unavailability of stock has, to the best of ourknowledge, resulted in at least one patient defaulting on treatment for fourdays.  A serious consequence of stock shortages is that resistance to theparticular antiretroviral medicine can develop if patients default.

In the case of a non-nucleoside reverse transcriptase inhibitor such as efavirenz,resistance is not only limited to the particular drug in question but all otherdrugs in the same class, such as nevirapine.  This has the potential tolimit severely the future treatment options of children currently using anefavirenz-based regimen.  As you are aware, the treatment options ofchildren, relative to those of adults with HIV-infection, are already somewhatlimited. 

Thisunacceptable situation points to the need for multiple suppliers of essentialmedicines. With more providers there will be less likelihood of all companiesrunning out of stock.  Competition will also ensure that companies aremore careful about monitoring their stock.

In this regard, we draw to your attention that MSD's failure to meet market demand of alife-saving medicine constitutes patent abuse and is a well recognised groundunder South African patent law for the granting of compulsory licences so thatgeneric companies can begin developing, producing and distributing 50mgefavirenz.

In December 2003, GlaxoSmithKline and Boehringer Ingelheim entered into agreements with theTAC and others in terms of which they agreed to licence four and three genericpharmaceutical companies respectively to manufacture and/or import generic AZT,lamivudine and nevirapine products. We call on MSD to enter negotiations withthe TAC to consider entering a similar agreement which will allow multiple generic manufacturers to enter the market or to follow the example ofBristol-Myers Squibb and stop enforcing the patent on efavirenz in sub-SaharanAfrica.

We ask you torespond with a detailed explanation of why MSD ran out of stock and whatactions are being taken to find stock for current patients. In this regard, TACrequests a meeting with MSD as soon as is reasonably possible.

We trust thatyou will respond by no later than Monday, 26 January 2004.

Yours sincerely

Zackie Achmat