Indian anti-retroviral drug manufacturers who are part of Clinton Foundation HIV/AIDS Initiative will be highly benefited due to a landmark agreement signed by South African AIDS activists and two of the patent holders of ARV drugs on December 10, 2003. As per the agreement, GlaxoSmithKline and Boehringer Ingelheim will grant voluntary licenses to generic companies to manufacture ARVs and market it in 47 sub-Saharan countries.

GSK will issue licenses to four generic companies (including Aspen Pharmacare and Thembalami Pharmaceuticals) to produce and/or import, sell and distribute the antiretroviral medicines AZT and lamivudine. BI will grant licenses to three generic companies (including Aspen Pharmacare) to produce and/or import, sell and distribute the antiretroviral medicine, nevirapine. Previously, the patent holders had voluntary license agreement only with Aspen Pharmacare.

The effect of the agreements with GSK and BI is that the Clinton Foundation deal that was announced on 23 October 2003 can be implemented in South Africa and other 47 sub-Saharan African countries immediately.

The Clinton Foundation deal has ensured that four generic companies will sell triple-drug antiretroviral therapy to governments in sub-Saharan Africa at US $140 per patient per year. Ranbaxy Laboratories Ltd, Cipla Ltd, Matrix Laboratories Ltd, and Hetero Laboratories are the Indian ARV manufacturers who are part of the Clinton initiative. Aspen Pharmacare Holdings Ltd of Johannesburg, South Africa is the fifth company.

While the first three have agreed to supply bulk ARVs at the agreed rates, Hetero is willing to supply both bulk and formulations at a reduced rate. The prospects of the agreement should be more promising to Ranbaxy as the company received WHO pre-qualification for its three-drug fixed dose Anti-retroviral (ARV) combination products in the first week of December.

The settlement agreements will open up the ARV market to generic competitors. Including Aspen Pharmacare, four generic companies will be licensed to manufacture and/or import generic AZT and lamivudine products, with three companies being licensed to manufacture and/or import generic nevirapine products. All licensees will be entitled to combine AZT, 3TC and nevirapine, both with each other and with other

ARVs. All licensees will be entitled to sell their products to both the public and private sectors, with sales being subject to a maximum 5 per cent royalty rate. The licensees will be able to manufacture AZT, lamivudine and/or nevirapine in combination with each other and/or any other medicines for which the licensees have licences thereby allowing the entry of triple-drug fixed dose combinations, currently manufactured by at least two generic producers.

Licensees that manufacture the ARVs in South Africa will be entitled to export their products to all countries in sub-Saharan Africa. The AIDS activists involved in the agreement are the Treatment Action Campaign (TAC), COSATU, CEPPWAWU, and the AIDS Consortium. TAC has called on pharmaceutical companies such as Merck, Roche and Abbott to follow the examples of GSK, BI and Bristol Myers Squibb by agreeing either not to enforce their patents on antiretroviral medicines in sub-Saharan Africa or by granting voluntary licenses to generic manufacturers on reasonable terms.