The Price of Life A Legal Challenge to the Cost of Antiretroviral Therapies in South Africa Jonathan Berger Law & Treatment Access Unit AIDS Law Project University of the Witwatersrand SOUTH AFRICA Friday, November 21st 2003 Faculty of Law University of Toronto 23 November 2018

Overview of presentation Complaint to the Competition Commission What is the complaint? Why challenge private sector prices? Who are the complainants and the respondents? What must be proved? Conceptualising the role of legal action Building a case, building a coalition Completing unfinished business Engaging the Commission, increasing legal options

Contextualising the complaint: using the law to increase access

Contextualising the complaint: old habits die hard

Contextualising the complaint: government comes to the table

Overview of presentation Complaint to the Competition Commission What is the complaint? Why challenge private sector prices? Who are the complainants and the respondents? What must be proved? Conceptualising the role of legal action Building a case, building a coalition Completing unfinished business Engaging the Commission, increasing legal options

What is the complaint? GlaxoSmithKline and Boehringer Ingelheim have “engaged in excessive pricing of ARVs to the detriment of consumers”, which is “directly responsible for the premature, predictable and avoidable deaths of people living with HIV/AIDS, including both children and adults” In contravention of section 8(a) of the Competition Act, 89 of 1998

Why challenge private sector prices? Product Price sold to private sector: patented product International best price offer: patented product World Health Organisation (WHO) pre-qualified generic Difference in price between brand and WHO generic AZT (300mg) ZAR 7 082,46 (US$ 885,31) (ZAR 2 192,00) US$ 274,00 (ZAR 1 440,00) US$ 180,00 + 392% 3TC (150mg) ZAR 7 786,67 (US$ 973,33) (ZAR 1 024,00) US$ 128,00 (ZAR 800,00) US$ 100,00 + 873% AZT/3TC (300mg/150mg) ZAR 9 733,33 (US$ 1216,67) (ZAR 2 632,00) US$ 329,00 (ZAR 2 120,00) US$ 265,00 + 359% Nevirapine (200mg) ZAR 4 380,00 (US$ 547,50) (ZAR 3 504,00) US$ 438,00 (ZAR 1 328,00) US$ 166,00 + 230% Annual cost per patient per drug (exclusive of VAT and markup) (Based on exchange rate of US$1 = ZAR 8, with prices as of 19 September 2002)

Overview of presentation Complaint to the Competition Commission What is the complaint? Why challenge private sector prices? Who are the complainants and the respondents? What must be proved? Conceptualising the role of legal action Building a case, building a coalition Completing unfinished business Engaging the Commission, increasing legal options

Complainants and respondents People living openly with HIV/AIDS Hazel Tau, Nontsikelelo Zwedala, Sindiswa Godwana, Isaac Skosana and Paul Ngubane (deceased) Health care workers Sr Sue Roberts, Dr William Mmbara, Dr Steve Andrews and Dr Francois Venter Organised labour and civil society COSATU, CEPPWAWU, TAC and the AIDS Consortium Respondents GlaxoSmithKline (UK) and associated companies Boehringer Ingelheim (Germany) and associated companies

Overview of presentation Complaint to the Competition Commission What is the complaint? Why challenge private sector prices? Who are the complainants and the respondents? What must be proved? Conceptualising the role of legal action Building a case, building a coalition Completing unfinished business Engaging the Commission, increasing legal options

What must be proved? Charging “a price for a good or service which – (aa) bears no reasonable relation to the economic value of that good or service; and (bb) is higher than the value … in (aa)” What makes up the economic value? Manufacturing costs R&D costs (where applicable) Licensing costs (where applicable) Reasonable profits

Adult formulations: one cap or tab Product Price sold to private sector: patented product World Health Organisation (WHO) pre-qualified generic Estimated economic value Ratio: private sector to economic value AZT (300mg) ZAR 9,70 (US$ 0,92) (ZAR 2,59) US$ 0,25 ZAR 3,76 (US$ 0,36) 2.58 3TC (150mg) ZAR 10,67 (US$ 1,02) (ZAR 1,46) US$ 0,14 ZAR 2,66 (US$ 0,25) 4.01 AZT/3TC (300mg/150mg) ZAR 13,33 (US$ 1,27) (ZAR 3,81) US$ 0,36 ZAR 5,94 (US$ 0,57) 2.24 Nevirapine (200mg) ZAR 6,00 (ZAR 2,39) US$ 0,23 ZAR 3,49 (US$ 0,33) 1.72 (Based on exchange rate of US$1 = ZAR 10.50, applicable at time complaint lodged)

Paediatric formulations: 100ml Product Price sold to private sector: patented product WHO pre-qualified generic Estimated economic value Ratio: private sector to economic value AZT (50mg/5ml solution) ZAR 69,06 (US$ 6,58) (ZAR 16,07) US$ 1,53 ZAR 23,29 (US$ 2,22) 2.97 Lamivudine (10mg/ml) ZAR 97,92 (US$ 9,33) (ZAR 21,00) US$ 2,00 ZAR 38,22 (US$ 3,64) 2.56 (Based on exchange rate of US$1 = ZAR 10.50, applicable at time complaint lodged)

Overview of presentation Complaint to the Competition Commission What is the complaint? Why challenge private sector prices? Who are the complainants and the respondents? What must be proved? Conceptualising the role of legal action Building a case, building a coalition Completing unfinished business Engaging the Commission, increasing legal options

Building a case, building a coalition Diversity of complainants Different but related interests and needs Personal, professional and public interest Diversity of experts Medical Public, private and not-for-profit sector practice Adults and children Provision and management Number crunching Actuarial science and health economics Consumer protection

Overview of presentation Complaint to the Competition Commission What is the complaint? Why challenge private sector prices? Who are the complainants and the respondents? What must be proved? Conceptualising the role of legal action Building a case, building a coalition Completing unfinished business Engaging the Commission, increasing legal options

ARVs still inaccessible!!! Despite … Global campaign for access PMA v Mandela Price reductions Preferential pricing Doha Declaration UN Guidelines on HIV/AIDS and Human Rights: Revised Guideline 6 ARVs still inaccessible!!!

Overview of presentation Complaint to the Competition Commission What is the complaint? Why challenge private sector prices? Who are the complainants and the respondents? What must be proved? Conceptualising the role of legal action Building a case, building a coalition Completing unfinished business Engaging the Commission, increasing legal options

Engaging the Commission, increasing legal options PMA v Mandela Friend of the court Litigation as mobilisation Support of access-friendly legislation and state fulfillment of constitutional obligations TAC v Minister of Health Challenge to state’s failure to fulfill obligations State’s obligations to increase access at all levels Tau v GSK Independent investigation into abuse of monopoly

And now? Investigation completed Decision to refer Settlement negotiations Referral if unsuccessful Stop the practice! Administrative fine Class action for damages Licenses?

Contact details Jonathan Berger Law & Treatment Access Unit AIDS Law Project University of the Witwatersrand SOUTH AFRICA +27(0)11.717-8627 (t) +27(0)11.403-2341 (f) +27(0)83.419-5779 (m) bergerj@law.wits.ac.za www.alp.org.za