1. 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

2. 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

3. Contextualising the complaint: using the law to increase access

4. Contextualising the complaint: old habits die hard

5. Contextualising the complaint: government comes to the table

6. 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

7. 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

8. 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)

9. 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

10. 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

11. 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

12. 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

13. 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)

14. 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)

15. 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

16. 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

17. 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

18. 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!!!

19. 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

20. 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

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

22. Contact details Jonathan Berger Law & Treatment Access Unit
AIDS Law Project
University of the Witwatersrand
SOUTH AFRICA
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