Cipla's March 7, 2001 Compulsory Licensing Request

7th March 2001

Mr McDonald Netshitenzhe
Registrar of Patents
Department of Trade and Industry
Private Bag X400
Pretoria 0001
South Africa

Dear Mr. McDonald Netshitenzhe:

The following is a request for compulsory licenses under Article 56 of the South Africa Patents Act. Specifically, we request licenses for the patents that are relevant to the following HIV drugs.

nevirapine
lamivudine
zidovudine
stavudine
didanosine
efavirenz
indinavir
abacavir

and combinations of the above drugs.

We are requesting a non-exclusive compulsory licenses under 56(c), on the grounds that there is an abuse of patent rights because:

"the demand for the patented article in the Republic is not being met to an adequate extent and on reasonable terms;"
According to the Department of Health, there are from 4 to 5 million HIV infected persons in South Africa, and less than 2 percent are receiving antiretroviral treatment. Any result that leaves more than 98 percent of a population untreated and subject to painful death is not adequate. Submissions of the Treatment Access Campaign in the current litigation over the Medicines Act indicate the price of drugs is a significant barrier for access to health care. If the Department permits competition for these drugs, prices will fall, and more people will receive drugs, saving lives and reducing suffering.

Experience in Brazil and other countries demonstrates the following important factors:

  1. Competition reduces prices.
  2. The benefits of price competition increase over time.
  3. The decision by Brazil to purchase anti-retroviral products from generic suppliers created a large enough market in the competitive sector to achieve significant economics of scale in the raw materials markets, ultimately lowering the prices of drugs globally.
This is an urgent request. According to Department of Health officials, there are now about 20,000 deaths from AID every month, and this number is expected to grow to as many as 33,000 in the next two years. Delays in lowering the price of drugs result in death and suffering.

CIPLA seeks to create additional competition for antiretroviral drugs, and has sought voluntary licenses from the brand name companies that market each of these products, offering to pay a royalty of upto 5 percent on net sales to patent owners. It is well known that competition drives down the prices of drugs. CIPLA does not seek an exclusive license, and indeed, CIPLA encourages the Department to issues licenses to all bona-fide competitors for any or all of these products.

It is our opinion that South African citizens would benefit greatly from a more competitive market for antiretroviral drugs, and more important, that South Africa can only maximize access to medicines by pursuing a strategy that embraces the competitive sector, rather than dealing with monopolistic and cartel like suppliers.

Please advise us on the procedures to follow to obtain the licenses.

With kind regards,

Yours sincerely,
Dr Y K Hamied
Cipla Ltd.

CPT Home IP and Healthcare CPT page on South Africa CPT page on Cipla