[Ip-health] CPTech's 2003 reports for the RSA Competition Commission, in Hazel Tau et al.v GSK, Boehringer, et al

Jamie Love james.love at keionline.org
Thu Aug 14 05:41:16 PDT 2014


CPTech's 2003 reports for the RSA Competition Commission, in Hazel Tau et
al.v GSK, Boehringer, et al

On August 13, 2014, the Republic of South Africa (RSA) Competition
Commission (CC) released the redacted versions of the reports provided to
the CC by CPTech in 2003 in the TAC competition case involving GSK and
Boehringer Ingelheim. A complete set of the documents is available here
[see blog for link], and links to individual documents are listed below.

The case was more formerly known as Hazel Tau et al. v. GlaxoSmithKline,
Boehringer Ingelheim, et al. & Aids Healthcare Foundation et al v.
GlaxoSmithKline, Boehringer Ingelheim, et al. Case Numbers: 2002sep226 &

The final resolution of the case was a settlement between the plaintiffs,
and GSK and Boehringer Ingelheim, that included obligations to license
generic manufacturers to supply the GSK and BI antiretroviral (ARV) drugs
throughout sub-Saharan Africa.

Among the contemporary reports about the case are:

* GSK and BI issue anti-retroviral licences, Towards a free and fair
economy for all, Newsletter of the Competition Commission. Edition 15.
March 2004. http://www.compcom.co.za/newsletters/

* Belinda Beresford, The Price of Life: Hazel Tau and Others vs
GlaxoSmithKline and Boehringer, Law and Treatment Access Union of the AIDS
Law Project and Treatment Access Campaign. July 2003.

* Competition Commission Settlement Agreements Secure Access to Affordable
Life-Saving Antiretroviral Medicines, TAC Newsletter - 10 December 2003.

* Jonathan Berger, University of the Witwatersrand, Advancing public health
by other means: Using competition policy to increase access to essential
medicines, ICTSD-UNCTAD Dialogue on Ensuring Policy Options for Affordable
Access to Essential Medicines, Bellagio, 12-16 October 12-16, 2004.

During that time, CPTech also linked to several news reports and NGO
statements about the case, here:

Context of the CPTech Documents

In 2003, CPTech was hired by the RSA Competition Commission to evaluate the
Hazel Tau and TAC complaint regarding excessive pricing of drug to treat

CPTech assembled an in-house team to evaluate the complaint, led by CPTech
Executive Director James Love, and including lawyers Sean Flynn and Robert
Weissman, Iris Boutros (then a doctoral student at Harvard), Michael
Palmedo and Thiru Balasubramaniam (formerly employed by WHO). In addition,
CPTech received expert reports from Aidan Hollis (Industry Canada,
University of Calgary), Alicia Yamin (Harvard), Brook Baker (Northeastern),
Carlos Correa (CEIDIE), Eleanor Fox (NYU), FM Scherer (Harvard), Jerome
Reichman (Duke), Joel Lexchin (University of Toronto), Juan Rovira (World
Bank) assisted by Achal Prabhala (Yale), Sandra Fredman (Oxford), Shubha
Ghosh (SUNY), William Jack (Georgetown) and a five person team at Oxford:
Katja Ziegler, Estelle Dehon, Tina Piper, Sudhir Krishnaswamy and Shamnad
Basheer (Oxford Public Interest Lawyers).

CPTech provided the RSA Competition Commission with two evaluations
covering three violations of the RSA competition laws. The first evaluation
concerned abuses of patent rights related to blocking access to essential
facilities (the patents on the ARV drugs) and the exclusionary act of
refusing licenses to patents. The second evaluation concerned excessive
pricing. These reports were accompanied by 25 expert reports covering a
wide range for topics. All of the CPTech reports were protected under a
confidentiality agreement between CPTech and the competition commission,
and until they were released by the Commission to TAC on August 13, 2014.

The CPTech evaluations and the expert reports were provided to the
Competition from August 28, 2003 to September 20, 2003.

On October 16, 2013, the Competition Commission published a media release
with the title: "Competition Commission finds pharmaceutical firms in
contravention of the Competition Act." The release read in part:

<================================Begin Quote====
16 October 2003

Competition Commission finds pharmaceutical firms in contravention of the
Competition Act

The Competition Commission has found that pharmaceutical firms
GlaxoSmithKline South Africa (Pty) Ltd (GSK) and Boehringer Ingelheim (BI)
have contravened the Competition Act of 1998. The firms have been found to
have abused their dominant positions in their respective anti-retroviral
(ARV) markets.

In particular the Commission has found the firms have engaged in the
following restrictive practices:

1. Denied a competitor access to an essential facility
2. Excessive pricing
3. Engaged in an exclusionary act

The Commission has decided to refer the matter to the Competition Tribunal
for determination.

Menzi Simelane, Commissioner at the Competition Commission, says," Our
investigation revealed that each of the firms has refused to license their
patents to generic manufacturers in return for a reasonable royalty. We
believe that this is feasible and that consumers will benefit from cheaper
generic versions of the drugs concerned. We further believe that granting
licenses would provide for competition between firms and their generic

"We will request the Tribunal to make an order authorising any person to
exploit the patents to market generic versions of the respondents patented
medicines or fixed dose combinations that require these patents, in return
for the payment of a reasonable royalty. In addition, we will recommend a
penalty of 10% of the annual turnover of the respondents' ARVs in South
Africa for each year that they are found to have violated the Act."

Simelane said these practices violate the Competition Act of 1998's
prohibitions against excessive pricing (section 8(a)), refusing access to
essential facilities (section 8(b)) and exclusionary acts that have an
anticompetitive effect that outweighs technological, efficiency or other
pro-competitive gains (section 8(c).

. . .

The original complaint in this matter was filed by Hazel Tau and others
alleging that GSK and BI were charging excessive prices to the detriment of
consumers for their patented ARV medicines.

. . .
====End Quote ================================>

On the same day, the Treatment Action Campaign issued this statement:

<================================Begin Quote====
16 October 2003

The Treatment Action Campaign welcomes the statement below by the
Competition Commission. Just over a year ago, Hazel Tau and 10 others
lodged a complaint at the Competition Commission against GlaxoSmithKline
and Boehringer Ingelheim for excessive pricing of their antiretroviral
medicines. The Competition Commission has now decided to refer this matter
to the Competition Tribunal for ajudication.

The 11 complainants are: COSATU, the TAC, CEPPWAWU, Hazel Tau, Nontsikelelo
Zwedala, Sindiswa Godwana, Sue Roberts, Isaac Skosana, William Mmbara,
Steve Andrews and Francois Venter. Two additional parties joined the
complaint in February 2003, the AIDS Consortium and a TAC volunteer who
subsequently died of AIDS in June .

For questions on the Competition Commission case, please contact Jonathan
Berger on 011 717 8600 or 083 419 5779, or Fatima Hassan on 083 279 9962.
====End Quote ================================>

Both TAC and the RSA Competition Commission subsequently entered into
settlements with GSK and Boehringer to provide generic manufacturers with
licenses to their patents.

KEI Director James Love, the lead consultant to the RSA Competition
Commission in the Hazel Tau case, had this to say about the release of the
<================================Begin Quote====
"The reports released by the Competition Commission involve the work of
more than two dozen talented and dedicated experts. Nearly all of the
outside experts worked on a pro bono basis, and the CPTech staff spent
months working for very modest pay. The 25 expert reports and the two
evaluations covered a wide range of topics and it will be useful to have
these documents in the public domain. The fact that RSA Competition
Commission commissioned this work, which was extensive and often
innovative, and acted on the recommendations, speaks to the commitment of
the Competition Commission, including in particular Diane Terblanche, who
lead the work of the Commission on this case, to address the concerns about
access to ARV drugs put forward so forcefully in the Hazel Tau/TAC
complaint. Among the original CPTech team, nearly everyone remains engaged
in efforts to expand access to medical treatments, including Thiru
Balasubramaniam, who works for KEI, Sean Flynn and Michael Palmedo, now
working at the American University Program on Information Justice and
Intellectual Property, and Robert Weissman, now the President of Public
Citizen. The outside experts included many of the most authoritative and
knowledgeable researchers on intellectual property rights, competition law
and human rights, and the contributions of each made deep impressions on
the Competition Commission and its staff. Now, with the release of the
documents, thanks to the request by TAC, a wider audience will have access
to these reports."
====End Quote ================================>

The titles and authors of the CPTech documents follow:

 * Economic Analysis Of The Need For A Compulsory License Remedy To Promote
Access To Essential Medicines Under Section 8(C) Of The South African
Competition Act | Author: Professor Aidan Hollis (Industry Canada,
University of Calgary)

 * Human Rights Obligations Regarding Access To Medications | Author:
Alicia Ely Yamin (Harvard School of Public Health)

 * Essential Facilities For Fixed-Dose Combination ARVs | Author: Professor
Brook K. Baker (Northeastern University School of Law)

 * International Experience With Regard To "Refusal To Deal" | Author:
Professor Carlos Correa (Center for Interdisciplinary Studies of Industrial
Property and Economics CEIDIE, Law Faculty, University of Buenos Aires)

 * Section 8(A) Threshold For "Excessiveness" As Lower For Necessities Than
Luxuries | Author: Eleanor M. Fox (Walter J. Derenberg Professor of Law New
York University School of Law)

 * In the Matter of Glaxosmithkline South Africa et al. | Author: Professor
F.M. Scherer (John F. Kennedy School of Government, Harvard University)

 * Treatment And FDCs | Author: Iris Boutros

 * The AIDS Epidemic In South Africa | Author: Iris Boutros

 * The Socio-Economic And Demographic Impact Of The HIV/AIDS Epidemic In
South Africa | Author: Iris Boutros

 * Compulsory Licences: History And Legal Principles | Author: Professor J.
H. Reichman (Bunyan S. Womble Professor of Law, Duke University)

 * Evidence Regarding Research and Development Investments in Innovative
and Non-Innovative Medicines | Author: James Love

 * Evaluation Of Excessive Pricing | Author: James Love

 * Compensation for Non-Voluntary Use Of a Patent On Medical Technologies |
Author: James Love

 * Price Evolution Of Antiretroviral Drugs 1996 To 2002 Maryland
Reimbursements For Medicaid Program | Authors: James Love and Thiru

 * The Effects Of Generic Competition On Drug Prices Over Time | Authors:
James Love and Thiru Balasubramaniam

 * The Role Of Marketing In The Pharmaceutical Industry | Author: Professor
Joel Lexchin (School of Health Policy and Management, York University,
Department of Family and Community Medicine at the University of Toronto)

 * Promoting Affordability Of Antiretroviral Therapy (ART) In South Africa
| Author: Juan Rovira (World Bank), assisted by Achal Prabhala

 * Annex A - Antiretroviral Prices | Author: Michael Palmedo

 * E.C. Case Review: Essential Facilities/Refusal To License | Authors:
Katja Ziegler, Estelle Dehon, Tina Piper, Sudhir Krishnaswamy and Shamnad
Basheer (Oxford Public Interest Lawyers)

 * Relevance Of The European Convention On Human Rights | Author: Professor
Sandra Fredman (Exeter College and Faculty of Law, Oxford)

 * Excessive Pricing as Abuse of Dominant Position | Author: Professor
Shubha Ghosh (University at Buffalo, SUNY, Law School)

 * Economic Analysis Of Prices And Royalties For ARVs In South Africa |
Author: Professor William Jack (Department of Economics, Georgetown

 * Economies Of Scale are Important and a Compulsory License Must Permit
Exports so that a Domestic Producer Can Reach Efficient Economies Of Scale
| Author: Robert Weissman

 * The Legislative Purposes and History of the South Africa Competition Act
| Author: Robert Weissman

 * The World Trade Organisation'S Agreement On Trade- Related Aspects Of
Intellectual Property | Author: Robert Weissman

 * Focusing on Exclusionary Practices | Author: Sean Flynn

 * Evaluation Of The Essential Facilities And Exclusionary Acts | Authors:
The Consumer Project on Technology

James Love.  Knowledge Ecology International
http://www.keionline.org, KEI DC tel: +1.202.332.2670, US Mobile:
+1.202.361.3040, Geneva Mobile: +41.76.413.6584,   twitter.com/jamie_love

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