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By Ben Hirschler
LONDON, Mar 07 (Reuters) - US drugmaker Merck and Co. Inc. said Wednesday it was slashing the price of two AIDS drugs in developing countries and would make no profit on their sale.
The move, effective immediately, comes as the pharmaceuticals industry faces mounting pressure to do more to increase the flow of cheap life-saving drugs to sub-Saharan Africa, where the pandemic has hit hardest.
The cost of Merck's Crixivan drug--the first protease inhibitor to be offered at such deep discounts--will be $600 per patient per year, while Stocrin will be offered at $500.
The new prices represent reductions of some 40-50% from already discounted prices pledged to African governments last year.
Jon Liden, spokesman for the Geneva-based World Health Organization, said Merck's move was in part a response to increasing competitive pressure from Indian generic manufacturers.
"We have indications that other companies are in the process of doing the same...We find it very positive that prices are now coming down substantially," he told Reuters.
Bombay-based Cipla Ltd shocked the industry last month by announcing it planned to offered a cocktail of AIDS drugs for as little as $350 a year, or less than $1 a day.
TOO SLOW
There was also a recognition that a previous country-by-country approach to cheap AIDS drugs supplies was moving too slowly, Liden said. Only Senegal, Uganda and Rwanda have so far signed up to the UN-sponsored initiative launched last May.
"The companies themselves feel country-by-country negotiations are not progressing fast enough, and they are now coming out publicly with across-the-board price reductions," he said. Britain's GlaxoSmithKline--the world's largest supplier of HIV/AIDS medicines--last month pledged to widen its discounted access initiative by supplying drugs to a range of non-profit-making organizations.
"By making Crixivan and Stocrin available at significantly discounted prices, Merck is stepping up our own response to the urgent humanitarian need in Africa and other regions of the developing world," Merck CEO Raymond Gilmartin said in a statement.
AIDS drugs activists, however, believe such price cuts--while welcome--are a distraction.
UK charity Oxfam said the action was undermined by the tough stance taken by companies in defense of their patents, which was preventing developing countries from securing the lowest-cost supply of medicines.
The issue came to a head this week when a case brought by 39 of the world's biggest pharmaceutical companies to stop South Africa importing cheaper AIDS drugs came to trial in Pretoria.
The companies contend South African legislation allowing such cheap imports infringes their intellectual property rights. The South African government and the industry's critics argue that drug companies abuse their patents in the way they price medicines in different markets.
The trial was adjourned Tuesday until April 18.
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