Bombay-based Cipla Ltd. will sell the three-drug, anti-retroviral cocktail to Doctors Without Borders for $350 a year per patient, instead of the $10,000 to $15,000 charged in the United States and Europe, Cipla chairman Yusuf Hamied said Wednesday.
The decision could revolutionize the treatment of HIV patients in developing countries, where the virus is most rampant but it's unclear if the companies holding patents on the drugs will go along.
Annick Hamel, of Doctors Without Borders, said the Paris-based aid agency is studying the proposal "with a lot a lot of interest."
"For us, it's excellent news," said Hamel, who runs the group's Campaign for Access to Essential Medicine that would oversee the project.
"It's going to make a huge difference," said Anjuli Gopalan, executive director of an advocacy group for AIDS patients in India, the Naz Foundation. But Gopalan warned the proposal could get India into "a lot of trouble" because of international patent laws enforced under the World Trade Organization.
The cocktail consists of two 40 milligram tablets of stavudine, two 150 milligram tablets of lamivudine and two 200 milligram tablets of nevirapine, all of which are patented and protected under WTO rules.
Bristol-Myers Squibb holds the patent on stavudine under the brand name Zerit; GlaxoSmithKline of Britain developed lamivudine, also known as Heptovir; and Boehringer Ingelheim of Germany holds the rights to nevirapine under the name Viramune.
Under WTO rules, if a country fails to enforce international patent laws, punitive trade sanctions could be imposed, but whether the big drug companies pressure their national governments to bring a case in the WTO remains to be seen, considering the sensitivity of the issue.
A spokesman for GlaxoSmithKline in London, Phil Thompson, said the company was not consulted about Cipla's offer and was waiting to see the details.
A spokesman for Boehringer Ingelheim refused to say if the company would take legal action against Cipla, but it has said in the past that "intellectual property rights should be protected."
Officials of Bristol-Myers Squibb were not immediately available for comment.
Hamied said Cipla can manufacture the drugs so cheaply because his company makes the raw materials and production costs in India are low.
The key to the program is a three-tiered pricing scheme in which wholesalers would pay $1,200 for enough drugs to treat one patient for a year; governments would pay $600 and Doctors Without Borders would pay $350.
"We're not making money, but we are not going to lose money, either," Hamied said. "With the average of the three prices, we should break even.
"This is my contribution to fighting AIDS," Hamied said, adding he was inspired by the outpouring of aid to India after the recent earthquake.
Hamel of Doctors Without Borders said Cipla's offer showed that quality generic drugs can be made, sold and distributed at prices far lower than currently on the market.
The aid group has campaigned for two years to convince Western pharmaceutical companies to cut drug prices.
GlaxoSmithKline, Bristol-Myers Squibb and Boehringer Ingelheim have all agreed to participate in the International Partnership Against AIDS in Africa initiative, which will supply drugs at a discounted price to the governments of developing countries, but the prices are still about $1,100 per patient per year.
In a statement Wednesday, Doctors Without Borders called on the major manufacturers to match Cipla's offer.
Critics of the cheaper drugs argue that patients taking the drugs must be closely monitored in a well-equipped clinic, something that is rare in developing countries. AIDS activists, though, say that Western doctors are too cautious and that the problem is too large to deny those with HIV access to the drugs.
By CHRIS TOMLINSON