Deal leads to cut in TB drug prices

• J&J slashes drug price after competition watchdog agrees not to prosecute a complaint of alleged anticompetitive behaviour

Health NGOs have hailed the agreement reached between the Competition Commission and pharmaceutical giant Johnson and Johnson (J&J) and its subsidiary Janssen Pharmaceuticals over the termination of the patent over a key drug for tuberculosis (TB). In terms of the agreement, J&J will not enforce its patent over Bedaquiline, which is used for drug-resistant TB in 134 low- and middle-income countries and will lower the price it charges the department of health for the drug by about 40%.

Health NGOs have hailed the agreement reached between the Competition Commission and pharmaceutical giant Johnson and Johnson (J&J) and its subsidiary Janssen Pharmaceuticals over the termination of the patent over a key drug for tuberculosis (TB).

In terms of the agreement, J&J will not enforce its patent over Bedaquiline, which is used for drug-resistant TB in 134 lowand middle-income countries and will lower the price it charges the department of health for the drug by about 40%.

Not enforcing its patent will open the market to generic suppliers and reduce the price.

Medecins Sans Frontieres (MSF) and the Health Justice Initiative (HJI) said J&J’s secondary patent would have enabled an extension of the corporation’s monopoly on Bedaquiline in SA until 2027 — a tactic known as evergreening. The result would have blocked less expensive, generic Bedaquiline from entering the country.

They said the J&J agreement to withdraw the secondary patent in SA was “a significant step to increase access to affordable Bedaquiline in SA, a benefit to the hundreds of thousands of people affected by TB” in the country.

MSF’s access campaign advocacy adviser Candice Sehoma said the two organisations welcomed the Competition Commission’s efforts “in recognising J&J’s tactic of patent evergreening as a blatant attempt by a pharmaceutical corporation to extend its monopoly and put its profits before people, and we applaud the Competition Commission prioritising the tackling of similar issues.

“We hope that this significant step will increase access to affordable Bedaquiline for people living with TB in SA, as the country will now be able to purchase more affordable, generic versions of Bedaquiline and could see more generic producers enter the market to bring the price of Bedaquiline even lower, and ultimately, save more lives from TB.”

HJI founder Fatima Hassan welcomed the fact the commission was taking the matter of health product patent evergreening seriously.

“Hopefully, the Competition Commission’s investigation will also be a warning sign to other corporations that are benefiting from an indefensibly lax patenting regime in SA and elsewhere in Africa. These corporations must now be interrogated and investigated by regulatory agencies for pricing and evergreening patenting strategies for several key medicines needed to prevent and treat HIV, cancer, cystic fibrosis, TB and other diseases affecting our people,” Hassan said.

In terms of the agreement with the Competition Commission, J&J and its subsidiary have reduced the price of Bedaquiline charged for the department of health about 40% from R5,577.12 to R3,148 inclusive of VAT and logistics.

According to MSN and HJI, J&J charged the Global Drug Facility, the world’s largest procurer of TB medicines and diagnostics from which SA cannot procure, R2,446 for a six-month course per person (without potential local charges, for example VAT).

J&J has agreed not to enforce its secondary patents in SA as well as in 134 low- and middleincome countries.

Due to the agreement, the commission has decided not to prosecute a complaint of alleged anticompetitive behaviour and abuse of dominance against J&J and its subsidiary. The complaint was initiated in September 2023 and was based on their application for a secondary patent for Bedaquiline. The commission decided not to refer the complaint to the Competition Tribunal for prosecution.

Being granted a secondary patent for Bedaquiline would have prolonged the lifespan of the patent to 2027.

“This conduct effectively restricted the entry of generic medication, and allegedly enabled these companies to charge excessive prices to the national department of health,” the commission said.

“The conduct was assessed as a possible contravention of the Competition Act. The commission will continue to prioritise work in secondary patents and act particularly where secondary patents have failed in other jurisdictions with more rigorous assessments.”