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Aurobindo sues South African govt alleging bias in AIDS drugs supply contract

Tuesday, June 30, 2009, 10:50 This news item was posted in Industry category and has 0 Comments so far.

Aurobindo lost the $400 million AIDS drugs contract to South African rival firms –Aspen and Adcock- despite a 30% discount

India’s Aurobindo Pharma Ltd has started legal proceedings against South African government alleging bias in granting contract to supply AIDS drugs.

The generic maker Aurobindo is currently the world’s largest producer of antiretroviral AIDS drugs.

Aurobindo lost a $400 million AIDS drugs-supply contract from the South African government to the domestic companies, despite Indian drugmaker’s offering the drugs at around one third cheaper than the rival companies.

At least 60 percent of the contract to supply anti-AIDS drugs floated last year for the period of June to next May went to the rival firms – Aspen Pharmacare Holdings Ltd. and Adcock Ingram Holdings Ltd.—Aurobindo was quoted as saying in a South African newspaper.

The rest of the supply contract was awarded to the patent holding companies.

None of six Indian companies — including Aurobindo, Cipla and Ranbaxy — had participated in the tender could win the contract for around six products to treat HIV/AIDS.

So, Aurobindo initiated proceedings to sue  South Africa’s National Treasury for discrimination in granting drug-supply contract and obstructing the companies from having a level-playing field.

The Indian companies get state subsidies South African government. The subsidies give Indian drugmakers a cost advantage of 30 percent. South African government gives preference to local suppliers to enable them to compete with Indian manufacturers.

Earlier, the South African government had cancelled a tender for efavirenz earlier, in which Aurobindo had a clear edge over branded makers, without giving any explanation. The price quoted by Aurobindo for efavirenz was 120 per cent less than the local product available in the South African market. This could have meant a savings of 178 million rand over the two-year contract period for the government, reports said.

Nearly 12 companies, including Roche, Bristol Meyers Squibb and Abbott Laboratories and Indian companies such as Cipla, Ranbaxy, Matrix, Aurobindo and Hetero Drugs were in the race for the global contract. However, Hetero Drugs withdrew from the tender later.

South Africa’s drug regulator Medicines Control Council (MCC) South Africa has granted approval to manufacture and market five more products in South Africa Auro-Abacavir300mg Auro-abacavir 20mg/ml oral solution, Auroprozil 250mg & 500mg, Cefprozil tablets, Auro-cefotaxime 250mg, 500mg, 1000mg & 2000mg and Auro-Cephalexin 250mg & 750mg tablets.

Headquartered at Hyderabad, India,Aurobindo Pharma Limited is the largest Active Pharmaceutical Ingredients (API) manufacturer under FDA approved facility. Aurobindo is also one of the leading manufacturers of penicillin & cephalosporine products.The company’s manufacturing facilities are approved by several leading regulatory agencies like US FDA, UK MHRA, WHO, Health Canada, MCC South Africa, ANVISA Brazil.

Aurobindo is leading manufacturer of generic pharmaceuticals, as well. The company’s product portfolio is spread over 6 major therapeutic/product areas encompassing Antibiotics, Anti-Retrovirals, CVS, CNS, Gastroenterologicals, and Anti-Allergics. Aurobindo is marketing these products in over 100 countries.

As on 31.03.2009, 95 abbreviated new drug applications (ANDAs) have been approved in USA including 27 tentative approvals. So far Aurobindo launched 48 products in the USA market.

In May, Aurobindo Pharma further expanded its partnership with Pfizer Inc.by executing licensing and supply agreements for several Solid Dosage and Sterile products for a number of emerging market countries.Under the terms of the agreement, Pfizer has acquired rights to 55 solid oral dose products and 5 sterile injectable products under therapeutic segments such as antiinfectives, cardiovascular (CVS) and central nervous system disorders (CNS). for several countries throughout Asia, Latin America, Africa and the Middle East.

Aurobindo US Joint Venture Cephazone Pharma LLC has received approval for its original Abbreviated New Animal Drug Application (ANADA) for Ceftiofur Sodium Sterile Powder – the generic equivalent of Pfizer Inc’s Naxel from the US Food and Drug Administration Center for Veterinary Medicines.

Recently, Aurobindo’s wholly owned subsidiary Aurobindo Pharma Australia Pty Ltd has received its third approval from the Therapeutic Goods Administration (TGA), Government of Australia for the registration of simvastatin Tablets 5, 10, 20, 40 & 80 mg tablets.

Similarly, Aurobindo Pharma Limited  received its first approval from Swissmedic, Government of Switzerland for the license of Finasteride APL Tablets 5mg.

Aurobindo registered a total operating income of Rs 3124.2 crores  for the financial year 2008-09, up by 27.7%  from Rs 2446.5 crores in the corresponding period last year. The operating profit before Fx stood at Rs 573.2 crores up by 63.0% compared to Rs 351.7 crores, a year ago. During the year, the company has incurred Fx loss of Rs 254.7 crores, which includes loss due to restatement of Foreign Currency Convertible Bonds (net of deposits) of Rs 223.3 crores (gain of Rs 49.6 crores).

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