Antiretroviral (ARV) drugs to treat HIV & AIDS can be accessed without difficulty in the Western world. One reason for this is that they are mainly produced there by large pharmaceutical companies. However, exporting them to Africa is expensive. Due to the extensive HIV pandemic and the costly nature of ARV imports, approximately only 100,000 of the 350,000 Ugandans in need of antiretroviral therapy (ART) are currently receiving much-needed ARV drugs. Currently, only 10% of the drugs are manufactured locally. With regards to imported drugs, 5 to 7% are Western, patented products, and 93% are generic products, mainly from India (2).
In order to address the enormity of the cost of imported ARVS, and also to promote the sustainability of its HIV response, Uganda opened the Luziria Drug Factory in Kampala to produce its own generic ARV drugs. Although the International Committee of the Red Cross cleared the factory to produce ARVs in 2009, without the additional pre-qualification by the World Health Organization (WHO) these drugs could not be sold or distributed internationally. As a result, initially the Luziria factory could not sell generic ARV drugs to the Governments of other countries or to international charitable or donor organisations, some of which provide Ugandans with ART. Safeguards such as the pre-qualification by the WHO are in place to prevent unregulated laboratories churning out counterfeit and substandard ARV drugs (3). Then in March 2010, the Luziria Drug Factory received pre-qualification by the WHO, and was able to both manufacture and market its generic ARVs to the Global Fund, the US President’s Emergency Plan for AIDS Relief (PEPFAR), and Medicéns Sans Frontiéres (MSF) (4), among others.
Despite the promise of the Luziria Drug Factory and the safeguards already enforced by the WHO’s pre-qualification scheme and the Trade-Related Intellectual Property Rights (TRIPS) law of the World Trade Organisation, both of which the factory complies with, the Ugandan Government’s proposed Counterfeit Goods Bill threatens it. The Bill would make it illegal not only to import generic ARV drugs, but also to produce and/or distribute these drugs locally or to neighbouring countries, such as Kenya, Burundi, Rwanda, Tanzania, the Democratic Republic of Congo (DRC) and Sudan (5).
The Luziria Drug Factory
The Luziria drug factory was erected in 2007 by Quality Chemicals Limited in conjunction with the technology and expertise of Indian pharmaceutical giant Cipla, and is the fourth plant in Africa to locally produce generic ARV drugs, after Egypt, Nigeria, South Africa, and soon Mozambique (6). The pre-qualification issued by the WHO in March 2010 means that this factory can now both legally manufacture and market generic ARV drugs such as Duovir-N, a first-line treatment for HIV & AIDS, locally and internationally, and make them available in bulk to charitable or donor organisations currently providing HIV positive Ugandans with life saving drugs (7).
The list of pre-qualified medicinal products and manufacturing plants by the WHO is a vital tool for any agency or organisation involved in the bulk purchasing medicines at local, country or international level (8). The pre-qualification certifies that the WHO has comprehensively evaluated the quality, safety, and efficacy of the ARV drugs manufactured at the factory based on information submitted by the manufacturers and inspection of corresponding manufacturing and clinical sites (9).
Patients benefiting from locally produced generic ARVs
Local production of generic ARVs directly benefits patients, as drugs are produced at a lower cost, especially compared to patented ARV drugs imported from foreign pharmaceutical companies. Emmuel Katongole, the managing director of the Luziria Drug Factor, indicates that locally produced ARV drugs will be around 30% cheaper than imported versions, which means that the monthly cost of triple combination therapy would become available at around approximately US$ 9 per person: a substantial saving. Although these drugs would be available at significantly reduced costs, the pre-qualification by the WHO means that the quality, safety and efficacy of these generic ARV drugs would not be compromised in any way.
In March 2010, the media reported that the Luziria factory would soon produce top of the line fixed-dose combination ART drugs such as Triomune. These drug combinations, also referred to as Highly Active Therapy (HAART), consist of a set of three drugs and include two nucleoside/nucleotide transcriptase inhibitors (NRTIs,) for example, Lumivudine and Stavudine, plus one non-nucleotide reverse transcriptase inhibitor (NNRTIs), such as Nevirapine (10). The generic equivalents to Zerit, Epivir and Viramune, other ARVs, were previously only available from branded pharmaceutical companies such as Bristol-Myers Squibb Co, GlaxoSmithKline, and Broehringer Ingelheim Pharmaceuticals (11). Thanks to local production, patients will be able to take one tablet twice a day, containing three drugs in one, instead of a cocktail currently consisting of 12 ARV drugs. Fixed-dose combination drugs are especially beneficial to Ugandans suffering from food-insecurity, as they can be taken without food. These tablets will also be produced in a heat-resistant form to specifically cater to conditions of the Eastern African region, where temperatures are high and refrigeration facilities are scarce.
In addition to the production of ARVs, it is hoped that this factory will help fill the gaps in their distribution, such as the national ARV shortages seen in the Katakwi, Parillsa, Rakai, Hoima and Luwwero regions in 2008, where complete stock-outs left patients without ARV drugs for weeks or sometimes even months (12). Stock-outs pose risks to patients as interrupted ARV treatment threatens virological and immunological gains, and precipitates the progression towards AIDS. The inability to sustain ART over a period of time also means that a considerable number of HIV-positive Ugandans would not be able to access ART, which would contribute to poor health outcomes, including lower quality of life, higher health costs (such as the need for second-line ARV drugs), the development of drug-resistance, higher hospitalisation rates or treatment failure. The Luziria factory aims to prevent potential problems associated with the limited availability of ARV drugs by producing 2 million tablets per day, and increasing this amount to 6 million tablets per day or 1.8 billion tablets annually when operating at full capacity (13).
Intellectual Property Rights - Confusing generics with counterfeits?
A possible threat to the potential of locally produced generic ARVs comes in the form of protections of intellectual property rights. The World Trade Organisation’s (WHO) Trade-Related Aspects of Intellectual Property Rights (TRIPS) protects such rights, while also making allowances for certain exceptions. One exception is the import and production of generic medication in the case of a national emergency, such as that which might arguably be posed by the HIV & AIDS pandemic. Such exceptions come under an agreement which aims to establish a balance between the rights of intellectual property holders and the legitimate rights of third parties to access generic ARV drugs. One exception directly addresses the issues of the illegal flow of generic ARVs and opportunities for voluntary license agreements, which affect the profits of branded companies (14). Voluntary licensing entails a government requesting a voluntary license from a patent holder to allow generic drugs to be supplied during a public health emergency either through imports or by local production (15). Two other exceptions allow for Uganda’s importation of generic ARV drugs through parallel importation, where the price difference between markets can be exploited by a country’s importing through a third country (Uganda from Brazil, as opposed to the U.S., for example), and through compulsory license, both of which are invoked without the consent of the patent holder (16).
Under TRIPS and as a developing country, Uganda is allowed to employ exceptions for a period of 10 years. After this grace period elapses in 2016, it will have to comply with the provisions of the law. Among these provisions is the minimum term of 20-year patent protection, which would contribute the delayed marketing of generic versions of new ARV drugs and prices that remain high for a longer period of time. Until this period elapses, the Luziria Drug Factory can take advantage of existing and emerging technical advances to establish and expand its capacity to locally produce generic ARV drugs, thereby creating a pharmaceutical base (17). Thus, Ugandans “should” be able to reap the benefits of lower costs, top of the line technologies, and increased availability through the local production of generic ARVs.
However, with the proposed Counterfeit Goods Bill, the Ugandan Government is threatening to undermine the local production of generic ARV drugs. Similar to the TRIPS agreement, the proposed Counterfeit Goods Bill aims to promote the protection of intellectual property, and comes with the financial backing of the European Union (EU) as part of a UK€ 5,000,000 financing agreement with Uganda’s Ministry of Tourism, Trade and Industry in 2006 (18). If adopted, this Bill would not acknowledge the “exceptions” made by the TRIPS Agreement, and would make it illegal not only to import generic ARV drugs, but also to produce them locally (19). If this Bill is introduced by the Ugandan Government, it would prohibit the release of counterfeit goods into the channels of commerce, and make it an offence to trade in counterfeit goods. It would also empower the Commissioner of Customs and the Uganda National Bureau of Standards (UNBS) to seize and detain suspected counterfeit goods (20).
Activists agree that the trade in sub-standard and fake medications should not be tolerated, but they indicate that that this proposed Bill would not address the problem of bad quality associated with products, including ARVs. However, the as property rights’ expert Sisule Musungu indicates, this Bill is not about safety standards associated with counterfeit goods, but is rather about the promotion of trade interests (21). Alex Nakajjo, a trade operations officer with the EU delegation to Uganda in 2009, also points out that “the bill is only concerned with those who infringe on protected intellectual property rights…and that the EU does not support counterfeit trade and that counterfeits should not be confused with generic drugs." (22)
However, in a serious complication, the Programme of Information Justice and Intellectual Property (PIJIP) at the Washington College of Law in Washington indicate that Ugandan law makes no distinction between legal generics and counterfeits (23). The Bill defines a counterfeit as “an imitation of something else with an intent to deceive, and includes any device used for the purpose of counterfeiting, and goods which breach intellectual property rights, as well as goods intended to gain unfair commercial advantage with goods of a similar nature.” (24) In this reading, generic ARV drugs are confused with counterfeits, as generic drugs which are locally manufactured are products not associated with a specific brand, and they can only be identified by their category. Though generics are not counterfeits because they do not pretend to be a known brand, because they are cheaper than brand products, it is probable that under this Bill, such products will be deemed to be intended to gain an unfair commercial advantage with goods of a similar nature and hence denied access to the stream of commerce as counterfeits (25).
The Counterfeit Goods law has caused an outcry amongst activists because its passage would threaten access to life-saving ARV drugs in Uganda (26). They have also been puzzled about the Ugandan Government’s willingness to adopt a law which so broadly criminalises the production of generic drugs and thereby places affordable drugs outside the reach of HIV-infected individuals in the country (27).
Additionally, the proposed Counterfeit Goods Bill would also impinge on the export of generic ARV drugs. Furthermore, the Bill would eliminate the option of parallel imports granted under the TRIPS agreement, where there is a price difference for the same product in different markets, to import the product from a cheaper market for resale (28). Uganda’s ability to import foreign goods produced legitimately under TRIPS flexibilities would not be possible under any circumstances after the passage of the Bill, be it under parallel importation or intellectual property licenses, compulsory, voluntary, or otherwise with the passage of the Bill. Activists fear that this Bill, once enacted, will deny Ugandans access not only to locally produced generic ARV drugs but also to import these safe, effective, and quality generic ARV drugs. Consequently, ARV will no longer be affordable or freely available due to the restrictions imposed by the Counterfeit Goods Bill.
If adopted, the Counterfeit Goods Bill will protect trade interests by apprehending those who infringe on protected intellectual property rights, and seizing and detaining suspected counterfeit goods. However, this proposed Bill prioritises trade interests over public by disregarding allowances under the TRIPS agreement to locally produce generic alternatives to ARV drugs. The euphoria associated with the breakthroughs made by the Luziria Drug Factory, in terms of enhancing Uganda’s independence and the reduction in costs associated with importing only active pharmaceutical ingredients, may be short-lived if Government implements this Bill.
(1) Nadia Vermeulen is an external consultant in CAI's HIV & AIDS unit (
(10) World Health Organization HIV/AIDS Programme, “Antiretroviral therapy for HIV infection in adults and adolescents: recommendations for public health approach,” 2006.
(12) This has also been the case in other African countries, such as in the Limpopo Province in South Africa.