Aurobindo sues South Africa over contract

Aurobindo Pharma is suing South Africa over an AIDS drug supply contract, saying that its bid was superior to those the government accepted. India's Aurobindo claims that its prices were almost one-third lower than products from the South African firms that won the government contracts, Business Day reports. And Aurobindo isn't fighting over peanuts: The South African tender to supply AIDS meds over two years was worth some $400 million total.

The choice may have been a matter of policy, however. The South African government gives precedence to domestic drugmakers because Indian manufacturers get "a vast bouquet of state subsidies, giving them a cost advantage of up to 30 percent over South Africa's firms," Business Day reported, citing Stravros Nicolaou, who chairs the local pharma association. "With a local preference in tenders, it really is to level the playing fields against the Indians. It is not giving us a leg up," Nicolaou said. Could this be a dispute for the governments themselves to take up? Sounds like an international trade negotiation to us.

- read the Business Day piece
- check out Bloomberg's coverage