E-drug: Shamed and humiliated - the drugs firms back down
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[Copied from Ip-Health with thanks. KM]
http://www.guardianunlimited.co.uk/aids/story/0,7369,475000,00.html
Shamed and humiliated - the drugs firms back down
Special report: Aids
Chris McGreal in Pretoria
Thursday April 19, 2001
The Guardian
The world's largest drug companies are today expected to make a humiliating
climbdown and abandon their legal action against South African laws aimed
at getting cheaper medicines to the poor.
The suit by 39 pharmaceutical companies in the Pretoria high court, which
argued that the South African legislation infringed their patent rights,
has ultimately achieved the very thing it tried to prevent - encouraging
governments across the developing world to use the law to obtain more
affordable drugs.
But the withdrawal of the drugs firms from the case, described by one
government official as "unconditional surrender", will stave off another
public relations disaster. The companies faced having to reveal some of
their most closely guarded business secrets, including pricing policies,
profit levels and the source of funding for research into key anti-Aids
drugs.
The trial was scheduled to resume yesterday after a six- week recess.
During that time a groundswell of public and government opposition to the
legal action caused some of the largest firms to rethink their strategy.
Protesters across the globe accused them of putting profits ahead of lives
and Germany, France, Holland and the European parliament called for the
suit to be dropped.
Last-minute talks between five big firms - including the world's largest
pharmaceutical company, Britain's GlaxoSmithKline - and the South African
government dragged on through Wednesday, causing the court to postpone the
hearing until today.
The drug companies have now accepted virtually all of the legislation -
including the South African government's right to import generic drugs at a
fraction of the cost of brand names - but they are pressing the health
ministry to rewrite a key section of the law to clarify and limit the
circumstances in which it can grant compulsory licences for third parties
to manufacture patented medicines at a lower price.
It is not clear if the South Africans will give ground on this issue but
the government has already said that its primary interest is not in copying
patented drugs but in importing generics from other countries or
manufacturing them.
However, what is certain is that the big drug companies have lost all heart
for the fight. Although some smaller firms could technically pursue the
case, lawyers said it was highly unlikely that they will.
Mark Heywood, a legal strategist for the Aids pressure group, the Treatment
Action Campaign, which played a key role in forcing the drug companies to
drop the case, said: "The case was doing significant damage to the
multinationals' image and investor confidence in them. The case was also
forcing out of the woodwork certain aspects of their business practices
they did not want exposed in court and aired before the world's media. They
had no legal case."
A split has developed between some of the larger drug companies and the
Pharmaceutical Manufacturers Association of South Africa (PMA), which
headed the legal action.
Some drug firms are now saying the case should never have been pursued.
They were also disturbed at the content of some submissions by PMA lawyers,
which were a PR disaster. At yesterday's hearing, several drug firms sent
in their own legal teams.
One submission, which was particularly heavily criticised in South Africa,
argued that unless there were financial returns there was little incentive
for drugs companies to develop new Aids treatments.
While international opinion was clearly an important factor in the firms'
withdrawal, they had also realised they were on shaky legal ground.
The PMA effectively abandoned its argument that the South African law
breached international patent protection agreements before the court case
opened, after the World Trade Organisation and several governments said
Pretoria's legislation was legitimate. Instead, the drug companies argued
in court that the laws breached South Africa's own constitution by giving
too much power to cabinet ministers to decide when to override patents and
because they failed to define what "unaffordable" meant in a medical
context.
The government recognised that some of the legislation was poorly worded
and was preparing itself for a judgment that would uphold its right to
introduce such laws but require that this one be rewritten with greater
clarity.
As the first phase of the trial progressed, prospects of success steadily
dimmed while the cost to the drug companies' reputations was huge.
"They might have thought all this shit was worth taking if they were going
to win, but they knew they weren't," said one lawyer working on the case
against the drug firms. "The best they could hope to do was hold up the
implementation of the law a little longer during the appeals and maybe
scare a few other governments off of following South Africa's lead."
South African health officials say they are ready to put the new law into
practice within weeks once the legal challenge is finally dropped.
But despite international public opinion rallying around the South Africans
over access to anti-Aids drugs, the government has no intention of
importing anti-retrovirals in the near future even though one in nine of
the population - 4.7m - is HIV-positive.
It will instead seek medicines to combat opportunistic infections brought
on by Aids and drugs to deal with other diseases such as malaria.
Africa: the deadly toll
. 25.3m Africans were living with HIV or Aids in 2000 and 2.4m people died
of HIV-related causes
. Africa is home to nearly 70% of adults and 80% of children with HIV in
the world
. In South Africa and Zimbabwe, Aids could claim the lives of around half
of all 15-year-olds
. South Africa has more people living with HIV and Aids than any other
country. Pretoria estimates that 4.7m people are carrying HIV. Experts warn
the number may rise to 7m by 2010
. South Africa's neighbour Botswana has the highest rate of HIV infection,
with an estimated 35.8% of all adults living with the disease. Life
expectancy in Botswana has been cut to 44 years
. HIV patients occupy nearly 40% of the beds in the Kenyatta national
hospital in Nairobi and 70% of the beds in the Prince Regent hospital in
Burundi
. Aids deaths in South Africa are expected to rise from around 120,000 last
year to an annual 635,000 in 2010