Drug case dropped

All 39 pharmaceutical companies "unconditionally" drop their action in a South African court over drug patents

19 April 2001

All 39 pharmaceutical companies involved in a South African court case over drug patents have agreed to drop their action, in what analysts are calling a humiliating climb-down. The action was widely seen as a test case for how drug patents are used in developing countries.

The South African Pharmaceutical Manufacturers Association (PMA) was contesting a 1997 law that would allow the country to import cheap generic drugs when patented medicines are 鈥渦naffordable鈥� or when there is a 鈥渉ealth emergency鈥� such as AIDS. Pressure to drop the action has been building, with widespread international criticism of the drug manufacturers.

The South African government says it did not make behind-the-scenes deals in return for the withdrawal. Instead, it has reconfirmed its commitment to an international agreement on patent rights 鈥� an agreement it has never disputed.

The government has also agreed to consult the PMA when it drafts regulations for the contested law. But the government has not yet announced when it will start buying HIV treatment drugs for any of its 4.7 million infected citizens.

Living with the law

Mirryena Deeb, chief of the PMA, told New 杏吧原创 that this 鈥渘egotiated settlement鈥� allows the companies to 鈥渓ive with the law鈥�.

A conference organised by the World Health Organization and World Trade Organisation in Norway earlier in April gave the manufacturers confidence that withdrawing from the court case would not mean conceding patent rights, says Deeb.

鈥淚n the past, the WHO said that patents stood in the way of patients鈥� access to essential drugs. In Norway, we saw the World Health Organization saying intellectual property rights are essential for fostering research,鈥� she says.

Alan Chandler of GlaxoSmithKline says: 鈥淭he 39 companies brought the action because they felt their intellectual property was challenged. That has changed.鈥� Both the government and the drug manufacturers now appreciate each others鈥� concerns, Chandler says.

But Kevin Watkins of Oxfam says the PMA has made a 鈥渃omprehensive climbdown鈥�. Saul Walker of the UK鈥檚 National Aids Trust said: 鈥淭he companies have seen that the court case is a public relations disaster.鈥�

Former South African president Nelson Mandela had claimed the companies are exploiting dying people, and Medicins sans Frontieres presented the PMA with a petition, signed by 250,000 people, calling for the action to be dropped.

Patent protection

Drug manufacturers are thought to want an international agreement on the pricing of essential medicines. In the past year, several companies have struck deals with African nations to supply heavily discounted drugs.

At the workshop on pricing and financing of drugs in Norway, manufacturers argued in favour of a formal tiered pricing policy. A system of differential pricing would mean poorer countries would get what they want 鈥� cheaper drugs 鈥� while the companies get what they want 鈥� protection of patent rights.

Deals might also involve shorter patents in developing countries, or agreements that generic drug producers can gear up towards manufacture before a patent has expired.

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