Drugs giants sue to cut HIV lifeline
14 janvier 2001 (Observer)
LONDON, 14 January 2001 (Observer)
by Nick Mathiason
The might of the world’s drugs industry, including GlaxoSmithKline of the UK, is suing South Africa over alleged violation of intellectual property rights.
The action will reignite a furious row between African countries, where 25 million people are infected by the HIV virus. Only 25,000 of these have access to the drugs they need to stay alive.
In a case to be heard at the Pretoria High Court in March, companies will try to prevent South Africa from making or buying abroad huge quantities of cheap, generic drugs to treat patients.
Anti-HIV drugs from countries such as Thailand can cost as little as a tenth of the price of buying them from the multinationals. Drugs firms refuse to grant price cuts to developing countries until their health systems are deemed ’sophisticated’.
Whoever loses the case in South Africa won’t incur damages but will have to pay costs running into tens of millions of pounds. The action will tarnish recent progress made by African governments and the pharmaceuticals industry in relieving this massive health crisis.
South Africa fights Aids drug apartheid
Access to cut-price HIV pills would save millions of lives worldwide. Why do rich pharmaceutical firms refuse them, asks Nick Mathiason
Zackie Achmat a 38-year-old black South African, is probably the world’s most extraordinary drug smuggler.
As far as anyone can tell, he’s the only illegal importer of drugs who has ever voluntarily handed himself in, offered a video of himself clearing Customs and given over all receipts of his transactions to the authorities.
Last October, Achmat, who has the Aids-related virus, HIV, flew to Thailand and bought 5,000 pills to treat people dying of Aids. He then flew back to South Africa and handed his drugs over to his country’s government.
The drug was Biozole, an anti-fungal treatment whose patent is owned by pharmaceuticals giant Pfizer.
To buy a Pfizer pill over the counter in South Africa would cost about £9. In Thailand, Achmat scored the same generic drug for 15p.
In trade-law-speak, Achmat’s ’parallel importation’ of Biozole is a vivid symbol of a growing healthcare scandal of epic proportions. Aids is sweeping through Africa much like the Black Death plague that wiped out so much of medieval Europe. Eminent African doctors are now saying that HIV will do more harm to Africans than slavery did.
Of the world’s 34 million people infected with HIV, 25 million live in sub-Saharan Africa. Yet only 25,000 Africans (0.001 per cent of those infected) receive the drugs known as anti-retrovirals which prolong the lives of people with HIV and are freely available in the developed world.
Last week, Achmat was badly ill. Speaking in a whisper from his home, he said : ’Hundreds of people are dying every day in our country because they can’t get access to the right drugs. The only thing that is stopping them is the price. I think it’s immoral that people are dying just because they’re poor.’
Controlling the distribution of HIV drugs are some of the world’s most powerful pharmaceuticals companies which, combined, make profits running into tens of billions of pounds.
But in a move that will make Achmat’s ’crime’ seem utterly insignificant, the might of the world’s drug industry, including the UK’s GlaxoSmithKline, will, on 5 March, take the South African Government to court over alleged violation of intellectual property rights - essentially, the same principle that got Achmat into trouble.
The constitutional case, which has been rumbling since 1997, will be heard at the Pretoria High Court and could, if appeals are exercised, run for years. Whoever eventually loses will not face damages, but costs running into tens of millions of pounds.
At the heart of the case is a law passed by former President Nelson Mandela giving his country the right to buy huge amounts of generic drugs and sell them cheaply in South Africa. In addition, South Africa could compulsorily license HIV drugs and manufacture them within its borders, undercutting the multinational pharmaceuticals companies. The threat of legal action has so far prevented South Africa acting on this right.
Pharmaceuticals companies believe these measures represent a threat to their balance sheets although, at present, just 1 per cent of drug revenues come from the entire African continent.
But money lost through cheap generic could, drug firms say, be ploughed into more research and development which may ultimately lead to a cure for HIV.
Sanctioning cheap HIV drugs may also irritate hard- pressed health authorities in the western world, which spend up to 10 times more on their anti-retrovirals, and also alert the public as to the true - low - cost of medical drugs.
Furthermore, argue the drugs firms, it is no good farming out cheap pills to countries that don’t have robust health infrastructures. Drugs have to be monitored with scans and therapies. If that can’t be done, drugs are useless.
But African HIV campaigners argue that drug companies are putting their profits before the health of a whole region.
For the South African government, eager to play a leading role in the global economy, court action is the last thing it wants. South Africa is a fully paid up member of the World Trade Organisation and signed the Trade Related Aspects of Intellectual Property Rights (Trips) agreement, which forces national governments to respect the rights of patent holders. Within the South African government there are major tensions between the health and trade ministries.
’This country has no intention of perpetrating a wholesale violation of intellectual property rights,’ said Mark Heywood, head of the Aids Law Project at the University of Witwatersrand. ’It doesn’t want to be seen as the Mugabe of the South. But the South African government has a duty to provide care for its citizens, and this is why they passed this law.’
Even a leading pharmaceuticals analyst in the City last week said leading drug firms could afford to sanction cheap drugs tomorrow without it impacting on their balance sheets.
Preferring to remain anonymous, he said : ’It does depend on the amount of usages and the amount given away. These programmes would be phased so that it didn’t hit them that hard.’
This court case, which has paralysed HIV healthcare in South Africa, highlights the problems of the entire continent. Many African countries rely on the generosity of overseas governments and pharmaceuticals companies to subsidise HIV drug prices. So far, that aid has been sparing.
Throughout the Nineties, a series of high-level meetings with executives of leading pharmaceuticals companies and Western governments discussed dropping the prices of drugs. But the cost was deemed too high
High-profile offers of cheap Aids treatment from Clinton’s administration came with strings.
A £700m offer of cheap drugs from the United States last year turned out to be export-import loans, at commercial interest rates, to buy American drugs at market prices. This offer, not surprisingly, was turned down.
But progress is now discernible. Last May, five of the biggest drug companies agreed to begin talks with African nations to reduce the price of their drugs if countries agreed to health action plans drawn up by a leading business consultancy, McKinsey.
So far agreements have been reached with Uganda and Senegal. Others are set to follow. But rumours suggest that drug companies have sanctioned an increase in drug production to save thousands, rather than millions, of lives.
The British Government has done little to lobby for cheap drugs. Last November, Trade Minister Richard Caborn refused to sanction African nations circumventing Trips by citing ’national emergency’ - which they are within their rights to do.
’I don’t believe that this or related measures such as parallel importing are the answer here,’ Caborn wrote to Ben Jackson, director of London-based Action for Southern Africa (Actsa), last November.
Clare Short, the Minister for International Development, has no substantial initiatives planned in this area.
’Imagine witnessing devastating plague and sitting on a cure for fear of incurring shareholder revolt,’ said Ben Jackson of Actsa. ’That essentially is the position of drug companies. Sure healthcare infrastructures have to be in place but it is not an either-or argument. These things can be done simultaneously.’
Within a decade the number of people infected with HIV could reach more than 50 million, the equivalent of the population of France or the UK.
With the South African court case scheduled to begin in less than two months, the calls for pharmaceutical companies to move faster on dropping the prices of HIV drugs to developing countries are sure to get louder.
How Brazil took on the drugs giants - and is winning
In the early Nineties, Brazil faced a serious Aids crisis. The South American country had the fourth-largest number of reported cases of the disease in the world, with about 2.5 per cent of Brazilians infected - in other words more than 3 million people.
But their chances of surviving were increased by a government which undertook ’daring policies’ that went against the orthodoxies of international trade.
After years of military dictatorship and escalating foreign debt, the newly elected Brazilian democratic Government defined healthcare as a social right in 1988.
Three years later, Brazilian ministers decided to circumvent international trade agreements. They bought and distributed huge amounts of anti-retroviral drugs.
The desperate measure, which angered pharmaceuticals companies, paid off. Under pressure, the World Bank in 1994 sanctioned a £115 million loan to help pay for Brazil’s medical drug bill. This was topped up in 1999 by a similar amount, making Brazil the second largest recipient of overseas HIV-focused loans after India.
Brazil’s government used the loan to guarantee free HIV drugs to all who needed them, to train health professionals, to manufacture drugs and to develop infrastructure for free distribution and monitoring.
World Bank loans and Brazil’s government policies have contributed to a 38 per cent drop in the number of Aids-related deaths there since 1994. Throughout Brazil, there has been a reduction in hospital admissions, lengths of stay and the incidence of opportunistic infections.
These benefits come at a price. In 1999, government expenditure on access to treatment was £245m.
But overall Brazil has actually saved £291m in three years through fewer/shorter hospital stays, welfare payments and the continued economic activity of those with HIV.