The government has won its fight with pharmaceutical companies over parallel importation and other methods to reduce drug costs
Belinda Beresford
At the 13th hour the pharmaceutical industry backed down. The law it fought for three years to prevent being enacted will go ahead, unchanged.
And the ramifications go far beyond South Africa’s borders. By withdrawing their objections to South Africa’s legislation the drug companies have opened the way for other developing countries to enact similar laws.
The court case has also focused on the issue of patent rights, and highlighted the concerns of many NGOs and governments that international treaties and trade agreements are skewed towards the developed world. It has also graphically emphasised that major multinational industries can be affected by social pressures.
In was a complete climb-down on Thursday when the Pharmaceutical Manufacturers Association (PMA) and 39 of its members dropped their court action to have the Medical Schemes Control Amendment Act declared unconstitutional
As Judge Bernard Ngoepe turned to leave after dismissing the case, his courtroom erupted with the noise of victorious lawyers, government official and activists. Not to mention the thunder of the media pack hurdling benches and each other to get responses. Cameras, forbidden from the courtroom while it was in session, miraculously appeared to record the bloody nose for one of the most powerful industries in the world. Minister of Health Manto Tshablala-Msimang was given a fake gold victory statuette.
PMA executive Mirryena Deeb said: “The negotiated settlement which enabled the PMA and its members to withdraw the court case follows government’s commitment to adhere to its international obligations.”
The government has always argued that its legislation and intentions fulfilled international patent obligations.
The law that the PMA has now accepted is the same as the one signed by then president Nelson Mandela three years ago.
Tshablala-Msimang said: “We are pleased that the pharmaceutical industy has finally recognised both the legitimacy of our struggle … for affordable heatlth care, and the genuineness of our respect for the international trade treaties we are party to.
“It is a pity the pharmaceutical company could not be persuaded to take this view three years ago … The industry’s response at the time was to take us to court in a costly and ultimately fruitless exercise.”
The backdown came after late-night negotiations within the PMA and its members and was announced at the start of what was due to be the second day in court with the government. President Thabo Mbeki can promulgate the suspended Act as soon as he wishes.
Government had known that its opponents did not have the stomach for continuing this particular battle. In February, Mbeki was told by the secretary general of the United Nations, Koffi Annan, that five of the world’s biggest drug companies would like to find a way of settling the dispute out of court.
The issue had turned into a public relations disaster for the drug companies, especially when the activist group the Treatment Action Campaign (TAC) won the right to add its voice to the proceedings as a friend of the court.
Intellectual property protection ranks far down on the emotive scale and consequent shareholder activisim compared to the sight of thousands of people dying because the drugs to save them are too expensive.
The government’s confidence was obvious on Wednesday, when the court case was supposed to start. Department of Health Director General Ayanda Ntsaluba was smiling confidently as he waved towards the benches where the PMA’s lawyers would sit. “The ball is in their court. We will just wait,” he said. The government had drawn a line: it would not rewrite the disputed areas of the legislation.
Although the government had been in discussions with the pharmaceutical companies, it was the infighting within the PMA that was delaying the withdrawal of the case.
An extra legal team and spin doctors (some with British or transatlantic accents) had been hired by the drug companies to sort out the debacle. The decision to pull out had been made, it just remained to round up all parties and to decide who was going to pay the bills.
But even while the champagne (or a cheap generic, as one Oxfam representative joked) was being cracked in celebration, all sides were gathering themselves for fresh conflict.
In a sense the ending of the PMA’s court battle has simply removed the fight from one very symbolic battle, and opened up a variety of legal and political fronts.
The government, even while it was basking in the joy of victory, and magnanimously praising the pharmaceutical industry for its grace, integrity and dignity, was aware that now the ball is very firmly in its court.
It now has the tools it has claimed it needed to implement major improvements in the health care system, especially for people living with HIV/Aids. Now the world will see whether there is any truth in the pharmaceutical company arguments that high prices have simply been an excuse for lack of action by a government that in reality lacked the capacity or political will.
The trade-off for the pharmaceutical industry was that it would be invited to provide input into the regulations that are needed to implement some of the provisions of the Act. Draft regulations have already been drawn up by the goverement.
The drug companies say the ending of the court action will not affect the offers for free and reduced drugs that they have made to developing countries and that they intend to work more closely with government and civil society to help the poor get access to medicines.
The TAC, which has spearheaded most of the public awareness of the court case and the issue of access to essential medicines first at home and then tying into international aid agencies, sees this as another area where the fight will continue.
TAC chair Zackie Achmat said: “Every South African can be proud we stood firm against the most powerful lobby in the world, the drug companies. But now another struggle begins.”