Trial Over South Africa’s Generic Drug Importation Act Postponed Until April 18
The trial between the world's pharmaceutical companies and the South African government over a law that would allow the country to acquire cheaper anti-AIDS drugs has been postponed until April 18, Reuters/New York Times reports. Judge Bernard Ngoepe today granted the South African AIDS group Treatment Action Campaign its request to become part of the case as a friend of the court. Ngoepe issued the delay to allow the Pharmaceutical Manufacturers Association of South Africa -- the umbrella organization representing the 39 drug firms listed as plaintiffs in the suit -- time to "respond" to TAC's inclusion in the case. TAC is expected to submit evidence pertaining to pharmaceutical pricing across different markets, as well as "graphic" testimony of "the misery caused by HIV/AIDS in the developing world" (Reuters/New York Times, 3/6). The drug firms are contesting South Africa's 1997 Medicines and Related Substances Act, which would enable South Africa to obtain AIDS drugs at reduced prices through parallel importing and compulsory licensing. Parallel importing involves the purchasing of drugs from the "cheapest sources available" without the manufacturer's permission, and compulsory licensing allows the government, after declaring a national health emergency, to license local companies to manufacture cheaper, generic version of drugs whose patents are held by multinational companies (Kaiser Daily HIV/AIDS Report, 3/2). The Wall Street Journal reports that lawyers for the pharmaceutical industry yesterday spent "most of the early part of the hearing" arguing against TAC's inclusion in the case. Stephanus Cilliers, an attorney for the drug firms, said that the group "would add nothing to the government's case," but Ngoepe said that he believed the organization "would add an important dimension" to the case (Wall Street Journal, 3/6). Charity and relief organizations and AIDS groups "welcomed" Ngoepe's decision to include TAC in the case. The trial is expected to resume on April 18 and continue until April 26, according to a PMA spokesperson (Reuters/New York Times, 3/6).
Drug Industry Takes the Floor
Meanwhile, during the first day of the trial yesterday lawyers from the pharmaceutical industry presented their arguments against the act. Cilliers stated that the lawsuit "isn't being brought to prevent South Africa from seeking inexpensive versions of the drug companies' medicine," but instead seeks to "oppose sweeping 'unconstitutional' powers the law would give South Africa's health ministry" (Block, Wall Street Journal, 3/6). Lawyers for the pharmaceutical industry said yesterday that the suit ultimately aims to determine whether South Africa is required to follow international laws regarding intellectual property rights. "We are really dealing with the question of conferring upon a government minister the power to make things that are illegal legal. There can be no question ... that our rights are threatened," Cilliers said (Jeter, Washington Post, 3/6). Industry lawyers argued that the 1997 law "concentrates too much authority in the government's executive" branch to act without judicial review. They added that South Africa "already has the right to prove a case of patent abuse" in the courts, but that the law "goes much further by allowing the government to purchase or manufacture generic drugs by order of the health minister." The drug firms also criticized the South African government for making the drug industry a "scapegoat" for the government's "inability to confront the AIDS epidemic," adding that the country had "spurned" industry efforts to negotiate discounted prices for anti-AIDS drugs. Mirryena Deeb, head of PMA of South Africa, said, "The government has put up X amount of red herrings or excuses about why it has been unable to combat the AIDS crisis" (Maykuth, Philadelphia Inquirer, 3/6). Deeb stated that the drug firms' "big worry," and what they are contesting in the case, is the possibility that the South African law would allow the country's government to purchase non-patented generic medicines for any purpose. She said, "What the government is trying to secure and by this legislation is to say that in the event that they can't get a good price in South Africa, they would be allowed to be free to ignore patents and bring in a drug from elsewhere in the world. We are arguing that what they are seeking to do is to allow unauthorized copies from anywhere in the world. It is possible that this act can be applied in a total arbitrary way without any transparency and without any recourse to due process. And that's what we are challenging, the rule of law" (NPR, "All Things Considered," 3/6).
The South African government, meanwhile, hopes to end the case quickly while "assur[ing] foreign companies that it respects intellectual property" rights, the Wall Street Journal reports. Health Minister Dr. Manto Tshabalala-Msimang and other government officials stressed that the South African government does not want to use the law to manufacture "pirate" drugs. "What we have been talking about is only importing legitimate medicine more cheaply from lawful suppliers in other countries," a health minister aide said (Wall Street Journal, 3/6). Health Director-General Dr. Ayandra Ntsaluba said that the government is already obeying international law and that the pharmaceutical companies have nothing to contest, adding, "We believe we operate within international laws and frameworks, which are by the way putting developing countries at a disadvantage." Ntsaluba dismissed the industry's arguments that allowing cheaper anti-AIDS drugs would discourage research and development by stating that governments and universities already fund some of the research for medicines. WOZA reports that a 1999 analysis of the top 12 U.S. drug manufacturers showed that the average percentage of revenue devoted to research and development was 12.4%, compared to 34.5% dedicated to marketing and administrative costs. Ntsaluba said that if the government wins the case, it will "speed up the publication of regulations" and the provisions of the Medicines Act will "kick in as soon as possible." But if the government should lose the case, Ntsaluba said he hopes that the "areas of problems in interpretation [of the act] are clearly pointed out so we can correct them" (Harvey, WOZA, 3/5).
Case for the Courts?
Ngoepe yesterday questioned whether the industry's case even belonged in the courts and whether the judicial system had jurisdiction over the issue. Ngoepe asked industry lawyers whether a law that "was never put into effect and hence has had no chance to cause harm" could be contested in court. "Courts cannot enforce those acts until they are in operation. It may very well be they are still in the kingdom of the legislature or the executive," Ngoepe said. Ngoepe also expressed "doubts" over some of the pharmaceutical companies' arguments. Deeb said that such "scrutiny" is "to be expected," and representatives from the industry and the South African government said that the government will likely face the same treatment later in the week when it presents its case (Cauvin, New York Times, 3/6).
Day of Action
AIDS activists were out in full force in South Africa and other countries around the world to express their support for the South African government in the case. Zackie Achmat, chair of TAC, said, "This is huge not just for the people living with AIDS in South Africa and sub-Saharan Africa, but also Asia and Latin America, where the disease is flirting with epidemic levels. This is literally a matter of life and death to some, and more profits for others" (Washington Post, 3/6). "Thousands" of demonstrators in Pretoria, where the trial is being held, marched outside the High Court and the U.S. Embassy. Protesters carried signs depicting John Kearney, CEO of GlaxoSmithKline South Africa, as an "AIDS profiteer" and "deadlier than the virus." Similar protests were held in Cape Town and Durban (New York Times, 3/6). Outside the U.S. Embassy in Pretoria, Congress of South African Trade Unions General-Secretary Zwelinzima Vavi said, "The system of capitalism is once again exposing itself as a brutal, inhuman, antidevelopment, extremely greedy and selfish system ever to be designed by the human kind. ... The challenge by the Pharmaceutical Manufacturers Association against the Medicines and Related Substances Control Amendment Act is not only a callous act but also shows how easy it is to turn humans against fellow humans by not just keeping others poor but by taking steps to prevent them from accessing medicines they can afford in order to save their lives." Vavi called on the drug firms to withdraw their lawsuit, asked the U.S. government to withdraw its complaint against Brazil and urged the South African government to "double its efforts" in fighting HIV/AIDS in the country (Vavi speech text, AllAfrica, 3/5). In New York City, 200 activists marched outside the New York headquarters of Bristol-Myers Squibb and GlaxoSmithKline (Wall Street Journal, 3/6). Members of ACT UP picketed at GlaxoSmithKline headquarters in Philadelphia as well. These protests, as well as others held in Australia, Brazil, Canada, France, Germany, Italy, the Philippines, Thailand and the United Kingdom, were part of TAC's "International Day of Action" held yesterday (Philadelphia Inquirer, 3/6).