Important note: Information in this article was accurate in 2001. The state of the art may have changed since the publication date.

Reuters NewMedia - April 19, 2001
Steven Swindells

The decision by 39 drug firms to drop the landmark court case was hailed as a major victory for the world's poorest countries in their efforts to import cheaper drugs to combat an epidemic that affects more than 25 million Africans alone.

"The outcome of the case signals a dramatic shift in the balance of power between developing states and drug companies," Oxfam, Medecins Sans Frontieres and the South African Treatment Action Campaign said in a joint statement.

"It sends a clear signal to the African heads of state that lives should and can take precedence over patents," they said.

The crux of the South African case was its right to buy or produce cheap generic drugs.

The drug companies have negotiated deals with individual countries to slash the price of triple drug combination therapy which costs about $10,000 a year in the United States to about $1,000. But the same drugs can be bought from generic producers for as little as $300.

The deal between the drug firms and Pretoria was brokered this week during talks between U.N. Secretary-General Kofi Annan and South African President Thabo Mbeki, drug company and government officials said.

Oxfam senior policy adviser Kevin Watkins said the industry was forced to withdraw to limit the public relations disaster caused by the attempt to enforce First-World prices in Third-World economies.

"The drug industry is throwing the towel into the middle of the ring.

"This case should never have happened. We have lost three years in the fight against AIDS, but it is a great victory for the people of South Africa and for the global campaign to make drugs more affordable," he said.

The collapse of the South African court case over importing cheap AIDS drugs could spark changes in international trade laws that will improve access to medicines in poor countries, aid groups predicted Thursday.

Justin Forsyth, Oxfam policy director told Reuters: "On the global level it may be the beginning of a much bigger change for cheaper medicines being available to poor people."

ACTIVISTS REJOICE

Outside the court, black and white demonstrators, many of them already ill with the Acquired Immune Deficiency Syndrome (AIDS) or carrying the Human Immunodeficiency Virus (HIV) that causes it, danced and cheered when they heard the news that may get drugs to the country's 4.7 million people living with AIDS.

Zackie Achmat, another HIV sufferer and head of the Treatment Action Campaign (TAC), said the case epitomized the biblical fight of David and Goliath.

"This is a real triumph of David over Goliath, not only for us here in South Africa, but for people in many other developing countries who are struggling for access to healthcare," he said.

South African Health Minister Manto Tshabalala-Msimang threw her arms in the air and then hugged her senior officials before cracking open bottles of champagne.

"This is a victory not just for South Africa, but for Africa and the whole developing world," she said.

The World Health Organization also welcomed the deal, saying it would allow Pretoria and the drug firms to made progress on generic drug substitution and greater competition in state drug procurement programs.

The International Aids Society, which represents mainly medical doctors and researchers, also welcomed the court move.

"The public opinion storm against international pharmaceuticals companies had brought the spotlight on the AIDS catastrophe in Africa," Lars Olof Kallings, Secretary General of the society told the Swedish TT news agency.

DRUG FIRMS CLAIM VICTORY FOR BOTH SIDES

GlaxoSmithKline, the world's top supplier of HIV-AIDS drugs, said the settlement cleared the way for cheap drug imports was a victory to both sides.

Chief Executive Jean-Pierre Garnier dismissed suggestions that the industry's decision was a defeat, but he conceded there were concerns that cut-price drugs may flow back to North America, Europe and Japan, eroding profit margins.

"Clearly this is a worry and we have said that we need to be vigilant," Garnier told Reuters in an interview.

GlaxoSmithKline's South African head John Kearney said that the ball was now firmly in South Africa's court to deliver AIDS drugs to its people.

The pharmaceutical industry's international body welcomed the agreement clearing the way for the import of cheaper drugs, saying it is a "major victory for patients."

South Africa reaffirmed in the accord its commitment to international obligations including the TRIPS agreement, that it would only use compulsory licensing under extreme circumstances and said it would consult drug makers and the public on implementing drug-related laws.

South Africa also agreed to consult the industry on a 1997 law allowing for so-called parallel imports of patented drugs and the generic substitution of key medicines.
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