Industry sues over cut-price Aids drugs
The world's drug indurstry will take the South African Government to court on March 5 over the uncontrolled importation and manufacture of cut-price versions of patented Aids drugs.
To give an example, buying a Biozole, a key anti-fungal treatment made by Pfizer, over the counter in South Africa would cost about US$13 (HK$100). In Thailand, a generic version of the same drug costs 22 US cents.
Of the world's 34 million people infected with HIV, 25 million live in southern Africa. Yet only 25,000 Africans, 0.1 per cent of those infected, receive the drugs known as anti-retrovirals, which prolong life for people with HIV and are freely available in the developed world.
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 face not just damages, but costs running into tens of millions of dollars.
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 pharmaceutical companies. The threat of legal action has so far prevented South Africa acting on this right.
Pharmaceutical companies believe these measeures represent a threat to their balance sheets although, at present, just one per cent of drug revenues come from the entire African continent.
But money lost through cheap generic durgs could, firms say, be ploughed into more research and development to find a cure.
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 to the true low cost of medical drugs.
Furthermore, argue the drugs firms, it is no good farming out cheap pills to countries that do not have robust health infrastructures. Drugs have to be monitored with scans and therapies. If that cannot be done, they are useless.
But African HIV campaigners argue that drug companies are putting their profits before the health of a whole region.
For the 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.
A leading pharmaceuticals analyst in the City of London last week said leading drug firms could afford to sanction cheap drugs tomorrow without it hurting 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."
Within a decde, 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 Africa 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.
The desperation of the Aids crisis in South Africa, which 10 per cent of people are infected with HIV, has been highlighted by the plight of an 11-year-old boy dying from disease.
Xolani Nkosi was the orphan of Nonthlanthla Nkosi, a hair-dresser who died in April 1997. He became famous in his country by speaking at an Aids conference in Durban last July, but will die soon at his home in Johannesburg's northern suburbs, having had only a short spell on anti-retrovirals. Yet the endless stream of politicians and celebrities who went to his bedside last week is proof that he managed to shame South Africa's decision-makers out of their state of collective denial over Aids.