South Africa AIDS Drug Settlement May Not Signify Immediate Influx of Drugs

South Africa's Health Minister Manto Tshabalala-Msimang "dropped a bombshell" yesterday when she announced that the government had "no immediate plans to use the landmark legal victory" to obtain antiretroviral drugs, the Wall Street Journal reports. The Pharmaceutical Manufacturers Association of South Africa and 39 pharmaceutical companies yesterday agreed to drop their lawsuit against the South African government over a law that would allow the country to import and manufacture cheaper generic AIDS drugs. But speaking before a "packed" conference room, the health minister said, "We never said we want to use antiretrovirals. But we have to place our options on the table to see what we will use." Tshabalala-Msimang added that the drugs are "still too expensive, too dangerous and too difficult to manage for the government to incorporate them into its AIDS-fighting plans." She said that the government would instead focus on "nutrition programs and better treatment of infections." Following the health minister's statement, Zackie Achmat, chair of the South African Treatment Action Campaign, said that activists would "work to persuade the government to change its position on antiretroviral drugs." The Journal notes that the case over the South African law was "technically about patent rights, not AIDS medication per se." However, the issue of AIDS drugs was brought to the forefront as AIDS activists used the high cost of antiretrovirals as a "symbol of barriers preventing poor Africans from getting treatment" (Block, Wall Street Journal, 4/20). The Guardian added that "large numbers of people ... regarded the court battle as primarily a struggle for drugs to combat the pandemic" (McGreal, Guardian, 4/20).

Government, Pricing Not the Only Problems
The government's attitude toward AIDS drugs is not the only obstacle to obtaining treatment for South Africa's 4.7 million HIV-positive patients. The Los Angeles Times reports that many state hospitals "lack equipment and medicine to treat even basic illnesses," that there is a shortage of doctors and nurses and that "poor roads and communications hamper access to medical facilities in rural areas." In order to make effective use of antiretrovirals, officials estimate that South Africa needs to invest "at least" $1.25 billion over the next 10 years to bolster its health care infrastructure (Simmons, Los Angeles Times, 4/20). The New York Times reports that "the most sweeping aspects of the South African law will not take effect for several months and it seems unlikely that they will dramatically improve access to AIDS drugs in [the] country." Even cheaper generic AIDS drugs sold outside of South Africa are "still too expensive" for most of the country's residents (Swarns, New York Times, 4/20). Achmat said, "We have won the first round, but there is a lot ahead that we have to do. We need a much firmer commitment and political commitment from our government." And John Kearney, general manager of the South African division of GlaxoSmithKline, said, "I feel genuine sadness for those who perhaps believed that the pricing of antiretrovirals was the only barrier (to treatment) and that that barrier would come down as a result of this court case. If people's hopes have been raised prematurely by that then that's a great shame" (Nessman, Associated Press, 4/19). In a statement issued by a spokesperson, U.N. Secretary-General Kofi Annan said that "[h]e hopes that [the outcome] ... presages a new era of cooperation between governments and the private sector in the struggle for better health care throughout the developing world," adding that the "credit for this positive outcome goes to the wisdom and perseverance of the parties concerned, and to the constructive intervention of Presient Thabo Mbeki" (U.N. release, 4/20). However, South Africa's Business Day reported that "Government may have won a glorious battle ... but Pretoria risks losing the war unless Health Minister Manto Tshabalala-Msimang takes a more enlightened and sophisticated approach" to dealing with HIV/AIDS (Agence France-Presse, 4/20). James Love, director of the Consumer Project on Technology, agreed, adding that South Africa must be willing to "make the tough choices that it's been reluctant to make in the past, the really hard decisions that might not sit well with investors, but just might save lives" (Jeter, Washington Post, 4/20).

Global Implications
While the case settlement may not spur an immediate flood of antiretrovirals into South Africa, it may serve to "embolden people in developing countries around the world to stand up for medicines that are affordable," TAC's Mark Heywood said (AP/Richmond Times-Dispatch, 4/20). Oxfam, Medecins Sans Frontieres and TAC said in a joint statement, "The outcome of the case signals a dramatic shift in the balance of power between developing states and drug companies." BBC News reports that the settlement "could become a blueprint for future relations between pharmaceutical companies and governments in the developing world" (BBC News, 4/19). In particular, the case may bode well for Brazil, India and Thailand -- three countries currently manufacturing generic AIDS drugs. In Thailand, for example, AIDS patients and activists are planning a legal challenge to "the validity of a Bristol-Myers Squibb patent on an AIDS drug." And Brazil, which already permits generic production of some HIV drugs, has also "threatened" to grant licenses to local companies on patents on AIDS drugs held by Merck & Co. and Hoffman-La Roche (Pollack, New York Times, 4/20). I.S. Gilada, one of India's "most prominent AIDS experts," described the settlement as a "'major triumph' for all developing countries and said it would throw the doors open to a market worth a fortune for Indian companies," Agence France-Presse reports. Indian drug firms involved in manufacturing generic drugs include Cipla, Zydus Cadila, Aurobindo, Sun Pharmaceuticals and "two to three smaller firms," Gilada said. In addition, several new Indian companies are expected to enter the generics market. Mukhu Hamied, joint managing director of Cipla, predicted that international AIDS drug prices "will come down to a tenth of what they are now." He added, "This is a terrific victory and opportunity for South African citizens. They will be able to get generic drugs from generic drug suppliers at affordable prices." Cipla is currently involved in "direct talks" with governments of "several" African countries regarding the sale of its triple drug "cocktail." Hamied said, "We expect to reach an agreement with the Nigerian government by the end of this month. We are also talking to the government of Cameroon. Our registration process is on in countries such as Laos [and] Thailand" (Mukherji, Agence France-Presse, 4/20).

Generic Drug Quandary
On a broader level, the settlement "threaten[s] moves toward more globalization," the New York Times reports. Eight years after most nations approved the Trade-Related Aspects of Intellectual Property Rights agreement, which "commits [countries] to enforce drug patents," the agreement is "coming home to roost," Jim Keon, president of a trade group representing generic drug companies in Canada, said. The Times suggests that pharmaceutical companies are now offering reduced-cost drugs in developing countries to help protect their patents and stave off manufacture of cheaper generic drugs. But AIDS activists maintain that "it is better to rely on competition from generic manufacturers than on voluntary actions by big drug companies." However, the Times notes that even if developing countries are given the leeway to manufacture their own generic versions of patented drugs, "it is not clear if African countries have the scientific expertise for a research-oriented drug industry" (Pollack, New York Times, 4/20).

Media Coverage
NPR's "All Things Considered" yesterday reported on the case settlement and the pharmaceutical companies' public relations "headache." To listen to the reports, go to http://search.npr.org/cf/cmn/cmnpd01fm.cfm?PrgDate=04/19/2001&PrgID=2. To listen to NPR's "Morning Edition" report that will be available approximately three hours after the West Coast show ends, go to http://search.npr.org/cf/cmn/cmnpd01fm.cfm?PrgDate=04/20/2001&PrgID=3 and scroll down to "AIDS-drug Settlement." And to view a South African Broadcasting Corporation news clip, enter http://www.sabcnews.co.za/SABCnews/video_ram/0,1573,3747,00.ram into your Web browser. Note: You must have RealPlayer to listen to these clips.