Published on: The Financial Express, 7 April, 2001
By Pradeep S Mehta & Olivia Jensen
CUTS Centre for International Trade, Economics and Environment
A case currently being considered in South Africa has profound implications for consumers in India and worldwide. The South African government stands accused by 39 pharma companies of infringing WTO rules on intellectual property rights (IPR) and contravening its own Constitution by allowing AIDS patients to get cheaper medicines than they could under the patent regime.
The companies are objecting to a proposed amendment to the Medicines Act in 1997. The amendment would allow imports of generic life-saving AIDS drugs, known as ‘parallel imports’, and compulsory licensing of patented drugs. This would make the drugs available at a fraction of the cost that has been charged by MNCs.
The case, which opened in Pretoria few weeks ago, has been suspended until April 18 to allow pharmaceutical companies to prepare information about access to AIDS medicines. Drug are competing with each other to lower prices on AIDS drugs, but are sticking to their guns on the issue of patents. In a landmark statement, Bristol Myers Squibb, announced that it would supply drugs to target countries at below cost price in an effort to cut generic manufacturers of their patented medicines out of the market. They have pledged not to let patents stand in the way of access to the life-saving medicines. But governments are waiting to see whether the offer is genuine.
Global support for the South African government’s position has been strong. The case opened to worldwide demonstrations against pharma companies. They are seen as putting the sanctity of patents before the sanctity of life. International bodies have also come out in support. The World Health Organisation has also affirmed its support. The European Parliament has also passed an emergency resolution calling on the companies to drop the suit. Oxfam, the British charity, has been the most active in the campaign “Cut the cost”, launched on February 14.
Medicines sans Frontier, the French NGO, too has launched a signature campaign “Drop the Case”. It has entered into a contract with Cipla, the Indian drug manufacturer, to supply the AIDS drugs at a low price of $350a year, a fraction of the price being demanded by big MNCs. Cipla is manufacturing these drugs in India without violating the agreement, because India has not yet changed its patent regime to allow product patents, having already reverse engineered the process to make the AIDS ‘drug cocktail’
Price reductions are welcome to AIDS sufferers but disguise what is really at stake in this case: developing country right to protect the health of their citizens over the long term. WTO rules on IPRs, contained in the TRIPs agreement, allow countries to protect themselves from abusive practices by IP owners. Under the provisions, countries can uphold laws necessary to protect public health and nutrition and promote public interest in vital development sectors. The amendment opposed by the South African government falls within these provisions.
Developing countries cannot rely on occasional acts of generosity by pharma companies under pressure from public opinion. They should defend their rights, upheld by international agreements, to implement laws safeguarding access to medicines. The South African government deserves the full support of all right thinking people in the world.