As southern Africa reels under the endless, and often meaningless, statistics about disease, and especially HIV/AIDS, investigators and the courts are beginning to untangle a story about how the world’s four largest pharmaceutical companies act in a cartel with the active support of the World Trade Organization and the U.S. government to deny cheap generic drugs to the poor countries of the world.

It is a story about life, death and profit. It involves some of the poorest countries in the world and some of the richest corporations. It goes to the heart of how the modern world is to be organized and whether the institutions set up to police the global economy are up to the job.

What few  people realize is  that pharmaceutical companies, the big four in particular, with their enormous squeaky clean laboratories, their huge research budgets, their mammoth marketing techniques portraying them as the keepers of the world’s health and their truly unimaginable profits have the power of life and death over large  sections of the world’s populations.

This year 11 million people in poor countries will die from infectious disease. Nearly a quarter — 2.6 million — from HIV/AIDS. By the time you finish reading this story 100 people will have died, half will be children under five.

We know all these figures. We read them every day especially in Botswana, South Africa, Swaziland, Zimbabwe, Namibia and Zambia, which now have the largest pandemics in the world. Our billboards and television advertising extol the virtues of condoms. AIDS awareness campaigns are in the budget of virtually all the foreign NGOs. With all this “awareness” why are our most productive people dying in such large numbers at such early ages?

President Thabo Mbeki of South Africa was castigated by the world AIDS establishment because he dared suggest that poverty was a critical factor in the pandemic sweeping his and neighbouring countries. But, we know that poverty breeds poor health and encourages the spread of infections and that two-thirds of the world is awash with poor countries. Just as a starving person knows there is food at a five star hotel, governments in Africa, Asia and Latin America know there are medicines to treat the infections if only they could afford them.

And some bigger developing countries have found a way around that by making cheap copies of Western drugs. India makes 70 percent of its own drugs, while Egypt, Brazil, Thailand and Argentina have taken major steps to become more self-reliant in pharmaceuticals. Poorer countries also benefit, because they can import cheap generic drugs even if they cannot manufacture them.

What a simple solution to the enormous problems of the treatment of infectious diseases. More people can be treated because the drugs are so much cheaper. Developing countries can get into industries with a higher technological component and increased competition will force down prices.

But the story doesn’t go that way because Glaxco SmithKline, Merck, Pfizer and Eli Lilly — the big four, and there are others in Europe and the U.S. almost as big — wield such enormous financial and political clout. It is a cartel and like all cartels they want monopoly power — it is a basic economic tenet that monopolies lead to higher prices which is why many governments try to break them up.

The Big Four do not like the idea of cheap drugs coming into the market from Egypt or India for sale in poor countries because, of course, more competition means lower profits for shareholders.

Never mind that across Africa and the developing world millions more will die of diseases that are treatable in the West, such as diarrhea, meningitis, tuberculosis, malaria and AIDS. The health systems do what they can, but it is like giving a sticking plaster on a hemorrhage. The Western drugs they need are unavailable because they are unaffordable. Life is priced too high.

In Pretoria, a critical battle is beginning in the South African high court in an action brought by 42 pharmaceutical companies including the big four against the South African government. The case is an attempt to block South Africa from importing the cheap generic medicines from developing countries. Estimates are that the companies have spent three years and millions of American dollars preparing their case. They have retained almost every patent lawyer in the country and on 5 March their barristers will try to stop the South African government from buying the medicines its people so badly need from the countries where the prices are lowest on the grounds that it infringes world trade agreements. This in an age of globalization and free markets!

The rest of the SADC region and continent will be closely watching this case, as will the rest of the developing world. As the disease toll rises inexorably, there is a growing tide of outrage among local activists and international organizations that see medicines denied to the sick in the name of commerce.

There are more than 32 million men, women and children infected by HIV in developing countries.  AZT and 3TC, the basic retroviral drugs used in the West, would keep these 32 million people alive and well, but the price tag is $15,000 (U.S.) per patient per year. The poor in many African countries barely exist on $1 (U.S.) -a-day and average annual family incomes are well below $1,000 (U.S.)-a-year in many African nations.

But the cheap alternatives, the generic drugs from Thailand and the other countries are just as effective, exactly the same as AZT and 3TC. Brazil claims it could make AZT for $200 (U.S.)  per patient per year and it is a price South Africa might be able to pay, perhaps even begin to develop themselves and share among its even poorer neighbours at a manageable cost.

The drug company’s response has been to launch the Pretoria court case, afraid of the worldwide consequences if their prices start to be undercut. The Pharmaceutical Manufacturers Association of South Africa, which is bringing the case with the Big Four, says it supports the right to buy supplies of drugs that are cheaper abroad “in exceptional circumstances” but it argues that the Medicines Act of 1997 give the health minister “unfettered discretion to override patient rights for medicines in this country.” It was “utterly appalled” when South Africa told the World Health Organization meeting in early 1999 that its new legislation should provide a model for the rest of the region and continent.

Volunteer doctors have gone even further. In Khayelitsha, a shantytown near Cape Town’s airport, they are pioneering  the use of nevaprin, the drug that stops pregnant women from transmitting HIV to their babies. Now the government is rolling out the programme to the whole country.

South Africa could now be in the same relatively advantageous position as Brazil, says Dr. Eric Goemaere, Head of  Doctors Without Borders (MSF) in South Africa, by making and importing cheap generic drugs. There is a political willingness but now the March 5 Pretoria court case has put an end to all that for the time being.

Back at the British, Swiss, American and German headquarters of the Big Four they claim “patent protection” for a minimum of 20 years on their intellectual property which means no generic manufacture. But they made a deal called TRIPS (the Trade Related Intellectual Property Rights) which includes pharmaceuticals and biotechnology as part of the global trade regime administered by the unselected WTO who decided on peoples’ lives much as they did on bananas and the burden of proof is always on the defendant country, like South Africa.

The two loopholes exist in TRIPS under a clause called a national emergency and AIDS is surely that — manufacture cheap drugs as in Brazil, Egypt, Thailand and Argentina or import them as in South Africa. It sounds fairly easy except that under the massively funded drug lobby, the U.S. is using every available means to close these two loopholes.

Armies of lawyers are examining the TRIPS deal and 21st century gunboat diplomacy is at work. For example, countries which export certain products like textiles to the U.S. under special deals will lose this privilege over pharmaceutical, manufacture and export. India and Brazil have been warned they face trade sanctions.

But the drug companies, who spend far more on public relations than research don’t like their pristine image as good corporate citizens besmirched. They argue that patent protection is needed if their companies are to plough back vast sums into developing drugs to cure third world diseases.

They also argue that poorer countries cannot even afford the vastly cheaper generic drugs. And they say they “donate” drugs.

Their arguments according to analyst Larry Elliott, writing in The Guardian Weekly, do not add up. Profit margins of the Big Four were fat before TRIPS. Second, research and development are dwarfed by the money spent on marketing drugs — free trips first class for doctors, cruises, samples, massive public relations campaigns, huge funding for research grants if the right results come back.

Most devastating is the revelation, according to Elliott, that only 10 percent of research goes into developing drugs that account for 90 percent of global diseases, the bulk are spent on treating first world lifestyle diseases such as obesity. Finally, the drugs made available at lower prices or  “donated” are limited in supply, more expensive than generic drugs and often out-of-date. Brazil, a relatively poor country can make AZT itself, reducing the treatment cost to $4,000 (U.S.) a year and 90,000 Brazilians receive the treatment free. Despite threats, Brazil is standing  up to the bullyboys.

The WTO is nervous since the riots in Seattle placed it and other global institutions under close scrutiny and attack, the main charge that they put profits before people and environment.  If the WTO backs the case brought by the U.S. in support of the big drug companies, the case of the protestors will be proved.

If they fail to back Brazil, Argentina, Egypt and Thailand, they will have the blood of the third world on their hands. The WTO is not a law unto itself. Governments have to write the rules, not multinational corporations. And if the countries of southern Africa say there is a health emergency that is national and regional, it is the Big Four that must prove there is no emergency.

“It was once said that all that is needed for the triumph of evil is for good people to do nothing. And what is happening here is evil. I have tried to think of another word for it. But there isn’t one,” Elliott says.  (SARDC)