In a humiliating back down, 39 of the world’s pharmaceutical companies dropped  their lawsuits against South Africa, which will allow Pretoria to buy anti-AIDS medicines at generic drug prices.

  And the ramifications go far beyond South Africa’s borders and the cheap treatments needed for people with HIV/AIDS. By withdrawing their objections to South African legislation in the face of enormous international pressures and adverse publicity, the way is now open for other developing countries to enact similar laws.

  The case has also focused on the issue of patent rights and highlighted the concerns of many NGOs, churches and governments that international trade agreements are seriously skewed in favour of the developed world.

  One of the most serious myths exploded by the dismissal of the case and a matter of great importance in the future, is that major transnational corporations are impervious to unified social pressure even when governments are themselves afraid to respond to people’s demands because of the sanctions which can be imposed unilaterally or by the World Trade Organization (WTO).

  Not only has South Africa scored a major victory in the struggle against its burgeoning HIV/AIDS pandemic, but the powerful and secretive pharmaceutical industry, in an effort to counteract their bad publicity, has struck a deal with the European Union that will allow millions more people each year to be saved from death from preventable diseases such as tuberculosis, pneumonia and malaria which kill 10 million people-a-year.

This plan involves a sliding scale of prices, ranging from cost prices to the world’s poorest countries, many of them in Africa, to large discounts for middle income countries in Latin America and Asia.

  When the withdrawal of the court action by the Pharmaceutical Manufacturers Association (PMA) was announced in late April, the Pretoria courtroom erupted as lawyers, government officials and activists cheered the decision to withdraw the action to have the Medical Schemes Control Amendment Act declared unconstitutional.

  Even while South Africa was elated by the dismissal, it was well aware that the health issue is squarely in their jurisdiction because the government now has the tools to implement major improvements in the health care system, especially for people living with HIV/AIDS.

  South Africa will be able to shop around for generic anti-retroviral drugs especially in Thailand, India and Brazil where they are available at much lower prices but the unanswered question is when will the drugs become available?

  In a country where more than 5,000 people are dying every week of AIDS-related illnesses, the government has said the cheaper drugs would not become immediately available despite the legal victory.

  This statement has upset the activists who campaigned so hard at home and abroad against the PMA.

  “When the pharmaceutical companies dropped the case, many people with HIV/AIDS hoped they would be able to get these drugs tomorrow,” said Dr. Sam Kobia of Kenya, one of the African campaigners. “That appears not to be the case. Nevertheless, we would like the government of South Africa to prove to the world that they are so concerned about the lives of people that they would be willing to buy these medicines in India or Brazil where in fact the drugs can be produced at a much cheaper rate.”

Activists are also calling on South Africa, the biggest economy on the continent, to buy the medicines quickly and extend the generic drugs beyond their own borders in southern Africa at affordable prices.

  “We hope South Africa will extend the access to these drugs to their neighbours to make it possible for them to obtain the same drugs,” said a spokesperson for Christian Aid, an international agency which had campaigned against the drug companies.

  The drug industry says ending the court action will not affect their offers for the free and reduced drugs they have offered developing countries and that they intend to work more closely with governments and civil society to help the poor get access to medicines.

  But access is a battle yet to be won. The Treatment Action Campaign (TAC) which co-ordinated much of the awareness campaign around the court case, says that fight, first at home and in southern Africa, and then tying into international aid agencies will continue.

  Activists point out that as long ago as l928 when penicillin, the first modern wonder drug, was invented it was never patented because it was considered such a great benefit to the whole world that no one should have a monopoly on its manufacture.

  Today’s drugs industry takes a diametrically opposite view claiming that protection of intellectual property takes precedence, even if it means that poor countries in Africa cannot manufacture or buy cheap copies of drugs they urgently need.

  However, trying desperately to find a way out of the public relations disaster that occurred in South Africa, the industry argued that the price of anti-retroviral drugs was not the issue, the real problem was the poor state of health systems in the developing world. To avoid turning their business to countries like India and Brazil, the big European and American drug companies have offered to slash their prices to African governments for their patented AIDS treatments.

This tiered system may be part of the answer but campaigners argue that the bigger issue is that poor countries must be allowed to use safety provisions already existing in WTO rules that allow patent rights to be overruled in the public interest.

  But heavy lobbying, especially from the U.S., has made this rule difficult to impose. African health ministries regularly receive letters from the U.S. government warning that trade privileges will be suspended if the country imports generic copies of patented drugs.

  The pharmaceutical companies argue they need high profits for research and development of new remedies and without patents, generic companies would rip off their inventions and they would be unable to recoup their investment.

  Until the WTO came into being in 1995 few poor countries had intellectual property laws that allowed countries like Egypt, Brazil and India to develop thriving generic drugs industries which then did not seem to threaten the big pharmaceutical companies which is one of the developed world’s most profitable industries, next to arms.

  Under WTO rules, however, intellectual property rights extend drug patents for 20 years and all 140-member countries must conform.

  While even the campaigners agree some patent protection is necessary, they insist drugs companies cannot profit on the backs of the poor and the sick.

  The cost of manufacturing most drugs is relatively small, and even research and development is not the biggest bill the pharmaceutical industries must bear. The large costs are in promotion, marketing and perks to doctors to prescribe the drug of choice.

A big factor in the industry’s rash of one-off offers on AIDS drugs to African countries was a decision by an Indian company, Cipla, to cut its main AIDS drug costs to $600-a-year per patient when the big companies were charging $10,000 for the same treatment.

The brutal facts are however, as Kobia suggested, that even the generic drugs are too expensive for poverty-stricken public health systems. The countries are simply too poor to buy the new remedies. The combined purchasing power of South Asia and sub-Saharan Africa’s health budgets is equal to the market for around 15 million Americans who suffer from lifestyle-induced heart failure and angina, Christian Aid says.

  Pharmaceutical companies know these tough facts and spend their research and development budgets on more lucrative markets even though the World Health Organization has a list of essential medicines, 95 percent of which are not covered by patents.

  But this argument is flawed and manipulative, say the campaigners because on-going remedies being developed for newer diseases like HIV/AIDS and increasing numbers of resistant strains of diseases like malaria and TB are patented.

  The strict intellectual property regime of the WTO and that imposed by the drugs industry, they warn, threatens to cut off the supply of effective remedies – the penicillins of our day. (SARDC)