SOUTH AFRICA'S SICK AWAIT JUDGMENT DAY

Multinationals Go To Court Over A Law Aimed At Cutting The Cost Of Medicines

The world's largest pharmaceutical companies opened their lawsuit against
the South African government's attempt to import cheaper anti-Aids drugs
and other medicines on Monday by claiming that property rights were the
central issue of the case.

But demonstrators outside Pretoria high court and across the globe said
that what was really at stake was millions of lives of Aids sufferers.

Nearly 40 pharmaceutical companies claim that a new law which will permit
the importation of generic drugs and patented medicines from suppliers at
prices lower than those of the main drug giants breaches South Africa's
constitution and international trade agreements. The South African
government argues that it has the right to put the lives of the poor ahead
of multinationals' profits. The outcome of the lawsuit could have important
implications for access to cheaper medicines to fight Aids and other
devastating diseases across the developing world.

The court's ruling will also have a significant impact on health care in
South Africa, where nearly half of all health spending goes to pay for
drugs, compared with less than 15% in Britain's national health service.

The pharmaceutical companies want the high court to strike down a law that
permits the South African government to buy patented drugs from suppliers
other than the manufacturer, or generic drugs from factories in India or
Brazil, when patented medicines are "unaffordable" or there is a "health
emergency" such as Aids. The legislation also bans the practice of paying
incentives to doctors to prescribe expensive brand name medicines. The drug
firms say they are not trying to justify unethical and protectionist
practices but to defend their patents and to strike down a law they say is
unconstitutional in part because it lacks clarity on issues such as what is
"unaffordable".

But the director general of South Africa's health ministry, Ayanda
Ntsaluba, accuses pharmaceutical companies of opposing ethical laws that
are standard practice in Western countries.

"This case is about how we get affordable drugs to the majority of people
in South Africa. There are drugs that we pay more for here than they do in
Europe," he said. "It's also about how you prescribe and distribute those
drugs. There are some very dubious practices and we want to put a stop to
them. The drug companies oppose us and we've told them that the things they
don't want us to stop in our own society would never be permitted in their
own."

The Pharmaceutical Manufacturers' Association (PMA), representing 39 big
drug companies, won a court injunction blocking the law's implementation
three years ago by claiming that it breached international trade
agreements, specifically the Trade Related Intellectual Property Rights
(Trips), by in effect scrapping recognition of patents on medicines.

The Clinton administration backed the drug companies and put South Africa
on a "watch list" of nations declared patent pirates. But over time the
South African govern ment made a persuasive case that the law is permitted
under Trips, and South Africa was dropped from the watch list. The Bush
administration has gone further, and said it does not oppose the new
legislation.

The drug companies have also been isolated by other foreign governments. On
top of that the European Union and the World Health Organisation say they
do not oppose South Africa's right to implement the new legislation. The
World Trade Organisation has said that the laws do not infringe
international patent protections.

On Monday protesters rallied against the drug companies across South Africa
and in other countries, including Australia, Canada, France, Germany,
Britain and the United States. The leadership of South Africa's powerful
trade union confederation, Cosatu, led a march of several thousand people
to the US embassy in Pretoria.

However, the head of the PMA, Mirryena Deeb, said: "There is lack of due
process. The minister can make a decision that a drug is too expensive and
the drug companies have no right to defend themselves. This law is
arbitrary and gives the health minister too many powers . . . The state
cannot know what it costs to treat HIV-positive people because it has never
asked us. Three years ago GlaxoWellcome [which merged with SmithKline
Beecham last year to form GlaxoSmithKline] approached them and offered a
world best price. The government said it was too expensive. Glaxo said:
'Tell us what you can afford.' The government never came back."

But Dr Ntsaluba argues that, even with the discounts offered to other
governments, his own could not afford to buy many brand-name drugs,
particularly those used for treating HIV. The government has pointed out
that drugs such as the antibiotic Ciprofloxican, considered an "essential
medicine", cost South Africa's public health sector 75 cents for each pill,
and the country's private health care providers more than $4.50 a tablet.
If the new law is implemented, a generic of the drug could be imported from
India for just 6c a pill.

If the legislation comes into force, it will have a big impact on the
treatment of South Africa's 4m people with HIV - about 10% of the
population - and other serious diseases.