Volume 10, No.3 - May 2001

Victory for all the people

HIV/Aids

A victory for all the people

ICTFU welcomes withdrawal of pharmaceutical giants

  

A victory for all the people

The decision by the Pharmaceutical Manufacturers Association (PMA) to withdraw their court case against the South African government was an historic victory of good over evil. Every South African can be proud that we have won this battle against such powerful and wealthy opponents. All of us together made this possible.

For people living with HIV/AIDS and other serious illnesses there is now a ray of hope that they will soon be able to get access to the life-saving treatment they need.

COSATU congratulated and thanked the Government for standing firm in defence of its legislation and refusing to enter into any deals with the multinational drugs companies.

We also thank all those activists who sacrificed their time to attend pickets and marches all over South Africa and the international supporters in trade unions, NGOs, governments and the 250 000 individuals who signed a petition. This victory proves that mass mobilisation can lead to success. People all over the world have won a major victory.

It is right that the South African government should be taking the lead on behalf of all developing countries, in the struggle for cheaper medicines and a better life for all their peoples.

The campaign however is not over. We need to continue to work together to take the campaign forward until all who need medicines have access to them. COSATU and the Treatment Action Campaign (TAC) have called for a conference between government and civil society to look into ways to speed up the implementation of the Medicines and Related Substances Control Amendment Act and begin to supply life-saving anti-retroviral drugs to people living with HIV/AIDS. We are also calling on the government to increase the Health Department's budget to make this possible.

COSATU is also considering making an appeal to major employers like Anglo-American, De Beers, Old Mutual, etc. to supply antiretroviral medicines to those of their employees and their families who need them.

COSATU and TAC will be joining the international campaign in support of the Brazilian Government, which has been taken to the World Trade Organisation to answer 'charges' that it too has passed laws to make cheaper drugs accessible to the poor, in defiance of patent laws which favour the big private corporations.

The South African case has proved that pressure from the people of the world can humble the most mighty economic giants. The call for 'People before Profits!' will be heard again and again until it becomes a reality in every part of the globe.

ICFTU welcomes the withdrawal of pharmaceutical giants

The decision by the Pharmaceutical Manufacturers Association (PMA) to withdraw their court case against the South African government was welcomed by the International Confederation of Free Trade Unions (ICFTU).

The ICFTU warned however that the battle to provide affordable drugs to South African HIV/AIDS victims is not over and called on the government to seize its chance to make a difference in the lives of millions of people infected by the virus.

In line with a mandate from its XVIIth World Congress, which also took place in South Africa (April 2000), the ICFTU has consistently campaigned for pharmaceutical companies to democratise access to life saving drugs and had widely publicised and supported actions by the South African trade union movement in its struggle to pressurise for HIV/AIDS patients to have cheap access to the required drugs.

The global union confederation and its South African affiliates were therefore delighted at the decision by a consortium of pharmaceutical companies to withdraw their court case and to enter into meaningful dialogue aimed at providing these drugs at affordable prices to the patients.

Now the PMA has withdrawn its lawsuit, there are no legal obstacles to the health minister' using parallel importation of drugs and generic substitution (cut-price "copy" drugs) where necessary.

"This is a hurdle that has now been overcome which means that HIV/AIDS victims are now one step closer to receiving the drugs they need to stay alive," said Bill Jordan, General Secretary of the ICFTU.

"The government now has to make sure that the drugs get to those in need. COSATU and ICFTU supported the government of South Africa in their battle against the PMA, but we are determined to maintain pressure to take advantage of this positive development and ensure that all of those who need medicines have access to them. The campaign is not over.

"The PMA court case saw an overwhelming cohesion among various NGOs, trade unions and other member of civil society. We hope that this encourages these countries to take similar actions and stand up against the pharmaceutical companies' unfair pricing scheme," said Bill Jordan.

Along with other trade unions, the ICFTU will be joining the international campaign in support of the Brazilian government's right to act in the best interests of its citizens by taking full advantage of the TRIPS provisions to give full access to generic pharmaceuticals. The ICFTU demands that the World Trade Organisation stand by its commitment to allow developing countries to exercise all their rights to flexibility enshrined in TRIPS.

"The WTO keeps saying that TRIPS does not need further reforms because it already includes all the flexibility that developing countries needs. Now is the time for them to live up to these claims", concluded Bill Jordan.

Solidarity against PMA

International support for COSATU's fight against the multinational drugs companies keeps flooding in. Here are extracts from just two of the messages of support sent to COSATU and its affiliates.

From the General Confederation of Labour, France

Dear Comrades

We are following attentively the fight you are leading, in your country, for people to be able to obtain medicines at affordable prices in order to curb AIDS.

We support your struggle against the arrogance of the multinational pharmaceutical firms who make the choice of profits against lives. We forcefully denounce the interference of the United States of America.

Today HIV/AIDS is a human and economic disaster. We are concerned; the CGT feels itself completely involved in this fight. We appeal to our government to:

Finally we think that together we must agitate for the WLO to put back on the agenda the task of examining the particular measures on HIV/AIDS orientated towards the world of work and business. They must bring about actions of sensitisation, prevention and protection.

The life of millions of human beings is at stake, economic activity for the development is thus gravely threatened. Faced with this situation be assured of our full support.

Alphonse Veronese

Member of the Executive Commission responsible for International Relations Confederation General de Travail, France


Implications of the court victory

A statement by the Treatment Action Campaign (TAC) The court case victory against the Pharmaceutical Manufacturers Association (PMA) is a critical step toward establishing a legal framework for making medicines in South Africa affordable. It is also an important victory of activists, poor people and people with HIV/AIDS over corporate abuse of power.

This was only possible because of a superbly organised global effort and the dedication of thousands of volunteers. TAC thanks all our allies and supporters for their contributions. There have been a number of misconceptions circulating regarding the practical implications of the Medicines and Related Substances Control Amendment Act No 90 of 1997 (Medicines Act).

Some commentators have stated that the new law allows the South African government to immediately proceed with the importation and production of generic versions of essential medicines. On the other hand, others have implied that the law will have no effect on access to medicine. Both opinions are wrong.

What does the Medicines Act do?

The Medicines Act introduces three important measures: (1) Generic substitution of off-patent medicines and medicines imported and produced under compulsory licenses; (2) Parallel importation of patented medicines; (3) A transparent medicine pricing system through the establishment of a pricing committee.

Generic Substitution

The generic substitution measure compels pharmacists to prescribe a cheaper generic version of a medicine, if one exists, when presented with a prescription from a patient. Suppose a doctor prescribes Bactrim (approximately R95 for 20), the formerly patented brand-name of an essential medicine, scientific name - cotrimoxozole - to a patient, who then goes to a pharmacy to obtain the medicine.

The pharmacist will be obliged to prescribe a cheaper generic version, such as Purbac (approximately R16 for 20), unless a doctor writes the words "No Substitution" on the prescription. Although some ethical pharmacists already practice generic substitution, many do not, especially when dealing with a population that is generally unaware of price differences between generic and brand-name drugs.

Generic substitution does not apply to medicines under patent, unless a compulsory license has been granted for a generic.The Patent Act, a law which is undisputed and TRIPs-compliant, contains provisions for obtaining compulsory licenses and it is this legislation, not the Medicines Act, which will have to be used to ensure substantial, sustainable, price reductions of anti-retrovirals and other essential medicines under patent.

Parallel importation

The parallel importation measure has perhaps been the source of most of the confusion surrounding the Medicines Act. It refers to the purchasing of patented medicines from foreign countries, based on the principal that once a product is sold, the seller loses all ownership rights over it. Parallel importation does not refer to purchasing generic versions of patented drugs, which requires a compulsory license.

A medicine that the government and private sector pharmacists would benefit from importing in parallel is Ciprobay, Bayer's patented brand-name version of ciprofloxacin, an essential antibiotic. The South African government purchases one 250mg capsule for R2.93. However, in India retail pharmacists usually sell this medicine for R0.65 per capsule, because Ciprobay has to compete against generic equivalents in India.

Pricing Committee and International Tendering System

Another element of the Medicines Act is the introduction of a Pricing Committee to set up transparent pricing mechanisms. Pharmaceutical companies will have to justify the prices they charge.

The Pricing Committee can recommend that the Health Minister make regulations to introduce a transparent pricing system for all medicines. Drug companies will be allowed to set a single exit price for any medicine, so pharmacies will not be allowed to charge an amount higher than the exit price. Instead, the Pricing Committee will recommend a dispensing fee that pharmacists can charge instead of a mark-up.

Benefits of the new measures

Generic substitution will ease pressure on medical aid costs and reduce the prices of medicines in the private sector, which will be made accessible to more people and ease the disproportionate pressure on the public health-care system. Parallel importation will reduce the prices of some patented medicines in both the public and private sectors. Although these reductions will not, in general, be sufficient, they will free up resources in the public sector and allow more people access to the private sector.

At a minimum the Pricing Committee should force pharmaceutical companies to justify the prices they charge. It will also reduce over-charging by pharmacists in the private sector.

Future pharmaceutical industry issues

There will probably be many more legal disputes with the pharmaceutical industry over the next few years. TAC, and hopefully the government and generic manufacturers, will work toward obtaining compulsory licenses for essential patented medicines.

Either the multinationals will have learnt from the public embarrassment they experienced over the last few weeks and they will grant voluntary licenses, thereby avoiding litigation, or they will continue to contribute to delaying access to medicines, at the expense of their reputations.

A common misconception regarding compulsory licenses is that they do not result in profits for the patent-holders. Compulsory licenses are usually accompanied by royalty payments on sales by generic manufacturers. While multinational pharmaceutical companies will experience substantially reduced profits from compulsory licenses, they will still receive income from generic sales.

The pharmaceutical companies must act in good faith and not hamper the implementation of the Medicines Act. They have asked for representation in issuing the Pricing Committee regulations, which is fair enough, but civil society, particularly TAC, health-care workers, labour and government must be represented and have greater influence.

Also, companies that have publicly announced price reductions must implement them immediately. Bristol-Myers Squibb (BMS) stated that the combined daily price of anti-retrovirals ddI and d4T would be reduced to US1$ per day and that their patents on these medicines would not be enforced in sub-Saharan Africa.

They have made this offer in bad faith, because it has not been extended to the private sector, the only significant supplier of triple-drug anti-retroviral therapy in sub-Saharan Africa. In particular they have spurned a request by a private company, AID for AIDS, to receive ddI and d4T at the new price.

The court case, in particular an affidavit by James Love of the Consumer Project on Technology, has exposed BMS as arguably the world's worst patent abuser, a company that specialises in turning publicly funded research into private profit. TAC will increase the pressure against BMS to drop its prices and to unequivocally relinquish its publicly funded patents, without compensation.

Government's responsibilities

But the South African Government now bears the primary responsibility for fighting the HIV epidemic. They must:

An important lesson from the court case has been that global solidarity on social issues is immensely powerful. The South African government would not have won so easily and quickly without global mobilisation. Issues of concern to all poor countries must be combated with a united front. The South African government must issue a statement of support for Brazil in its WTO dispute with the United States.

The South African government and TAC have had a mixed relationship over the last few months, as a result of government's, generally, poor handling of the epidemic.

TAC will be government's firmest supporter when it does the right thing, such as introducing the Medicines Act, but we will be its sternest critic when it fails to meet its constitutional duties to protect life and dignity. Particularly concerning are the continual delays in implementing a countrywide mother-to-child transmission prevention programme and the lack of a treatment plan. TAC's objectives are to get treatment for people with HIV/AIDS and to build a quality health-care service. We will use all means at our disposal to achieve these aims.