MSF is also calling on governments of developed countries to speak out against these attempts to hinder South Africa's effort to make medicines affordable for its citizens. In particular, MSF asks that the United States government and the European Union issue statements supporting South Africa's right to use legal measures that comply with international trade agreements to improve access to medicine.

"Everyday, dozens of people with HIV/AIDS come to our clinics in a poor township outside Cape Town looking for affordable medicine, but the high price of drugs means that we are only able to offer treatment to a limited number of people," said Dr. Eric Goemaere, director of MSF's AIDS program in South Africa. "People with HIV/AIDS in South Africa are dying because drug prices are too high as a result of patent protection. I find it appalling that the pharmaceutical industry is ignoring this and instead is trying to block the government's efforts to improve access to medicines."

The South African government inherited a system of high medical prices from the apartheid regime and is now trying to cope with the burden of providing care for over four million people with HIV, more than any other country in the world. It is trying to address these challenges by allowing the Ministry of Health to better respond to health crises by using measures such as parallel importation and generic substitution. These measures are legal under the World Trade Organization's intellectual property rights rules (the TRIPS Agreement) and are widely used in Europe and the U.S.

Additionally, MSF supports the call made by the Treatment Action Campaign, a South African NGO working on access to medicines for people with HIV/AIDS, for an International Day of Action on March 5 to protest the pharmaceutical industry's involvement in blocking the South African government's attempts to improve access to medicine.

For more information on solidarity activities taking place in the United States and around the globe on March 5, see www.globaltreatmentaccess.org/action.html.

For more information on MSF's Access to Medicines Campaign, see www.accessmed.msf.org

List of Companies Involved in the Lawsuit

The Pharmaceutical Manufacturers' Association of South Africa
Alcon Laboratories (S.A.) (Proprietary) Limited
Bayer (Proprietary) Limited
Bristol-Myers Squibb (Proprietary) Limited
Byk Madaus (Proprietary) Limited
Eli Lilly (South Africa) (Proprietary) Limited
Glaxo Wellcome (South Africa) (Proprietary) Limited
Hoechst Marion Roussel Limited
Ingelheim Pharmaceuticals (Proprietary) Limited
Janssen-Cilag Pharmaceutica (Proprietary) Limited
Knoll Pharmaceuticals South Africa (Proprietary) Limited
Lundbeck South Africa (Proprietary) Limited
Merck (Proprietary) Limited
MSD (Proprietary) Limited
Novartis South Africa (Proprietary) Limited
Novo Nordisk (Proprietary) Limited
Pharmacia & Upjohn (Proprietary) Limited
Rhone-Poulenc Rorer South Africa (Proprietary) Limited
Roche Products (Proprietary) Limited
Schering (Proprietary) Limited
Schering-Plough (Proprietary) Limited
S.A. Scientific Pharmaceuticals (Proprietary) Limited
SmithKline Beecham Pharmaceuticals (Proprietary) Limited
Universal Pharmaceuticals (Proprietary) Limited
Wyeth (Proprietary) Limited
Xixia Pharmaceuticals (Proprietary) Limited
Zeneca South Africa (Proprietary) Limited
Bayer AG
Boehringer-Ingelheim International GmbH
Boehringer-Ingelheim KG
Bristol-Myers Squibb Company
Byk Gulden Lomberg Chemische Fabrik GmbH
Dr. Karl Thomae GmbH
Eli Lilly and Company
F. Hoffman-La Roche AG
Merck KGaA
Merck & Co., Inc.
Rhone-Poulenc Rorer S.A.
SmithKline Beecham

Another legacy confronting the new government is the high cost of medicines. Most experts agree that the price of drugs in South Africa is quite high, reflecting the spending capacity of the minority of the population who can afford to pay prices similar to those seen in many European countries.

Today, these difficulties are compounded by a devastating AIDS epidemic. Out of a total population of just over 40 million, South Africa now has more than 4.3 million people living with HIV, more than any other country in the world. In 2000 alone, 250,000 people died of HIV/AIDS. By the end of this decade, life expectancy is projected to fall by more than 20 years and more than a million children will have been orphaned. Studies estimate that the economy will contract by nearly one-fifth by 2010.

The vast majority of people with HIV/AIDS have little access to the medicines that have turned HIV into a chronic condition in developed countries. This includes both patent-protected treatments for opportunistic infections, such as fluconazole (which sells in the private sector for as much as 30 times the price of generic alternatives available in countries such as Thailand), and the antiretroviral drugs that target HIV directly (for example, an Indian generic manufacturer recently offered to sell triple combination antiretroviral therapy for US$350 a year, one tenth of what the combination costs in South Africa currently).

The government has recently announced that it will set up more than 20 sites to study the feasibility of using antiretrovirals for the prevention of mother-to-child transmission. However, it has made it clear that at current prices, it is not economically possible to consider broader use of antiretrovirals.

Background: The history of the court case

Making health care more accessible to South Africa's poor is now a constitutional duty facing the government. The Constitution says that "[e]veryone has the right to have access to health care services."

In 1997, the government passed legislation ñ the Medicines and Related Substances Control Amendment Act (Act 90 of 1997) ñ to help realise this goal by making medicines more affordable.

Less than three months after President Nelson Mandela signed this bill into law, the Pharmaceutical Manufacturers' Association of South Africa (the PMA) filed suit to block it. After more than three years of delays, the case will be heard in the Pretoria High Court from 5 ñ13 March. In this period, more than 400,000 people have died of AIDS-related illnesses, many because they could not pay the high cost of medicines. Over the same period, multinational pharmaceutical companies have sold approximately US$10 billion worth of antiretrovirals globally.

In 1998 and 1999, the U.S. government and the European Union, which both adopted the pharmaceutical industry argument that Act 90 was in violation of the World Trade Organization's agreement on intellectual property rights (the TRIPS Agreement), placed a lot of pressure on the South African government to amend or drop Act 90. However, both the U.S. and the E.U. subsequently changed position and withdrew their opposition to Act 90, admitting that the two most controversial measures through which countries can improve access to medicines, compulsory licensing and parallel importing (both of which are described below), are permitted by the TRIPS Agreement.

Background: The specifics of the court case

Act 90 of 1997 was intended to introduce a number of cost-containment measures, most of which are common in developed countries.

The clause that attracted the most debate internationally was so-called Section 15C. It sets up a system to permit the parallel importation of medicines. Parallel importation is the practice of shopping around for the lowest world price patented products. If a patent holder sells a product for less money in India than in South Africa, parallel importation would allow the cheaper drugs sold on the Indian market to be imported to South Africa. Parallel importation has nothing to do with generics; it simply relates to the free trade of patent-protected products. The TRIPS Agreement specifically says that matters relating to parallel importation cannot be subject to challenge at the WTO, in effect meaning that countries are free to decide for themselves the extent of parallel importation they wish to enshrine in their national laws. For example, the European Union has a system of regional exhaustion, which allows parallel importation between member states.

The PMA also argues that Section 15C is written overly broadly, in that it expands the powers of the Minister of Health to allow her to override patent protection (to issue compulsory licenses) in order to facilitate access to affordable medicines. Compulsory licensing is the use of a patented product without the consent of the patent holder (although the patent holder usually receives remuneration for this usage). As noted above, it is permitted in the TRIPS Agreement, which specifies situations (e.g., in the case of a national emergencies or to remedy anti-competitive practices) in which compulsory licensing is appropriate, but it does not limit its usage to these situations. Compulsory licensing is regularly used by developed countries, particularly the United States.

Another key issue in the court case is generic substitution. This is the practice ñ common in Canada, Holland, Japan, and the U.S. ñ of requiring that a pharmacist dispense a generic version of a medicine if it is cheaper than the branded product, unless the patient expressly forbids the pharmacist from so doing. This only applies when the exclusive marketing rights conferred by a patent are no longer in force, so in no way effects the sales of a product still protected by a patent. The PMA objects that this amounts to unfair discrimination on their right to trade, despite the fact that generic substitution is in fact a promotion of competition to reduce the price of medicines: as long as the branded product is as cheap as the generic, then there are no restrictions on its sale.

Act 90 also includes provisions to better regulate medicines in South Africa, and to ensure transparency in pharmaceutical pricing by requiring the setting of a "single-exit price" and doing away with bonuses and other forms of "perverse incentives." Currently, a pharmaceutical company can lure a doctor or pharmacist into prescribing or dispensing its products by offering cut-rate deals for a short amount of time, before raising prices once a patient has begun a course of therapy (by which point it may be medically unadvisable to switch to a cheaper alternative product). For more information, contact: Kris Torgeson, 212-655-3764 or visit www.accessmed.msf.org

Médecins Sans Frontières is an independent humanitarian medical relief agency actively campaigning for access to essential medicines.

MSF Access to Essential Medicines Campaign
Rue du Lac 12
CP 6090
CH-1211 GENEVA
tel ++41-22-8498 405
fax ++41-22-8498 404
www.accessmed-msf.org

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