World Trade Rules and cheaper drugs: EDITORIAL, The Lancet

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EDITORIAL, The Lancet, Vol 357, page 243, January 27, 2001

World Trade Rules and cheaper drugs

Three years ago, the South African parliament gave the Minister of

Health power to permit parallel importation of drugs produced under

licence in another country where prices are cheaper. The Medicines

and Related Substances Control Amendment of 1997 would allow the

government to bypass the monopoly granted to companies holding the

patents in South Africa.

The government argues that the measure is necessary to ensure access

to life-saving drugs, particularly AIDS drugs, which are typically

priced far beyond what most South Africans can afford.

The Pharmaceutical Manufacturers Association of South Africa, however,

moved quickly to halt implementation of Act, filing a suit in the

Pretoria High Court. The suit was suspended, for a time, while the

government and PMA tried to negotiate. Eventually, believing that the

government was not negotiating seriously, PMA took up the suit again.

The case is now set to go before the High Court on March 5. Should

the court rule in the government's favour, the PMA says it will take

its case to the World Trade Organization. PMA, joined by the

international pharmaceutical industry, has also been persuading many

western governments to exert pressure on South Africa.

The USA went so far as to place South Africa on its " watch

list " of troublesome countries considered to be violating US trade

interests, a designation that can be a prelude to trade sanctions and

cuts in foreign aid.

The industry argues that the law is unjust, unnecessary, and unwise.

Unjust because the law, by giving the Minister of Health arbitrary

power to ignore patent rights, essentially allows the expropriation

of intellectual property rights without due process mandated by South

African patent law and guaranteed by South Africa's constitution.

Unnecessary, the industry contends, because the government could, if

it so chose, take advantage of tier-pricing offered by drug companies

at rates far below those offered to the private sector. And unwise,

because the law will rob companies of income they need to cover the

costs of research and development, discourage investment the country

needs to develop, and endanger consumers by encouraging the

importation of substandard drugs.

The main health-care problem facing South Africa and other developing

n!ltions, the companies argue, is the lack of an infrastructure

capable of providing basic health services-for example, without the

staff, clinics, and laboratory services needed to oversee the use of

AIDS drugs, resistant strains will quickly appear, making a bad

situation even worse. The health systems of sub-Saharan countries are

indeed inadequate, and lower drug pricing is not the whole answer.

However, there are health teams in the cities, towns and villages who

could prevent HIV infection in thousands of newborn babies and

improve the lives of thousands of people already infected-if only

they had access to medicines. They and their patients should get that

chance.

Even if the PMA prevails in the courts or with its appeal to the WTO,

it is unlikely to get public opinion on its side. The world's

understanding of the AIDS catastrophe has grown considerably in the

3 years since the PMA filed suit. And there is increasing awareness

that more needs to be done to get essential medicines to people

living in the developing world. The time has come for the

pharmaceutical industry and the governments who represent them in

trade disputes to acknowledge that the world is facing an

extraordinary challenge.

The WTO's agreement on trade-related aspects of intellectual-

property rights does allow parallel importation and compulsory

licensing in the face of a public health emergency. AIDS/HIV in sub-

Saharan Africa is just such an emergency. Rather than fighting the

efforts of these nations to deal with this crisis, industry experts

and government officials should be working with WHO to ensure that

trade agreements that currently threaten already fragile economies

can be adjusted to meet any crisis affecting the health of developing

nations now and their very existence as trading nations in the future.

The Lancet