Two leaked memos, revealed to the press and public on January 10, have created a major blowup in South Africa, where the government is accusing the international pharmaceutical industry of plotting to interfere in upcoming elections so as to derail a government initiative to control the prices of vital medications.
South Africa has had a rather easygoing system of policing claims of patent coverage by pharmaceutical importers, and the proposed new "National Intellectual Property Policy," which is to be incorporated into proposed legislation, has the purpose of tightening this up as a means of controlling costs.
One issue is what is called "evergreening": In many cases, the lives of patents are artificially extended when pharma companies make minor or even cosmetic changes to the product, and then take out a completely new patent on it, making it impossible for cheaper generic versions of the basic medication to be produced and distributed. Among other things, the proposed South African bill will crack down on this and make it easier for government regulators to deny recognition of such new patents when the product is essentially the same as the one already patented.
South Africa is also working to create its own generic pharmaceuticals industry, whose success partly depends on being able to become independent of transnational pharma companies. Predictably, organizations working for the rights of patients as well as companies wanting to develop generics have praised the new plan.
This is a vital issue for South Africa because it pays a lot for drugs such as antiretrovirals to combat the country's very high HIV levels, as well as others to control tuberculosis, an old scourge. Since the apartheid days, South Africa has greatly increased access to health care for its poor majority, but having to pay top prices for imported medicines is a strain on the health care system. Various organizations in South Africa have been pushing the government to be more pro-active in controlling the costs of, and increasing access to, medications.
The leaked memo, from the Innovative Pharmaceutical Industry Association of South Africa (IPASA), a trade group that includes both South African companies and pharmaceutical transnationals, including major pharma transnationals such as Abbott, Baxter, Bayer, Bristol-Myers Squibb, GE Health Care, Merck, Pfizer, Lilly and others, hints at plans for a negative public relations campaign in which it would be claimed that the passage of the law would discourage investment in South Africa by transnational pharmaceutical companies and other potential foreign investors. This in turn would supposedly exacerbate the high unemployment rate of the country, a red hot issue in national elections in May.
The plan as outlined in the leaked memos involved paying $450,000 to a politically wired Washington, D.C. company, Public Affairs Engagement (PAE) to work with IPASA to develop a public propaganda and pressure campaign to block changes in the patent regime. PAE is headed by James K. Glassman, who is associated with the Heritage Foundation and with U.S. government media operations under George W. Bush . Others in the firm have Democratic Party connections.
South African Health Minister Aaron Motsoaledi reacted angrily to the news of the maneuvering by IPASA, calling it "satanic" and potentially "genocidal" because it would severely impact access to needed medications by South Africa's poor. The main labor federation in South Africa, COSATU (Congress of South African Trade Unions) also denounced the plan and expressed its support for the government's projected new policy. The intensity of the reaction to the leaked plans caused both IPASA and PAE to issue statements claiming that the agreement between them was only tentative and will not proceed.
This is not the first time that the pharmaceutical companies have crossed swords with the South African government on the issue of patents and the cost of medications. At the beginning of the 2000s, a similar fight over the substitution of generic drugs for much more expensive brand names controlled by transnational corporations took place, and the corporations came out of it bloodied.
Nor is the issue confined to South Africa. India and Brazil also have ongoing fights to develop their own generics in the face of protests by transnational corporations that their intellectual property rights are being violated, and threatened action through the World Trade Organization.
Sick people in the United States are also threatened by this kind of activity by the big transnational pharmaceutical industry. In the proposed Trans Pacific Partnership (TPP), there is a plan to greatly strengthen corporate ability to use patent law to block cheaper generic drugs. Labor and other sectors in the United States and beyond are working hard to stop this new plan.
Photo: AIDS drugs are among those South Africa says it is being overcharged for by the big pharmaceutical companies. AP