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South Africa, Manufacturers Settle Over AIDS Medication

By Ann M. Simmons

The world’s biggest drug companies dropped their controversial lawsuit against the South African government Thursday, paving the way for this country to provide cheaper, generic versions of medication, including those to combat AIDS.

The Pharmaceutical Manufacturers Association, on behalf of 39 drug companies, unconditionally withdrew its challenge to legislation -- passed in 1997 but not yet implemented -- that allows the government to make or buy cheaper copies of patented drugs.

The outcome is seen by human rights and health activists as a significant step in the fight to secure treatment for millions of Africans infected with HIV, the virus that can lead to acquired immune deficiency syndrome, and it is expected to help developing nations obtain less expensive medicine.

The settlement allows South Africans “to pursue policies that we believe are critical to securing medicines at affordable rates and exercising wise control over them,” said Health Minister Manto Tshabalala-Msimang. “We have undertaken to include pharmaceutical manufacturers in such initiatives, where appropriate, and we fully intend to pursue this course of action.”

The drug companies, which include giants Merck & Co., Bristol-Myers Squibb Co., GlaxoSmithKline and Boehringer Ingelheim, had claimed that a section of the 1997 law that allows South Africa to import or make cheaper drugs overrode their patent rights. The patents are necessary, they said, to encourage drug research.

Anti-AIDS campaigners, who packed the Pretoria courtroom, burst into song and dance when a lawyer for the drug companies announced the settlement and agreed to pay the estimated $286,000 cost of the case.

“There is no doubt that they have received a black eye,” Mark Heywood, a spokesman for the lobbying group Treatment Action Campaign, said of the drug companies. “And I think it will embolden people in developing countries around the world to stand up for medicines that are affordable.”

“What happened in the courtroom will send a very strong signal that governments have a right to put their people first,” said Kevin Watkins of the British charity Oxfam.

Tshabalala-Msimang said the government had not agreed to any deals in exchange for the withdrawal of the lawsuit. The agreement was brokered during talks involving U.N. Secretary-General Kofi Annan and South African President Thabo Mbeki, she said.

The health minister said South Africa had reiterated its pledge to honor international trade agreements when implementing the law and had invited members of the pharmaceutical industry and the public to help draft the regulations governing the law.

“It’s a partnership. It’s a settlement, and it’s based on trust,” said Mirryena Deeb, chief executive of the Pharmaceutical Manufacturers Association.

“This settlement meets the objectives of both the South African government and the pharmaceutical industry,” added GlaxoSmithKline chief executive Jean-Pierre Garnier in a statement. “But it is my fervent hope that the real winners will be patients.”

GlaxoSmithKline’s South African head, John Kearney, said the ball was now in South Africa’s court to deliver anti-AIDS drugs to its people.