A Deadly Dearth of Drugs
Commentary: While the pharmaceutical industry and the vice president played politics, South African AIDS patients paid with their lives.
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South Africa is a multiracial, multiparty parliamentary democracy, one of only two on the African continent. It also, like other nations of sub-Saharan Africa, happens to be caught in the grips of an epi- demic. More than 13 percent of its population is infected with HIV; among some select population groups, such as army troops, the infection rate approaches 50 percent. And South Africa has already suffered an estimated one million AIDS deaths -- nearly double the number of people who have died in the United States.
South African officials know that the drugs now prevalent in the West could slow the epidemic. The United States could have made those drugs available several years ago -- but that would have upset the pharmaceutical industry, which has been a generous contributor to both Clinton-Gore campaigns, as well as to Al Gore's own presidential bid.
The AIDS crisis came late to South Africa, but when it hit, it hit hard. The standard two- and three-drug therapies used in the West, which can cost more than $12,000 a year at market prices, are not an option for the vast majority of South Africans, whose annual income averages less than $3,000. And so in 1997, faced with a rapidly growing emergency, the South African government passed an amendment to its Medicines and Related Substances Act, under which the Ministry of Health could begin compulsory licensing and "parallel importation" of affordable drugs. And that's when the pharmaceutical industry sprang into action.
Parallel importing would allow South Africa to import desperately needed medicines from countries where they were available for less -- sometimes far less -- than a drug company would charge in South Africa. With parallel importing, South Africa could go abroad and buy Western-made drugs in bulk at great savings.
Under compulsory licensing, South Africa could compel a drug company to authorize local manufacturers to produce generic versions of drugs. Compulsory licensing can reduce the price of drugs by as much as 90 percent. Among the first drugs South Africa tried to manufacture was Taxol, a cancer fighter also sold by Bristol-Myers Squibb (BMS) to treat the AIDS-related Kaposi's sarcoma.
The reaction to South Africa's effort to bring lifesaving drugs to its people was swift. More than 40 major drug companies jointly filed suit in South Africa's Constitutional Court, barring the amendment from taking effect by claiming it infringed on their rights. "Compulsory licensing and parallel imports expropriate our patent rights," David Warr, associate director of tax and trade policy at BMS, told one newspaper.
But in fact, the Trade-Related Intellectual Property Rights (TRIPS) agreement, supervised by the World Trade Organization, allows both parallel importing and compulsory licensing by countries faced with a national emergency. Such a country must simply pay a reasonable royalty to the holder of the patent or marketing rights. And South Africa's health minister had said repeatedly that South Africa would abide by international law.
"What drug companies are concerned about," James Love, executive director of the Consumer Project on Technology, testified before Congress, "is the embarrassment of seeing a drug like fluconazole selling for $23.50 in Italy but only 95 cents in India. In this sense, it is a public relations issue. But how many millions should literally die of this embarrassment?"
Yet that's not all. Bristol-Myers Squibb, which earned more than $1 billion in 1998 from Taxol sales, doesn't hold the patent for the drug. Nor did BMS pay to develop Taxol. The drug was developed by the National Institutes of Health, which then gave BMS an exclusive marketing agreement. The same is true of ddI, ddC, and many other AIDS drugs. They were developed with taxpayer dollars, but the marketing rights were assigned to private firms, allowing the fortunate recipients to make large sums of money from medications they did not invent.
American law is clear on the subject of government-developed drugs: The U.S. government is permitted to share with other countries the drugs it invents. In other words, in the case of AIDS-related drugs and South Africa, the issue of intellectual property rights was moot. At any time, the Clinton administration could have made generic AIDS drugs available in South Africa swiftly and easily. It did not. Instead, the administration did what it could to prevent South Africa from exercising its rights under TRIPS.
In October 1998, Congress temporarily cut off foreign aid to South Africa in an effort to precipitate action from that country. Charlene Barshefsky, the U.S. trade representative, denied South Africa certain tariff breaks and placed the country on a "watch list," pending review and possible further action. Commerce Secretary William Daley pushed the American position in Pretoria, the U.S. Embassy lobbied the South African parliament, and the Clinton administration tried to kill a World Health Organization resolution that urged member nations to "ensure that public health interests are paramount in pharmaceutical and health policies."
According to a February 5, 1999, report to Congress from the office of the U.S. Trade Representative, "All relevant agencies of the U.S. governmentÉhave been engaged in an assiduous, concerted campaign" to get South Africa to capitulate.
Since 1994, al gore has been co-chairman of the U.S./South Africa Binational Commission, a body that discusses trade issues of mutual concern. On at least two occasions -- in 1998 and again in early 1999 -- Gore made the Medicines Act amendment the focus of his talks with Thabo Mbeki, now South Africa's president. According to Gore spokesman Tom Rosshirt, Gore was attempting to mediate between the two governments "because the governments were not able to resolve [the issue] at the cabinet level." Gore's position, Rosshirt says, was that South Africa should assure the United States that it would not violate international law.
It was predictable that Gore would weigh in on the issue. It was far less predictable that he would take the side of the drug industry. But the explanation may lie in the connections that the Center for Responsive Politics (CRP), a Washington, D.C.-based watchdog group, discovered between the pharmaceutical industry and several people close to the vice president.
Anthony Podesta, who is the brother of White House Chief of Staff John Podesta and is reportedly close to Gore, was a lobbyist for the pharmaceutical giant Genentech. In 1997 Former Congressman Tom Downey, another close Gore friend, was a lobbyist for Merck, which paid his firm $80,000 in 1997-98. Peter Knight, a longtime Gore aide and an adviser to his presidential campaign, was yet another lobbyist with drug industry clients; his firm took home $180,000 from Schering-Plough in 1998. Gore spokesman Rosshirt insists that any link between Gore's actions and his advisers' connections to the pharmaceutical industry is "absurdly circumstantial. Absurd and irrelevant." The pharmaceutical industry, it should be noted, has traditionally made its biggest donations to Republicans. As a senator, Gore got only crumbs from the industry. Still, lobbyists are nothing if not smart enough to spot a winner. So Glaxo-Wellcome, BMS, Pfizer, and PhRMA gave $582,945 to the Clinton-Gore campaigns of 1992 and 1996, according to figures compiled by CRP, and big drug companies gave or lent another $250,000 to pay for the 1993 inaugural. The generosity has continued in recent years. In 1997 and 1998, the industry gave $51,000 to Leadership '98, Gore's launching-pad PAC, and contributed another $276,850 to the Democratic Party. In early 1999, lobbyists for PhRMA, Pfizer, BMS, Genentech, and Glaxo-Wellcome kicked in an additional $11,000 to Gore 2000. According to the watchdog group Public Campaign, most of the money arrived in late March, after "consumer and AIDS activists began putting pressure on Gore's office to change his South Africa trade policies." Gore had already ignored a pointed letter on the subject from Ralph Nader and criticism from Nader's Consumer Project on Technology. "It's the triumph of corporatism," says Nader of the vice president's position on South Africa. "Gore's not the man he was when he was senator." The criticism continued as Gore officially began his run for the nomination. When he announced his candidacy on June 16, AIDS activists disrupted his speech -- and they showed up at successive campaign events. Stories and commentary began to appear in the mainstream press, describing the trade dispute and Gore's role in it. The problem clearly was not going away. On June 25, Gore wrote a letter to Rep. James Clyburn, the chairman of the Congressional Black Caucus. In it, the vice president wrote, "I support South Africa's efforts to provide AIDS drugs" through parallel importation and compulsory licensing "so long as they are carried out in a way that is consistent with international agreements." Overlooked in Gore's statement was the fact that South Africa had given repeated assurances that it would do just that. And then a curious sequence of events ensued. On September 9, drug industry leaders suddenly announced they had suspended their suit against South Africa. "We acknowledge that there is a procedure for compulsory licensing," says Jeff Trewhitt, a spokesman for PhRMA. Eight days later, U.S. Trade Representative Charlene Barshefsky announced that all was now well between the United States and South Africa because Pretoria had agreed to abide by international law. In essence, the drug industry, the Clinton administration, and Al Gore had declared that two years of pressure on South Africa had all been about nothing. During those two years, an estimated 300,000 South Africans died of AIDS.
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