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NEWS
NO TO CHEAP DRUGS

South Africa Vetoes AIDS 'Emergency'
Leader Resists Step Toward Cheap Drugs

By Jon Jeter
Washington Post Foreign Service
Thursday, March 15, 2001

CAPE TOWN, South Africa, March 14 -- President Thabo Mbeki today rejected appeals to declare South Africa's AIDS epidemic a national emergency, a
step that would enable the government to override patents owned by foreign pharmaceutical firms and buy or manufacture cheap, generic versions of
life-prolonging AIDS medicines.

Addressing Parliament here, Mbeki said he did not think it necessary to invoke a World Trade Organization provision that allows member nations to
suspend patents in cases of extreme national urgency, without the patent-holders' consent.

An estimated 4.2 million of South Africa's 45 million people are infected with the virus that causes AIDS, more than in any other country.

With only a fraction of the population able to afford the potent antiretroviral drugs and other therapies produced by multinational pharmaceutical companies, Mbeki's government has been under intense pressure to take steps that would make AIDS drugs available and affordable.
At the same time, however, the government is wary of taking any drastic steps that would scare off needed foreign investment or raise questions
about its commitment to free markets.

The government passed a law four years ago that permitted its health minister to bypass drug-makers' patents to provide cheaper generic versions
of the treatments. But that law, which is narrower in scope than the WTO provision, is being challenged in court by a coalition of nearly 40 pharmaceutical firms. Labor unions, human rights activists and opposition politicians have urged Mbeki's governing party, the African National Congress, to declare a state of emergency that would make cheaper drugs available under the WTO provision, rather than place all its hopes on the 1997 law and face a protracted legal ordeal.

But while he did not explicitly say so today, Mbeki and other government officials apparently fear that while invoking the WTO measure could help
alleviate the AIDS crisis, it could also worsen South Africa's broader social and economic woes by scaring away foreign investors just as the country is trying to catch up with a fast-moving global economy.

If the trade pact's national emergency clause were activated, all property rights in South Africa would be temporarily suspended, and many in the
country's business community have raised concern over the kind of signal that would send abroad. Foreign investment here declined by 50 percent last
year, and surveys show that foreign business executives often fail to distinguish South Africa from neighboring Zimbabwe, where the government all but encourages black peasants to illegally occupy land owned by white farmers.

"There are other consequences," Mbeki said today, "which are not desirable."

Mbeki explained his refusal to declare an emergency by saying that South Africa's own law was adequate in providing wider access to AIDS medicines.
Furthermore, government officials here express fear that an emergency declaration would dry up investment altogether just as they are trying to right the economy following years of sanctions and mismanagement by the white-minority apartheid government, ousted in the nation's first all-races election seven years ago.

"It really is a very difficult balance," said Greg Mills, executive director of the South African Institute of International Affairs. "On the one hand, we face a massive AIDS crisis. But on the other hand, if we declare a state of emergency, we run the risk of looking like another unstable player in an unstable region."

Additionally, because South Africa's is the most robust market economy of any nation that is led by a mostly black government, Mbeki and other officials are sensitive to criticism -- real or imagined -- that they are not up to the job.

"No other country has declared a state of emergency on these grounds, "Mbeki said in his address. "We see no reason why we should not rely on the
more comprehensive legislation approved by this Parliament."

Mbeki said that under WTO guidelines, a state of emergency could only be declared to restore peace and order and that no such threats to the country's security existed.

The question of how to provide affordable AIDS medicines to impoverished people is plaguing governments throughout sub-Saharan Africa, where 25.3
million of the 36.1 million people with HIV live, according to U.N. estimates. In neighboring Botswana, where 36 percent of adults are infected with the human immunodeficiency virus, which causes AIDS, the government announced today it hoped to provide antiretroviral medication by year's end to all who need it. Botswana has the highest rate of HIV infection in the world, but the country's entire population of 1.6 million is less than the number of HIV victims here.
Botswana's President Festus Mogae said that failure to arrest the spread of AIDS in his country "means blank extinction -- it's a reality," news services reported.

But such programs and rhetoric have been slower to come in South Africa.

Known for his restless intellect, Mbeki last year puzzled his allies and foes here and abroad by questioning the efficacy of conventional AIDS medicines and supporting scientists who have discounted the connection between HIV and AIDS.

And while the median household income in South Africa is less than the $10,000 annual cost for the triple-drug therapy, or "cocktail," commonly used in the West to treat the disease, Mbeki's governing party refused until last month to administer even affordable medicines that have been shown to reduce transmission of HIV from mothers to their unborn children.

Now that the government has begun to shift its stance, and Mbeki has withdrawn from public debate on HIV, international scrutiny has been refocused from South Africa's policies to pharmaceutical companies' pricing policies.

One of the world's biggest drug companies, New Jersey-based Merck & Co., agreed this month to sell two of the roughly 14 medicines used to treat HIV
at drastically reduced costs. And an Indian-based drug manufacturer, Cipla Ltd., last week asked South African officials to grant it a license to sell cheap, generic AIDS drugs to the government. And today New York-based Bristol-Myers Squibb Co. announced that it will sell the two AIDS medicines it manufactures to sub-Saharan countries "below cost" and will not prevent South Africa from ignoring the patent rights it holds on one of the drugs.
© 2001 The Washington Post Company