Drug firms expected to abandon case over cut-price medicines

Demonstrators outside the High Court in Pretoria protest against the drugs firms' actions Keystone

Pharmaceutical companies challenging a South African law allowing the import of cut-price drugs are reportedly preparing to abandon their case. A Pretoria court postponed the hearing until Thursday, as the two sides tried to hammer out a settlement.

A lawyer representing the 39 drug companies, which include Switzerland’s Novartis and Roche, said the delay had been requested “so common ground can be found for a settlement”.

Aid agencies suggested that the firms had finally caved in pressure amid charges that they were putting profits ahead of lives.

A senior policy adviser at the British charity, Oxfam, said: “We understand that 37 of the 39 companies have pulled out of the case and the dispute now centres on which of the drug firms will settle the legal bill.”

A spokesman for the South African government said on Wednesday that a settlement was imminent.

The case centres on a South African law adopted in 1997 – but never implemented – which gives the health minister a limited right to import generic versions of patented drugs or to license their domestic production.

The drug companies argue that the law infringes patent rights and discriminates against the industry, endangering profits and research.

But the South African government maintains that it cannot afford to pay for patented drugs to fight the Aids epidemic, which has affected about 10 per cent of the country’s population of 45 million.

Non-governmental organisations have weighed in on the South African government’s side. On Tuesday, a group of 28 development and aid organisations, including Swissaid and Terre des Hommes, called on Roche and Novartis to withdraw from the case.

They said it was “shocking that [the firms] should give higher priority to preserving their profit margins and patents than the health of millions of people”.

Their arguments were echoed by the United Nations programme on HIV/Aids (UNAIDS). Policy adviser, Ben Plumley, said drug firms needed to re-think their approach to poorer countries.

“The kind of dynamic that exists in the industrialised world – where drug companies recoup their investment in research and development and provide return to shareholders – should not apply in the same way in the developing world.”

The British charity, Oxfam, described the case as “the Vietnam of the drug industry” and accused the firms of violating human rights by denying drugs to those in need.

The pharmaceutical companies refused to comment on the case, saying they would issue a statement once the case was over.

swissinfo with agencies