South Africa and the rest of Africa is experiencing an HIV/AIDS catastrophe, which the U.S. Surgeon General has likened to the plague which decimated Europe in the fourteenth century.
South Africa reasonably wants to take steps to lower the extraordinary prices of essential medicines to treat HIV/AIDS and other diseases. (“Drug cocktails” to treat HIV/AIDS can cost $12,000 a year per patient in Africa.)
Vice President Albert Gore thinks this is a bad idea. As Chairman of the United States/South Africa Binational Commission, Vice President Gore has engaged in an astonishing array of bullying tactics to prevent South Africa from implementing policies, legal under international trade rules, that are designed to expand access to HIV/AIDS drugs.
According to a recent State Department report to Congress, Gore has led “an assiduous, concerted campaign” by “all relevant agencies of the U.S. government” — including the Department of State, the Department of Commerce, its U.S. Patent and Trademark Office, the Office of the United States Trade Representative and the National Security Council — to coerce South Africa into abandoning measures to make pharmaceuticals more affordable.
Why does Gore oppose sensible South African policies? Because this is what the pharmaceutical industry, led by its trade group, the Pharmaceutical Researchers and Manufacturers Association (PhRMA), wants him to do. The industry does not care too much about drug prices in South Africa or Africa. Because of the African continent’s poverty, sales are quite limited, and lower prices might actually increase industry revenues by spurring a much higher sales level. But the drug companies do fear thatsteps to lower prices in South Africa will generate pressure to lower prices in the United States and Europe.
Gore and the U.S. drug industry argue, incorrectly and insincerely, that South Africa’s Medicine Act violates international trade law, by permitting what is known as compulsory licensing and parallel imports.
Compulsory licensing enables countries to instruct a patent holder to license the right to use its patent to another party. This introduces competition in the market for the patented good, thereby bringing prices down. In the case of pharmaceuticals, compulsory licensing can lower the price of medicines to consumers by 75 percent or more.
Parallel imports involve imports of a product from one country and resale, without authorization of the original seller, in another. (The South African government, for example, might buy a drug sold by Bristol-Myers-Squibb at a lower price in France than the company charges in South Africa, and then sell it at the lower price in South Africa.) In the case of pharmaceuticals, where prices differ significantly by country, parallel imports can be a tool to enable developing countries to lower prices for consumers.
Under the rules of the World Trade Organization, compulsory licensing is permissible, so long as the government follows certain procedures to protect the interests of the patent owner, including the payment of reasonable royalties. Parallel imports are also legal under World Trade Organization rules.
Gore and the pharmaceutical industry know that the South Africans are playing by international trade rules. Indeed, when pressed by knowledgeable inquirers, U.S. officials are willing to acknowledge that — public claims to the contrary notwithstanding — South Africa’s policies are permitted by World Trade Organization rules.
Gore and the industry also know that the United States itself regularly issues compulsory licenses, for products ranging from pharmaceuticals to chemicals to computer chips, and from satellite to nuclear safety to clean air technologies.
As for parallel imports, the United Kingdom and several European Union countries have extensive trade in parallel imports of pharmaceutical drugs, a practice affirmed by the European Court of Justice.
But, U.S. officials say, the United States feels justified in demanding more stringent patent protection from South Africa and other developing countries than is required by the World Trade Organization rules — more even than the United States itself or European countries provide.
The Gore position is worse than hypocritical. Africa is confronted with a public health crisis of historical proportions. Of course South Africa and other countries should take steps such as compulsory licensing, legal under international trade rules, to expand the affordability of essential medicines. This is an emergency, and millions of lives are at stake.
Why should President Nelson Mandela and the South Africa government permit their population to be defenseless simply because Glaxo Welcome, Bristol-Myers Squibb and other multinational drug companies want the power to set prices for HIV/AIDS drugs — even for U.S. taxpayer-funded and government developed medicines — in Africa?
How should Al Gore be assessed if he cannot take time out from frantic political fundraising and today recognize the immorality of his government’s policy toward the South African people on this issue?
To contact Vice President Gore and ask him to stop bullying South Africa, call 202-456-2326.