WOZA Internet (Johannesburg) - March 5, 2001

Johannesburg - Government is concerned that poor people's access to quality medicines is dependent on the goodwill of individual industry players. With the Medicines and Related Substances Control Amendment Act of 1997 - now tied up in a court battle initiated by the pharmaceutical industry - government wants to ensure its ability to provide medicines for all, for ever.

The latest SA Health Review 2000 - launched last Thursday - confirms that drug expenditure puts an unsustainable burden on state coffers as the HIV/AIDS pandemic claims more and more victims, and contributes most significantly to the inequality in access to healthcare between the private and public sector.

"Public sector sales are expected to make up 24%, which translates to R59.36 per person not belonging to a medical aid scheme. In contrast, the per capita expenditure on prescription drugs in the private sector would be R800.29," according to the Review.

The total value of drug sales is anticipated to be R8.25 billion, according to figures released to the SA Health Review Team by the Pharmaceutical Manufacturers Association.

Background to the court case Health Director-General Dr Ayanda Ntsaluba said in a press briefing at the weekend that he took part in the 1993 health expenditure analysis which found government was making a disproportionate allocation to drugs. This, says Ntsaluba, culminated in the now disputed Act.

In January 1998, Zuma met with the pharmaceutical industry, represented by the Pharmaceutical Manufacturers Association.

"The PMA was creating the impression that government willingly disrespects international trade laws, which is not true," says Ntsaluba.

He says government offered the PMA to take those sections of the Act it had a problem with and make a first formulation of the regulations based on the Act. Instead, he says, government received a court interdict.

"You must remember that the pharmaceutical companies are the ones that took us to court, and accusations that three years have been wasted since the Act was passed in November 1997 is their fault, not government's," says Ntsaluba.

Govt not willing to budge on policy issues He says that the policy issues at stake here are not negotiable. "We believe we operate within international laws and frameworks, which are by the way putting developing countries at a disadvantage," he says.

"We asked them to drop the court case and participate in a team to sort out 15c, but our offer was turned down." Ntsaluba was not prepared to answer iClinic's question of how much the court case was costing the SA tax payer.

He denied that government had not taken up any drug offers. "The main offer was that of fluconazole from Pfizer - we reached agreement last December, the MCC fast-tracked its registration and the first shipment will reach SA by the end of March.

"We also got an offer at the 13th International AIDS Conference in Durban last year from Boehringer Ingelheim, of nevirapine. This drug was already registered, but not for the use in mother-to-child transmission of HIV, so the offer was a bit premature - we can't accept a donation of an unregistered drug. The MCC has now approved it and the first shipment has arrived in SA.

"GlaxoSmithKline made an offer of AZT, but nevirapine is much cheaper," he says.

He says the PMA makes the argument that government has not even made a tender and is therefore not serious about antiretrovirals.

"This is just not true. For example, we have been on a tender with fluconazole - no one had responded with an affordable offer. AZT is also on tender, but still not affordable," he says.

He also referred to arguments that the Patents Act is an existing mechanism for ensuring affordable drugs but that it is underutilised for some unknown reason.

"The activation of the Patents Act can be done by the state or any citizen - the responsibility lies therefore with the public too. We are in discussion with the department of trade and industry abut it. SA takes a very strong point on access to affordable medicines," says Ntsaluba.

Government not 'killing the goose that lays the golden egg' He refutes PMA's argument that the Act "will kill the goose that lays the golden egg" - in other words, the alleged abrogation of patent rights the Act is said to be leading to will demotivate companies to continue spending money on research and development.

"We are not saying we don't recognise the importance of research and development. We are saying the benefits of science and technology should be used more to benefit the poor who need it most. This actually drives many individual scientists: to find treatments that will help the sick and the dying.

"The PMA can't claim they are a major investor in research and development - some of their R&D is subsidised by governments and universities," concluded Ntsaluba.

Analysis of the top 12 drug manufacturers in America in 1999 showed that their median percentage of revenue dedicated to research and development was 12,4%, whereas a median of 34,3% was dedicated to marketing and administrative costs. Chief executive officers of the top 10 firms averaged R80 million each in salaries in 1999.

After the court case . . .

If government wins, Ntsaluba says they will speed up the publication of regulations and the provisions of the Act will kick in as soon as possible.

"The provision of general substitution [of patent drugs with cheaper generics] is not going to be subject to long bureaucratic processes such as is the case with the registration of medicines.

"If we lose - and it is hard to understand why we should - we hope that the areas of problems in interpretation are clearly pointed out so we can correct them." Meanwhile, 5 000 sick South Africans will be alive at the beginning of the week-long hearing and dead by the end of it, according to Phil Bloomer of Oxfam.

"12 000 people will have become newly infected with the HIV virus during the same week, 1 400 of them babies. This is the catastrophe facing the people of South Africa." The agency notes that, during the same week of the court case, the five biggest companies involved in the trial will have sold R17.6 billion worth of medicines and made R4.44 billion profit.