from: UK guardian Wednesday 7th March 01

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Pretoria pressures drug giants 
Special report: Aids

by Chris McGreal in Johannesburg and Sarah Boseley

The giant pharmaceutical companies fighting to protect their drug prices in South Africa's high court were yesterday ordered to reveal the closely guarded secrets of their business practices, including pricing policies. 

The case brought by 39 drug companies in Pretoria to abolish a law permitting the government to import cheap versions of their medicines was adjourned for six weeks to give the industry time to gather its material. 

The ruling by judge Bernard Ngoepe, on the second day of the hearing, will dismay the global industry, which has been notoriously secretive of commercially sensitive information. 

It is a major blow to the companies which already have a public relations disaster on their hands. There were demonstrations around the world on Monday, protesting that the industry was putting profits before the lives of people dying with diseases that are treatable in the west, such as HIV/Aids, and they appear to have lost international political support. The German government has joined the United States, European Union and World Trade Organisation in backing South Africa's right to introduce the laws, and calling on the industry to drop the lawsuit. 

There are likely to be discussions behind the scenes at individual companies over the wisdom of continuing the case, but the biggest, GlaxoSmithKline, yesterday made it clear it felt the stakes were too high to let it go. 

"I don't think any of us [the drug companies] want to be there. It doesn't help the industry and it doesn't help relations with the South African government," said a spokesman in London.

"But this law is open to interpretation that the patent system could be absolved in South Africa and that is a threat to the global patent system." The drug firms are claiming in court that legislation permitting the distribution of some imported generic drugs and other cheaper medicines breaches their patents and South Africa's constitution. 

Yesterday's court order came after the judge ruled that a group campaigning for wider access to treatment for South Africa's 4m HIV-positive people could make a submission as a friend of the court. The Treatment Action Campaign, which has lobbied vigorously over the price of drugs, said the decision gave a voice to the people who stand to gain or lose most from the case. It intends to bring testimonials from people suffering from HIV/Aids and evidence about the different prices set by the industry for its drugs around the world. 

The drug companies, represented by the Pharmaceutical Manufacturers Association (PMA), demanded a postponement of four months in order to prepare a response. The judge effectively called the drug companies' bluff. He agreed to put the hearings on hold for six weeks on condition the PMA responds point by point to the accusations in TAC's submission. 

Mark Heywood of TAC said the ruling was unprecedented. "It's a very significant victory. It's going to force them to answer questions they have never had to answer before." 

But the PMA's counsel, Fannie Cilliers, hinted that what he called the "patent protected research industry" might prefer to keep its secrets, when he told the court he did not think there was enough time to gather the necessary information from overseas. 

The drug companies appear particularly concerned by questions about their pricing policies. 

The manufacturers allege that excessive mark-ups by retailers is responsible for the high cost of drugs in South Africa's private health sector. 

But the pharmaceutical firms refuse to reveal the prices they charge chemists and other suppliers or how they compare to prices in other developing countries and the west. 

South Africa's stand has encouraged Kenya to follow suit. Yesterday, the health minister, Sam Ongerim, said the gov ernment will introduce legislation to permit the importation of cheaper generic drugs to treat Aids under a clause in international patent laws allowing countries to respond to a national emergency. 

"We cannot operate in a situation where we have an epidemic, a national disaster and being asked to keep on observing the international patent law," he said.