The New York Times

Friday, September 10, 1999

Companies Reach Accord With South Africa Over AIDS Drug

By NEIL A. LEWIS

WASHINGTON -- Pharmaceutical industry leaders said Thursday that they had suspended a lawsuit against the South African government over the price of drugs to treat AIDS and other illnesses, a dispute that has led to protests against Vice President Al Gore at several campaign appearances.

The suit was a challenge to a 1997 law that was aimed at giving South African patients access to cheaper drugs like those for AIDS. Alan Holmer, president of an organization representing more than 40 major drug companies that said the law infringed on their patent rights, said he had received assurances from a senior South African official that the law would soon be changed.

Holmer, president the group known as Pharmaceutical Research and Manufacturers of America, said he was optimistic that the dispute would soon be settled.

The companies have been trying for two years to persuade the South African government to change the law. Holmer said that the South African Health Minister, Dr. Manto Tshabalala-Msimang, had given assurances that the bill would be redrafted next year. The law covers all drugs but the focus of the dispute has been on AIDS drugs because they are especially expensive and South Africa has been ravaged by the disease.

The 1997 law had two provisions aimed at bringing down drug prices. One sought to take advantage of a kind of gray market by allowing the country's health minister to bring in drugs from countries where they might be available for less, even though their manufacture might not have been licensed by the companies that held the patents.

The second provision, called compulsory licensing, would let the South African government license local manufacturers to make their own generic versions.

The pharmaceutical companies objected strongly, fearing that it would erode their patent protections. They have pushed for help both from Congress and the White House, even raising the possibility of economic sanctions against South Africa.

The complex trade issue has proved a problem for Gore, who had represented the drug companies' point of view in talks with South Africa.

He has been confronted at campaign appearances by protesters who selected him as a visible target. They have accused him of heartlessness toward people with AIDS in South Africa and chanted before television cameras: "Gore's greed kills." The vice president's advisers have been troubled by denunciations they call unfair.

Industry officials have said that the dispute has blocked efforts to find other ways to reduce the cost of AIDS drugs in South Africa.

An estimated 6 million of South Africa's 44 million people are infected with HIV, the virus that causes AIDS.