There’s a Precedent for Overriding Patents on Vital Medications

(Bloomberg Businessweek) --  
Pharmaceutical Manufacturers Association of South Africa v. South Africa
Case #4138/98 High Court of South Africa

The Origin

The idea of voiding patents on Covid-19 vaccines so poorer countries can have access to them—which President Joe Biden has proposed—sounds radical, but it’s been done before. In the 1990s, during the height of the AIDS crisis, one of the hardest-hit countries was South Africa. The government, frustrated that HIV/AIDS drugs were too costly for its citizens, passed a law in 1997 giving the state the right to import cheap generic versions without getting permission from the pharmaceutical companies that held the patents.

The Lawsuit

Furious at this assault on their intellectual property, 39 pharma companies sued, blocking the law from taking effect. Bill Clinton’s administration sided with the industry, with Vice President Al Gore even traveling to South Africa to argue on its behalf. In the suit, the industry claimed the new law violated the South African constitution. In the court of public opinion, it said the sanctity of patents is what allowed it to generate the money needed to discover the drugs in the first place.

The Trial

It wasn’t much of a trial. From the time the suit was filed in early 1998, the publicity had been a nightmare for Big Pharma, with AIDS activists and others taking to the streets to demonstrate against the industry. On the first day of the trial, March 6, 2001, thousands of demonstrators gathered outside the courthouse and marched to the U.S. Embassy. Big Pharma’s lawyers asked the judge for some time to reconsider their position.

The Settlement

Six weeks later, after extended negotiations with the government, the industry folded. According to the Guardian, it had come to realize not only that its stance was a public-relations disaster, but also that its legal arguments had almost no chance of succeeding. One government official told the paper that it amounted to “unconditional surrender” by the industry, which had been “shamed and humiliated.” Which goes to show that sometimes public opinion can trump litigation—something today’s vaccine makers should keep in mind.
 
• Did the law make a difference? Yes, but not because South Africa started importing generic HIV/AIDS drugs. Rather, the drug companies began offering the medicine, including new anti-retroviral drugs, to African countries, often for free.
 
• Is HIV still a problem in South Africa? Very much so. According to the United Nations, the nation has one of the highest HIV rates in the world: 17% of the population from the ages of 15 to 49 has HIV, with 72,000 deaths in 2019.
 
Nocera is a columnist for Bloomberg Opinion
 
Read next: A New Wave of Vaccines Is Coming, and They’re Not All Also-Rans

©2021 Bloomberg L.P.