CORPORATE FOCUS: Sometimes, the Multinationals Lose

Sometimes, the multinationals lose.Last week, the United States government announced that it will stop bullying South Africa to abandon efforts to make essential medicines available to its population.Chalk up a win for public health -- thousands of lives may be saved as a result of the new U.S. policy -- and a loss for the pharmaceutical industry. The industry had relied on the U.S. Trade Representative to act as its proxy in pressuring South Africa to abandon policies that the drug companies believe to be contrary to their interests.As is almost always the case, this defeat of corporate interests is primarily attributable to one thing: citizen pressure.In this instance, the reversal of U.S. policy came as a direct result of a courageous and strategically savvy campaign conducted by AIDS activists.They forced the issue on to the national political scene and into the national media in June, when they interrupted Al Gore's announcement that he was running for president.Chanting "Gore's Greed Kills" and "AIDS drugs for Africa," the protesters dogged Gore at various other public events for a three-month period.Two million people die annually from AIDS-related causes, the overwhelming majority in the Third World, and the number is skyrocketing. Drug treatments that enable many people with AIDS in industrialized countries to survive are priced out of reach of all but a tiny number of HIV-positive people in the Third World. When South Africa and other Third World countries have sought to take measures to reduce the price of AIDS and other essential medicines, the U.S. government has threatened trade and other sanctions to block them.Apparently none of this was newsworthy for the major U.S. media.But the media did find that disruptions of Gore's speeches merited coverage, and so the vice president's staff quickly moved to make the protests stop.The protesters targeted Gore because he has co-chaired (along with current South African President Thabo Mbeki) the U.S.-South Africa binational commission, the vehicle through which the U.S. government applied its pressure on South Africa. They also picked Gore because they recognized that he was vulnerable to negative publicity.The result of the activist campaign was an announcement by the U.S. Trade Representative and the South African government that the U.S. government would cease pressuring South Africa on the issues of compulsory licensing and parallel imports. Compulsory licensing enables a government to authorize generic production of a product while it is still on patent, with royalties paid to the patent holder. Parallel imports involves imports of drugs retailed in one country for resale in another, so that the parallel importing country can benefit from lower prices elsewhere in the world.Through its Medicines Act, South Africa has sought to make use of these two tools. With as many as one in six South African adults HIV positive, AIDS drugs are a top candidate for compulsory licensing and parallel imports.Since compulsory licensing can drop the price of drugs by 75 percent or more, if South Africa is able to proceed with its plans (it still must resolve a domestic lawsuit challenging the law which was filed by dozens of multinational pharmaceutical companies), many people are likely to gain access to life-saving medicines who would otherwise go without.There apparently was no written agreement between the United States and South Africa, or if there was the two governments are refusing to release it, but it appears to represent a total U.S. capitulation. South Africa appears to have made no concessions, promising only to adhere to its obligations under the World Trade Organization (which permits compulsory licensing and parallel imports) -- a commitment it had already made repeatedly.As important as it is, this access-to-medicines victory is only partial, even leaving aside broader questions about maintaining adequate health care systems in developing countries, say, or finding a cure for AIDS.The U.S. agreement applies only to South Africa. It still remains for the U.S. government to declare that other nations can employ compulsory licensing and parallel imports without fear of repercussion.And there remains the matter of whether the U.S. government will license the patent rights it holds to essential medicines to the World Health Organization, which could then disseminate low-priced versions of the medicines worldwide.AIDS activists plan to raise these issues at demonstrations in Washington, D.C. on October 6.But for now, they are entitled to take a couple days and savor a tremendous victory over the powerful pharmaceutical industry.Russell Mokhiber is editor of the Washington, D.C.-based Corporate Crime Reporter. Robert Weissman is editor of the Washington, D.C.-based Multinational Monitor and co-director of Essential Action, a corporate accountability group. They are co-authors of Corporate Predators: The Hunt for MegaProfits and the Attack on Democracy (Monroe, Maine: Common Courage Press, 1999;

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