Lotti Rutter lotti.rutter at mail.tac.org.za
Fri Feb 7 00:39:17 PST 2014

*Apologies for cross posting


500 activists from the Treatment Action Campaign (TAC) picketed yesterday
at the offices of the pharmaceutical company Merck, Sharp and Dohme (MSD)
over their involvement in the controversial PharmaGate plot. The plot aimed
to undermine and substantially delay South Africa's long awaited IP policy
- a policy that outlines several critical reforms to South Africa's
existing patent legislation. These reforms are essential to ensuring
continued and improved access to essential medicines for all who live in
South Africa.

Why is the PharmaGate plot unacceptable?
On January 16 the Mail & Guardian exposed a R6 million
pharmaceutical company plot, described by Minister of Health Aaron
Motsoaledi as 'genocide'. While calling the plot 'genocide' may have
been hyperbole, it helped put the spotlight on the urgent need to
reform South Africa's patent system to increase access to
life-saving medicines.

The PharmaGate plot went beyond acceptable lobbying practices.
Among others, it was proposed that a front organization called Forward
SA would be set up. Though Forward SA would by all appearances
be authentically South African - it would have an apparently
reputable person as its public face, it would in fact be run from the
United States. Similarly, the plot envisaged that 'independent'
research should be commissioned, but that this research should then be sent
to a PR agency in the United States to be manipulated to fit the objectives
of the plot. On both these counts, the plot explicitly set out to mislead
policy-makers and the South African public. This is both unethical and an
affront to our democratic values.

Extensive opportunity for acceptable lobbying
It has been six years since the Department of Trade and Industry (DTI)
began developing South Africa's IP policy. In that time the pharmaceutical
industry has had extensive opportunity to lobby the government through more
transparent and acceptable means than those outlined in the PharmaGate
plot. Early drafts of the IP policy from mid-2012 had already taken into
account pharmaceutical company submissions. Then. like all other interested
parties, industry had the opportunity to comment during the public comment
period from September to October 2013. We are also aware of a number of
face-to-face meetings between industry and officials from the Department of
DTI during the development of the policy.

There has clearly been sufficient public consultation on South Africa's IP
policy. It is now up to the DTI to rapidly finalise the policy. Whether the
current government can finalise a pro-public health policy, in line with
their Constitutional obligations, before the elections will be a test of
their commitment the Constitution and to improving the lives of all in
South Africa. Failure to finalise the policy before the elections would
suggest that the current administration have bowed down to foreign industry
pressure to delay the policy as outlined in the PharmaGate plot.

Why is a policy delay problematic?
The draft IP policy suggests a number of reasonable changes to
South Africa's outdated patent laws. None of these reforms will break
the patent system or do away with patents. On the contrary, each one
is entirely legal under international trade law. Countries like Argentina,
Brazil and India have already implemented many of these reforms in order to
protect the health of their citizens.

The draft IP policy, for example, proposes that South Africa
starts examining patent applications before granting them. It also
proposes that we must set the bar higher when deciding whether a
medicine deserves a patent. Implementing these two measures will ensure
better competition and that generic medicines can enter the market at
an earlier stage and drive prices down quicker. (See TAC's submission on
the draft policy for more detail). Ultimately, the faster the policy is
finalised, the sooner government and medical aids schemes can stop being
overcharged for many life-saving medicines.

Why focus on MSD?
Merck, Sharp and Dohme (MSD -the multinational pharmaceutical company Merck
& Co is known outside the United States as MSD) is the company most clearly
implicated in the PharmaGate scandal. Michael Azrak, Managing Director of
MSD East and Southern African and Head of the Innovative Pharmaceutical
Association of South Africa's (IPASA) intellectual property committee,
explicitly endorsed the plot in a leaked email sent to members of IPASA on
January 10th.

On Wednesday members of the executive of IPASA resigned as a result
of their involvement in this plot. In view of this we demand to
know whether Merck intends to keep Mr Azrak on in his position as
the Managing Director of MSD East and Southern Africa, given
his endorsement of the plot. We also want to know whether MSD stands
by their support of the plot. We cannot simply pretend the scandal
never happened. Just as we hold government to account, we must also hold
the private sector accountable when they act unethically.

In a memorandum handed over to MSD representatives at a meeting today
we demanded that:
- Individuals at MSD locally and Merck and Co in the United States explain
and clarify their involvement in the PharmaGate plot.
- MSD and Merck & Co state publically whether they support the
views expressed by Michael Azrak in the leaked e-mails and whether they
will continue to employ Azrak in his current position.
- MSD and Merck and Co state publically their role in identifying PAE, the
public relations company that produced the plot.

*For media enquiries please contact:*
Lotti Rutter
+27 81 818 8493
lotti.rutter at tac.org.za <mailto:lotti.rutter at tac.org.za>

Marcus Low
+27 82 962 8309
Marcus.low at tac.org.za <mailto:Marcus.low at tac.org.za>

*Notes to editors:*
- Only generic competition has consistently proven to bring drug prices
down to their lowest level, yet is often blocked in South Africa due to low
quality patents. Instead many medicines here
continue to be priced out of reach.
- For example, Trastuzumab to treat breast cancer costs over R550,000 for
annual treatment, higher than in India, the UK, Russia or
Belgium. Aripiprazole to treat depression, costs 35 times more than in
India and will remain under patent protection until 2033. Linezolid, one
of the only effective treatments for drug resistant TB, is priced at
R676 per pill, whilst it is available at only R25 per pill in
India. Imatinib, to treat cancer, is still 91% higher than the
generic equivalent in India.

- South Africa's current system for granting patents is a dream for the
foreign pharmaceutical industry. South Africa does not examine patent
applications to assess their validity, instead, as long as the appropriate
paperwork is filled out and fees are paid, the patent will be granted
automatically. As a result, South Africa grants more patents than most
developed and developing countries. In 2008, South Africa granted 2,442
pharmaceutical patents (only 16 of which were for South African companies),
whereas Brazil granted 273 patent applications between 2003-2008. Studies
show that South Africa grants 40% more patents than even the US and Europe
given the same set of patent applications.

*Lotti Rutter*
Senior Researcher
Policy, Communications and Research

Treatment Action Campaign
Tel: 021 422 1700
Cell: 081 818 8493
Skype: lotti.rutter
Twitter: @FixPatentLaw


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