[Ip-health] Leaked Merck missive reveals deep drug, medical device company opposition to South African patent reforms

Jamie Love james.love at keionline.org
Tue Jan 21 07:59:52 PST 2014

This blog was published on our web site on Monday.  Jamie

Source URL: http://keionline.org/node/1908

New leaked Merck missive reveals deep drug, medical device company
opposition to South African patent reforms
James Love[1], January 20, 2014

KEI has obtained an email [2] sent out on January 10th, 2014, by Michael
Azrak, Merck's Managing Director for Southern and East Africa, that
illustrates the deep involvement of two dozen companies in the campaign to
undermine patent reform in South Africa. The Merck email, not public before
today, sheds new light on industry lobbying to undermine South Africa
patent reforms. (See KEI statement on the leak below).

The Merck email comes nearly 16 years after Merck and other companies sued
Nelson Mandela on February 18, 1998, to block implementation of 1997
amendments to the South Africa Medicines Act. [Text of 1998 complaint here
[3]], and less than a year after the Sundance screening of Fire in the
Blood [4], a documentary that focuses on the earlier opposition by big drug
companies to affordable generic HIV drugs in developing countries, referred
to by the Director of the film as 'the Crime of the Century'.

The Merck email relates to a recently disclosed lobbying and public
relations proposal by a US group named Public Affairs Engagement (PAE),
headed up by Ambassador James Glassman [5]. Glassman, now the head of a
Washington, DC based lobbying and public relations firms, is a former
Undersecretary of State for Public Diplomacy and Public Affairs, and the
former Chairman of the US Broadcasting Board of Directors, the entity that
directed all non-military US taxpayer-funded international broadcasting
including the Voice of America, Radio Free Europe and Alhurra TV. Glassman
was also the founding director of the George W. Bush Institute. Glassman
set out the campaign's objectives in a memo that was recently leaked to the
media. Among the targets of the PAE campaign were MSF, and the South Africa
based non-profit patient advocacy groups, the Treatment Access Campaign
(TAC), and SECTION27. In the PAE proposal obtained by the South Africa
Department of Health and the Mail and Guardian newspaper last week, Health
Minister Aaron Motsoaledi described [6]the proposal as genocidal conspiracy
of satanic magnitude:

Health Minister Aaron Motsoaledi has accused a group of multinational
pharmaceutical companies active in South Africa of conspiring against the
state, the people of South Africa and the populations of developing
countries – and of planning what amounts to mass murder.

"I am not using strong words; I am using appropriate words. This is
genocide," Motsoaledi told the Mail & Guardian on Thursday, in response to
a plan he described as a conspiracy of "satanic magnitude" – a plan he
called on all South Africans to fight "to the last drop of their blood".

The plan in question is a nine-page document obtained independently this
week by both the M&G and the department of health, blandly titled Campaign
to Prevent Damage to Innovation from the Proposed Draft National IP Policy
in South Africa.

After the PAE proposal was leaked, drug companies described the PAE
proposal as something that they had rejected. (See IPASA statement below,
for example.) But the email obtained by KEI illustrates the extensive role
and buy-in to the proposal by Merck, and the engagement by nearly two dozen
firms, including nearly all large pharmaceutical companies, but also
several companies in the medical device business, including Baxter and
General Electric, and the fact that budgeting for the campaign was approved
in December 2013.

For context, note that the PAE/IPASA/PhRMA activities are related to South
Africa's "Draft National Policy on Intellectual Property," including a
recommendation that South Africa institute a pre-grant and post-grant
opposition system for patents, as well new requirements for patent
examination (RSA now has a registration system, without an examination),
that South Africa exclude diagnostic, therapeutic and surgical methods from
patentability, and improve the statutory framework for compulsory
licensing. The policy is described in more detail here [7].

In the email, Merck official Michael Azrak said:

<=====start quote from email
As we agreed at the last Board meeting in December, we have moved ahead in
identifying a high calibre consultancy group to work with us. The group
selected is Public Affairs Engagement (PAE), a Washington DC based team led
by former US Ambassador James Glassman. This group was selected after a
detailed process where we received proposals form a number of agencies both
Local and International. The final selection was carried out in
consultation with PhRMA. . . .

Key Objectives of the Campaign

The overall campaign is aimed at delaying the finalization of the IP policy
by the Cabinet until after the 2014 election. . . .

Key elements of the Campaign

Mobilize voices inside and outside South Africa to send the message that
the proposed IP policy threatens continued investment and thus economic
well-being. This mobilization will occur through an energetic campaign,
which will fee like a political campaign. . . .

The total investment for this 5 month campaign will be circa $450K. PhRMA
will contribute $350K & IPASA will contribute $100K. In addition, IPASA
will be responsible for the remainder of IP activities in 2014, with a
reserve of $150K for any additional activities. So in total we will invest
approx. $600K in IP related activities in 2014. Our IPASA contribution will
be R2.5m (slightly less to what we were agreed to invest at the December
Board meeting).

I'm confident that this positive, forward thinking and proactive campaign
is what we need to bring balance back to the entire discussion around IP
and access to medicines. PAE have worked successfully with PhRMA in other
countries with an established track record.
<===== end quote from email

A list of the companies as recipients of the email include:

Johnson & Johnson
Merck group
Novo Nordisk

KEI statement on Merck email and industry lobbying against patent reforms
in South Africa.

"Nearly 16 years after Merck and 41 other applicants sued Nelson Mandela
and the South Africa government to block implementation of amendments to
its Medicines Law, Merck has emerged as a key figure in an industry effort
to block new reforms. We call upon Merck to either fire Michael Azrak,
Merck's Managing Director for Southern and East Africa, or have someone
higher up in the company take responsibility for this action, and explain
why Merck wants to use its power to stop South Africa and other countries
in the region from expanding access to medicine. Merck and others should
also stop lying about their involvement in this lobbying efforts. We also
call upon all of the other companies copied in the email to make public
statements about their involvement and future intentions, and stop hiding
behind the untruthful and discredited front groups and trade associations
that do their dirty works. General Electric, Baxter, and other medical
device manufacturers also need to account for their involvement." James
Love, Director, Knowledge Ecology International. +1.202.361.3040, email:
james.love at keionline.org

Here is the IPASA statement from January 17th, 2014.

17 January 2014

IPASA Statement on reports of proposed advocacy campaign

Innovative Pharmaceutical Association SA (IPASA)’s Chief Operating Officer,
Val Beaumont issued the following statement on Friday following media
reports about IPASA’s engagement of Public Affairs agency Public Affairs
Engagement (PAE):

“Innovative Pharmaceutical Association SA (IPASA) can confirm that it has
not engaged the consultancy PAE to lobby on intellectual property or any
other matter in South Africa. PAE submitted a proposal for a campaign,
which was reviewed and subsequently rejected by IPASA members, and no
payment or pledge has been made in any respect.

As an industry association that represents the views of multiple
stakeholders within the Pharmaceutical Industry, IPASA regularly engages in
advocacy activities on critical policy issues. The draft IP Policy is a
matter of vital importance to the future of the healthcare sector in our
country and to all other innovative industries in South Africa. IPASA has
participated in the DTI’s public consultation process and has made a
written submission to the Department of Trade and Industry with respect to
the draft national IP policy published last year (A copy of IPASA’s
submission to the DTI on the draft policy can be found here).

As stated in our written submission to the DTI – IPASA supports the broad
objectives of the draft national policy on IP. A number of the
recommendations outlined in the draft national policy relating to health
are already possible through existing legislation. These include mechanisms
for both compulsory and voluntary licensing and parallel importation. IPASA
has raised questions in the submission on how such existing legislation
will be integrated under the proposed policy framework.

Innovative medicines from our sector have contributed significantly in
improving healthcare and we are committed to working with government into
the future.”

Issued by

Val Beaumont

Chief Operating Officer: IPASA
Mobile: 082 828 3256
Landline: 011 781 3256
Email: val at ipasa.co.za [8]


IPASA represents 26 leading pharmaceutical companies who are dedicated to
exploring, developing and bringing innovative, quality medicines to the
South African market. Only companies that conduct their own research and
development qualify for membership.
IPASA works to promote:

- A patient-focused healthcare system with universal access to quality care;
- An environment conducive to investment, continued development and
sustainability of the pharmaceutical industry;
- Respect for and protection of intellectual property rights;
- Ethical conduct and practices; and
- Adherence to the Code of Marketing Practice.

On January 18th, 2014, The Fix the Patent Laws campaign site published the
TAC, SECTION27 and MSF reactions to the PharmaGate revelations [9].

The TAC statement from January 18th, 2014 said,

“The Treatment Action Campaign is outraged over what appears to be a covert
and well-funded plan from the foreign pharmaceutical industry to delay an
essential law reform process in South Africa. It takes us back to the turn
of the century when 39 pharmaceutical companies took President Nelson
Mandela and the South African government to court to try to stop
legislative reform to improve South Africa’s ability to access affordable
life-saving medicines. Now, just weeks after his death, foreign
pharmaceutical companies are coordinating another major attack on this
We call for the urgent finalisation and release of the Department of Trade
and Industry’s long awaited Intellectual Property Policy. Any further
delays are unacceptable and will have far reaching impact on the provision
of public health. We will not allow foreign industry to derail this
national process, especially in such a secret and underhanded way.The TAC
fought before and we will fight again now to protect the Constitutional
rights of all people in South Africa.”

For media enquiries please contact:

Vuyiseka Dubula – TAC General Secretary +27 82 763 3005
Lotti Rutter – TAC Senior Researcher +27 81 818 8493 lotti.rutter at tac.org.za[10]


SECTION 27 said,


SECTION27 condemns the action taken by pharmaceutical companies to
undermine the Draft Intellectual Property Policy process that is currently
underway in South Africa. SECTION27, together with its partners has been
calling for reforms to the IP regime in line with the constitutional right
to health care services for many years. The DTI’s draft policy takes bold
steps to address the negative consequences of the current patent regime for
access to health care services, with its proposals to amend laws which act
as a barrier to improved access to medicines in South Africa.

The proposal by the US company Public Affairs Engagement (PAE), which is
reported on in the Mail & Guardian today, shows that the pharmaceutical
companies whose members make up the Innovative Pharmaceutical Association
of South Africa (IPASA) are seeking to undermine the progress being made to
protect public health through covert and anti-democratic actions, including
buying ‘independent’ research from their R6m pot. The PAE proposal uncovers
an agenda to interfere with a democratic legislative process in order to
protect profits not only in South Africa but in the rest of the developing
world as well as to “push back” against the civil society alliance of TAC,
SECTION27 and MSF which has led on this issue in South Africa. It is
critical that all progressive activists, academics, business, regional
institutions and governments across the developed and developing world
speak out against such underhanded tactics by these companies.

SECTION27 is having discussions with our partners about the revelations and
their implications and will issue a detailed statement early next week.

Please contact Umunyana Rugege on 011 356 4120 or via email to
rugege at section27.org.za [11] for comments.


MSF said:


Doctors Without Borders (MSF), as part of the Fix the Patent Laws campaign
applauds South African health minister Aaron Motsoaledi for speaking out
against a multinational pharmaceutical coalition and their intent to delay
reforms of the country’s intellectual property (IP) laws, through a
deceptive internationally bankrolled lobbying campaign. (Mail & Guardian:
Motsoaledi: Big pharma’s ‘satanic’ plot is genocide)

“To have foreign companies spending R6m to dissuade government from pushing
legislation that promotes access to more affordable medicines is
outrageous. The minister is right to take a firm stand against
pharmaceutical companies that seek to protect their profit margins at the
expense of ordinary South Africans. The government is bringing national law
in line with international norms, so they have the ability to take action
when inflated prices put crucial medicines out of reach,” said Julia Hill
of Doctors Without Borders (MSF).

Reform of South Africa’s IP laws is long overdue. Today South Africa’s
patent system already benefits international pharmaceutical companies by
granting an excessive number of patents, compared to both developed and
developing countries. South Africa remains a net importer of pharmaceutical
products, to such an extent that it’s the 5th biggest contributor to our
trade deficit. Changes to facilitate generic production would have a more
positive economic benefit.

“The draft IP policy includes reforms that are not radical. For instance,
the proposed patent examination system would reward truly innovative
patents and weed out frivolous applications,” said Hill.

The Department of Trade and Industry (DTI) is responsible for finalising
the IP policy, based on recommendations received during a public comment
period on a draft policy late last year.

The DTI has so far shown great fortitude in emphasising balance between
interests of business and the government’s Constitutional obligation to
protect public health. With the support of the Department of Health we
trust the DTI will continue to withstand drug industry pressures, and make
every effort to prioritise rapid finalisation of the IP policy, inclusive
of public health safeguards.

For more information, please contact
Kate Ribet, Media Liaison Officer, MSF SA
kate.ribet at joburg.msf.org [12] | 079 872 2950


Professor Brook Baker, Senior Policy Analyst, Health GAP wrote a trenchant
analysis of the PharmaGate revelations which can be found here [13]:
http://www.fixthepatentlaws.org/?p=830 [13].

Note: In 2009, I co-authored the following article with James K. Glassman,
opposing 12 years of exclusive rights in test data for biologic drugs.
Don’t Kill Competition for High-Tech Drugs [14], the Hill, September 9,

Update: TAC has issued a statement about the Merck email. Excerpts from
TAC's January 21, 2014 statement are here:



Lotti Rutter, January 21, 2014.


The leaked e-mail shows that IPASA lied about the extent of their
involvement in the PharmaGate plot. The available evidence strongly
suggests that they would have proceeded with the plot had its contents not
been leaked and had the Mail & Guardian not contacted them for comment. We
consider the lies told by IPASA to be an attempt to distance themselves
from the scandal and to minimise the damage to their reputation.

We call on individuals at Merck, IPASA, PhRMA and all member companies of
IPASA and PHRMA to explain and clarify their involvement in the PharmaGate

We call on Merck to 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.

We call on IPASA to state whether they will replace Azrak as the Head of
their Intellectual Property Committee.

We ask the members of IPASA whether they will maintain Val Beaumont as
Chief Operating Officer, given that she has misled the South African public.


Source URL: http://keionline.org/node/1908

[1] http://keionline.org/user/4
[2] http://keionline.org/sites/default/files/merck-email.pdf
[3] http://www.cptech.org/ip/health/sa/pharmasuit.html
[4] http://fireintheblood.com/
[5] http://publicaffairsengagement.com/who-we-are/
[7] http://www.thedti.gov.za/invitations/36816_4-9_TradeIndustry.pdf
[8] mailto:val at ipasa.co.za
[9] http://www.fixthepatentlaws.org/?p=823
[10] mailto:lotti.rutter at tac.org.za
[11] mailto:rugege at section27.org.za
[12] mailto:kate.ribet at joburg.msf.org
[13] http://www.fixthepatentlaws.org/?p=830
[14] http://www.rollcall.com/news/-38298-1.html

James Love.  Knowledge Ecology International
http://www.keionline.org, KEI DC tel: +1.202.332.2670, US Mobile:
+1.202.361.3040, Geneva Mobile: +41.76.413.6584,   twitter.com/jamie_love

More information about the Ip-health mailing list