Big Pharma's Days in Court - Oxfam and the Campaign to Bring Affordable HIV Treatment to South Africa

AIDS has now been the scourge of sub-Saharan Africa for a generation. For many activists, the main villains in handling the crisis in much of the developing world are the big pharmaceutical firms, long accused of putting the pursuit of profit far ahead of any humanitarian concerns. Associate Prof. of Marketing Jill Klein and Paul Dubrule Chaired Prof. in Sustainable Development Ethan Kapstein detail how one of the world's most important non-profit NGOs, Oxfam, joined forces with South African activists to take on pharmaceutical behemoth Glaxo. The 2001 court case was a major test for advocates of more affordable imports of the anti-retroviral drugs essential for tackling AIDS.

by Ethan Kapstein,Jill Klein
Last Updated: 23 Jul 2013

A survey published in March 2004 shows that South Africans spend more time at funerals than they do having their hair cut, shopping or having barbeques. It found that over twice as many people had been to a funeral in the past month as had been to a wedding. It is estimated that about 600 people in South Africa die of HIV-related illnesses each day.

Africa Policy e-Journal

AIDS has now been the scourge of sub-Saharan Africa for a generation. South Africa's particular tragedy has been blamed on a number of social and cultural factors, including the gradual breakdown of most forms of legitimate authority during the final years of apartheid. But the current government's approach to AIDS treatment has also drawn the ire of activists around the world. The current president, Thabo Mbeki, even publicly doubted the connection between HIV and AIDS early in his term.

For many AIDS activists, the main villains in handling the crisis in much of the developing world are the big pharmaceutical firms, long accused of putting the pursuit of profit far ahead of any humanitarian concerns. The World Trade Organisation has often been accused of latently representing the interests of "Big Pharma", primarily through the Trade-related Aspects of Intellectual Property Rights regime (TRIPS). During the 90s, many developing nations had agreed, with varying levels of reluctance, to adhere to WTO directives with respect to TRIPS. But in 1997, Pretoria's New Medicines Act was seen by many pharmaceutical firms as a clear violation of both TRIPS and the country's own patent laws.

Associate Prof. of Marketing Jill Klein and Paul Dubrule Chaired Prof. in Sustainable Development Ethan Kapstein detail how one of the world's most important non-profit NGOs, Oxfam, joined forces with South African activists to take on pharmaceutical behemoth Glaxo. The 2001 court case was a major test for advocates of more affordable imports of the anti-retroviral drugs essential for tackling AIDS. The Oxfam-led Cut-the-Cost campaign of the late 90s is a remarkable example of the affect such an organisation can have in corporate social responsibility issues -- in this case, one whose influence has come to extend far beyond South Africa's borders.

The authors take pains to consider all sides of the main issues in this case. Glaxo's position had been that tiered pricing systems, lower prices and other LDC-friendly (least developed nation) measures showed them as far from the heartless parasites they were portrayed as by their detractors. Glaxo had even made several offers of lower-priced retroviral treatments to the South African government, to no avail. But for many activists, the most critical issue was the newness of most of the more effective drugs, meaning they were fully protected by international patents.

While covering the backgrounds and activities of many players in the South African scenario, the authors focus on the issues surrounding the high-profile 2001 lawsuit involving several foreign pharmaceutical firms, challenging the new patents law.

Seizing the opportunity to publicise the AIDS in LDC issue, the Cut the Cost Campaign was given the full support of Oxfam, who saw Glaxo as the best first choice in what they intended as a "sequenced roll-out" of targeting Big Pharmas. The national manufacturers' association, with the active support of the US government, was massed on the opposing side. The case concludes with details on the trial - the first in the country to gain widespread international media coverage - including a major decision taken by Pretoria that both surprised and delighted many AIDS campaigners.

INSEAD 2003

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