March 7, 2001

Staff Reporters of THE WALL STREET JOURNAL

PRETORIA, South Africa -- AIDS activists scored a victory against international drug companies by putting the suffering of AIDS victims back at the center of a landmark legal suit seeking to stop South Africa from importing low-cost vital medicines.

The campaigners' success came in the second day of the lawsuit when Pretoria High Court Judge Bernard Ngoepe allowed a local AIDS lobbying group, the Treatment Action Campaign, to join the case in support of the South African government's defense against 39 leading drug makers.

The hearing was then postponed for six weeks to give the pharmaceutical companies time to respond to TAC's arguments. Lawyers for the activists plan to describe to the court the high cost of AIDS drugs, the suffering of those too sick and poor to pay for the treatment they require, and the need to place patients' rights above patent rights.

The major drug firms and the South African Pharmaceutical Manufacturers Association, or PMA, a trade group, want to strike down the 1997 Medicines and Related Substances Control Act. They argue that the law infringes on intellectual-property rights, breaks international trade agreements and contravenes the constitutional protection of property rights by allowing the import and manufacture of medicines at cheaper prices than those offered by the drug makers.

The lawsuit has drawn widespread condemnation from human-rights activists around the world who accuse the drug companies of putting profits before people. The companies say the case isn't about the scourge of acquired immune deficiency syndrome, which ravages the victim's immune system, or drug prices, but about an industry's need to protect its patent rights. Judge Ngoepe on Tuesday said public health was also a central issue. "There are a lot of people, perhaps the entire nation and many beyond our boundaries, who are interested in this matter," he said.

The pharmaceutical companies are now facing not only a more difficult case but also a mounting public-relations predicament. But the PMA's chief executive, Mirryena Deeb, said the drug manufacturers cannot afford to drop the case. She said that while South Africa may represent less than 1% of world drug sales, the precedent of allowing a government to step on drug companies' patent rights would have far-reaching effects, beyond the questions of cost and crises.

"What's at stake here is more than just a narrow South African issue. It's about the ability of the entire pharmaceutical industry to protect its patents, which motivates it to innovate the development of new drugs," Ms. Deeb said.

Stephanus Cilliers, the PMA's lawyer, vehemently opposed the activists' request to be a "friend of the court" on the grounds that it was filed late and added little to the government's defense. But Judge Ngoepe said he thought the TAC application brought an important dimension to the case absent from both the drug companies' and the government's arguments. It was the dimension, he said, of the "dead and the dying."

AIDS activists and charity groups hailed the decision. "The pricing of HIV [human immunodeficiency virus] drugs will now be an integral part of this court case," announced Michael Heywood, the head of the South African Aids Law project and a member of TAC.

The drug companies say they believe the judge has prejudiced their case by allowing TAC to introduce a new legal argument letting the court "justify" the limitation of patent rights in the name of the greater public good. "It's a whole new ball game now," Ms. Deeb said.

Mr. Cilliers had contended that his clients needed at least four months to prepare a response to all the issues raised by TAC. To that, a visibly shocked elderly woman in the public gallery whispered, "But people are dying." Judge Ngoepe rejected the request, giving the firms until April 10 to file a final response. The hearing will resume on April 18 for one week.

Write to Robert Block at bobby.block@wsj.com