Affordable Medicine

Dispute between aids activists and al gore proves grassroots action works!

The international AIDS crisis has hit especially hard in South Africa, where 3.2 million people are estimated to be HIV-positive. At the prices charged by American pharmaceutical companies, one year’s worth of AIDS medicine can cost roughly twice the average yearly income. Faced with a public health disaster, the South African government amended its Medicines and Related Substances Act to include provisions permitting the compulsory licensing and parallel importing of AIDS medicines. The U.S. government responded with threats of trade sanctions.

What is compulsory licensing?
A government pays royalties to a patent holder, and permits a third party to produce a patented good. This introduces competition into the market and can lower the price of medicine by 75% or more. Its specifically permitted under Article 31 of the World Trade Organization’s (WTO) Agreement on Trade Related Aspects of Intellectual Property Rights, known as the “TRIPS Agreement.” It is a common practice among WTO Member countries, including the U.S.
What is parallel importing?
It is the import of a product from one country, and then the resale into another country. Drug prices vary widley in different parts of the world, so the savings can be dramatic. The practice is allowed under Article 6 of the TRIPS Agreement. Like compulsory licensing, it is commonly practiced by WTO Memeber countries. For a more thorough explanation of the legality and use of these both compulsory licensing and parallel importing, click here.

What was Al Gore’s role?
Vice President Al Gore is the U.S. Chairman of the United States/South Africa Binational Commission (BNC), which oversees economic diplomacy between the two nations. He was therefore responsible for the actions of the U.S. government in this particular trade dispute. According to a State Department report released Feb. 5, 1999, the Office of the Vice President was waging an “assiduous, concerted campaign” along with “all relevant agencies of the U.S. government” which included the Office of the U.S. Trade Represetative, the U.S. Patent and Trademark Office, and the State Department, to prevent the compulsory licensing and parallel importing of AIDS drugs in South Africa. South Africa was placed on the Trade Representative’s “watch list” for trade violations and made to undergo and “out of cycle review.” Tariff reductions were linked to the repeal of laws allowing medicine access. In one case, South Africa was warned that the mere act of discussing compulsory licensing at an international summit would be considered an illegal trade barrier.

What action was taken?
When Vice President Gore announced his candidacy for President in Carthage, Tennessee, AIDS protestors were waiting. From that day on, he was heckled again and again at campaign stops. The press began to catch on and publicize the issue. Here is Arianna Huffington’s story on the topic. As a candidate, he was especially vulnerable to the attacks. On September 17, the U.S. and South Africa reached an agreement where the U.S. pledged to sto interfering with South Africa’s efforts to implement compulsory licenses and parallel imports of AIDS drugs.