Johannesburg - The withdrawal yesterday of the lawsuit by pharmaceutical companies against the government was hailed as a victory for developing nations.
But Manto Tshabalala-Msimang, the health minister, did not make a commitment to use antiretroviral drugs, saying widespread use was still unaffordable.
The Pharmaceuticals Manufacturers' Association, representing 39 companies, had challenged the Medicines and Related Substances Control Amendment Act in the Pretoria High Court. Drug companies have been fighting to protect their patents, which they say are a cornerstone of the research-driven industry. The African market accounts for only about 0,6 percent of global sales and industry always said it was a matter of principle.
The law that has been unfrozen now the court action has been withdrawn allows for the importation of drugs made more cheaply elsewhere, and mandatory generic substitution (using low-cost versions of out-of-patent products).
Some commentators asked how long it would be before people in other countries also questioned the price they paid for drugs. Some of the major drug firms traded down on Wall Street yesterday and GlaxoSmithKline was down almost 5 percent at 6.30pm local time. The share price of Aspen Pharmacare, the largest generics manufacturer in this country, rose 24c to close at R4,75.
According to the legislation, a pricing committee will be set up to gather information and advise the minister on a transparent pricing system for medicines.
Bob Armitage, the chief executive of MSD, the South African subsidiary of pharmaceutical giant Merck, said the industry had obtained the desired assurances of protection of patents and compliance with the requirements of Trips (trade-related aspects of intellectual property rights).
The pharmaceutical industry has agreed to pay the costs of all legal fees of the government but not the cost of the Treatment Action Campaign (TAC), the activist group supporting the government as a "friend of the court".