Big Pharma may threaten to cut S.Africa investment in generics row

JOHANNESBURG Fri Jan 17, 2014 12:23am EST

JOHANNESBURG Jan 17 (Reuters) - Global drug firms may threaten to cut their South African investments as part of a campaign against Pretoria's plans to overhaul its intellectual property laws to favour generic production, documents seen by Reuters show.

South Africa is in the final stages of implementing a new law that would allow generic drugmakers to produce cut-price copies of patented medicines and generally make it harder to register and roll-over pharmaceutical patents.

The planned reforms will also close a loophole known as "ever-greening" that allows a drugmaker to make minor changes to an existing drug or discover a new use for it, and then register it as a totally new find.

A document, and an email from the head of intellectual property (IP) at a drugs industry lobby group, outline a $600,000 publicity campaign to mobilize local and overseas voices to say the changes are a wrong turn for Africa's biggest economy.

They also seek to ensure reforms are delayed at least until after elections expected in early May by suggesting that the changes will be politically damaging for South Africa's leaders.

"The world cares that South Africa is proposing to take a wrong turn in economic policy by weakening IP protections. And by cares, we mean both expresses compassionate concern and will take action by reducing investment," the document reads.

It was prepared by U.S.-based consultancy Public Affairs Engagement for the Innovative Pharmaceutical Association South Africa (IPASA), an industry lobby group. IPASA members include international drugmakers such as Sanofi, Baxter International, Pfizer and Novartis.

In an accompanying Jan. 10 email to dozens of executives from a wide range of drugs firms, Michael Azrak, the chairman of IPASA's IP committee, paints a picture of a concerted anti-reform drive.

"This mobilisation will occur through an energetic campaign, which will feel like a political campaign," he wrote. "Delay will provide time to develop a third stage of the campaign."

Azrak, who is also the southern and east Africa head of U.S. drugs group Merck & Co., declined to comment, referring queries to IPASA spokeswoman Val Beaumont.

She confirmed the authenticity of the document but said the proposals were still under consideration.

"No part of those proposals have been accepted. No part of that document has been implemented," she told Reuters.

A campaign would not be the first time drugmakers have clashed with Pretoria. A decade ago the industry was forced to climb down in a bruising battle with South Africa over AIDS drugs patents.

Under current South African IP law, pharmaceutical companies are able to register drugs as new finds without them being checked for their novelty.

Healthcare activists say South Africa's track record of approving drug patents - in 2008, it granted more than 2,400 pharmaceutical patents compared with fewer than 300 in six years in Brazil - shows the need for reform.

South Africa, which has the world's biggest HIV/AIDS treatment programme, is not alone in its attempt to rein in soaring drug prices by cracking down on ever-greening.

India's relations with Western drugs firms have deteriorated sharply since the government rejected patents on several medicines because they did not satisfy a patent "inventive" requirement.

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