1998: Big Pharma versus Nelson Mandela

In February 1998, the South African Pharmaceutical Manufacturers Association and 39 mostly multinational pharmaceutical companies took the Government of South Africa to court, saying that its attempts to increase the availability of affordable medicines violated both the South African constitution and the TRIPS Agreement.
The legal action turned into a public relations disaster for the drug companies.  Despite initially having the support of the US (which withheld trade benefits and threatened sanctions), and from the European Commission, the international public outrage over the companies’ legal challenge against a developing country’s medicines law was so strong - and the firms’ legal position sufficiently weak – that the case was unconditionally dropped in April 2001.
The South Africa case was particularly significant because it showed how the flexibilities contained in the TRIPS Agreement, and their use for public health purposes, needed to be clarified.  Around the same time, the US filed a complaint against Brazil’s compulsory license provisions at the WTO.  Brazil’s highly successful AIDS programme had made great strides towards universal access to AIDS treatment by threatening companies with compulsory licences in order to bring drug prices down. The dispute was settled through negotiations without a WTO ruling.
Could governments use TRIPS flexibilities without attracting political or commercial backlash?  The question had to be resolved.
Last updated: January 2009
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