“South Africa and the drug companies have changed forever,” say David Pilling and Nicol degli Innocenti.1 South Africa is to the drug pharmaceutical industry what Vietnam was to the U.S. military. Nothing will be quite the same again.

That, at least, is the view of Oxfam, the U.K. charity that has mounted a campaign for affordable medicines in poor countries.

With other activist groups, it has championed the cause of the South African government, which has been in a three-year legal tussle with the drug industry about national legislation making it easier to override patents.

Yesterday, the drug industry, exhausted by the vitriol that has been heaped upon it, threw in the towel.

In return, they appear to have won certain assurances from the government that it will respect the World Trade Organization’s Agreement on Trade Related Intellectual Property Rights (TRIPS),… [which they had earlier argued] allows the health minister to ignore patents without due process.

The threat of such wholesale disregard for patents—the lifeblood of the researchbased drug industry—has prompted it to take some extraordinary steps. Several companies,… have offered to sell AIDS medicines to the developing world at manufacturing cost, slashing the price of triple therapy from at least \($10,000\) in the West for an annual supply to about $600.

[This differential price strategy] carries several risks. Drugs may flow back into Western markets. The scheme also exposes the companies to political pressures in Western markets, where consumers may start asking for similar discounts…

[whereas the drug companies will]…

“need some markets in which to recoup our development costs.”

The article went on to raise questions about the way in which the government of South Africa was not waging an all-out war on AIDS, as follows. “The government doesn’t have a good record with HIV,”

says Glenda Gray, an HIV specialist in Soweto’s enormous Barawanath hospital.

“We have a president who questions whether HIV causes AIDS… and a program that raises awareness but can’t get condoms to people. It’s difficult to see how winning this court case would be translated into treatment.”

Questions:-

1. Is it legal, moral, or ethical for South Africa to override AIDS medication patents?
2. Is it legal, moral, or ethical for drug patent holders to resist?
3. If you were a senior executive in an affected drug patent holder, what solution would you suggest?