Shaming the Powerful
San Francisco Examiner, September 29, 1999
Knight-Ridder/Tribune Media Services, September 22, 1999
"God has chosen the weak ones of the world to shame the powerful," says the New Testament. There are times when they can actually be shamed, and this can be an effective strategy for political and economic change.
Last week the Clinton administration, in response to growing public pressure, abandoned its efforts to prevent South Africa from lowering the price of AIDS medicines for its citizens.
The problem began two years ago when the Clinton administration, with Vice President Al Gore taking the lead, began to pressure the South African government on the issue of AIDS medicines. South Africa has an estimated three million people infected with HIV. Most of these people will die without treatment, and most of necessary drugs are currently priced far beyond the reach of the patients that desperately need them.
So the South African government passed legislation allowing for two policies that would make these drugs more affordable. First it allowed for what is called "parallel importing"-- that is, importing from countries where they are sold at a lower price than South Africa would pay directly to US manufacturers. Second, their action provided for "compulsory licensing." This would require the patent holders to allow domestic companies to manufacture certain drugs, in exchange for a royalty.
Both of these actions are legal under current international trade agreements. The Clinton administration therefore did not bring its case the World Trade Organization, which arbitrates such disputes. Instead it brought a number of pressures to bear on South Africa to rescind its actions-- and even to prevent the South Africans from speaking out on this issue at the World Health Organization.
The motivation here is easy to decipher. Patents on pharmaceuticals bring in some $75-80 billion a year to US drug manufacturers. These patents create a legal monopoly for the companies that own them, and they will go to great lengths to protect their monopolies and extend them to the farthest corners of the earth. One of the things they do is contribute a small percentage of their monopoly profits to US political candidates and parties, thereby enlisting the federal government in their cause.
There are several important lessons that this controversy brings into stark relief. The first is the moral issue. It is morally repugnant for our government to use its enormous political and economic clout to protect the international profits of drug companies, in a manner that costs the lives of millions of people throughout the world.
The second is the economic issue. The drug companies insist that the monopoly profits provided by patents are the only way to finance the necessary research and development. But we know that this is not true; historically some of the most important pharmaceutical breakthroughs (e.g. the vaccines for smallpox and polio) have been financed by government and non-profit institutions.
In fact this is true for many cancer treatments today and even some of the AIDS drugs in question here. From a purely economic standpoint, the patent system turns out to be a very inefficient means of financing this research. This is because it keeps pharmaceutical prices far above production costs.
To take just one example-- cited by Ralph Nader's Consumer Project on Technology to illustrate what is at stake here for both the drug companies and AIDS patients-- consider the drug fluconazole. It is used to treat a fatal form of meningitis that afflicts some 10-15% of AIDS patients in Thailand-- another country that our government has threatened on behalf of the pharmaceutical companies. When competition was introduced for this drug, its price dropped by 97 percent. The political embarrassment of allowing the world to see the size of these monopoly profits is very threatening to the economic and political power of the big drug manufacturers.
Lastly, the controversy illustrates the power of effective protest, led by the distinctively creative and media-savvy advocacy group ACT-UP. It was just a few months ago that they began to show up in thousands at the Vice President's campaign stops, shouting "Gore's greed kills."
ACT-UP could have chosen the easy route, teaming up with the drug companies and the politicians that they own, and been satisfied with government funding of AIDS drugs-- at any price-- for their American constituents. The taxpayer picks up the tab, and the pharmaceutical companies stay fat and happy.
Instead, in a remarkable and courageous show of solidarity with the 30 million people suffering from this deadly plague in poor countries, ACT-UP chose a head-on confrontation with some of the most influential of America's corporate and political elite. They shamed the powerful, and won.
Mark Weisbrot is co-director of the Center for Economic and Policy Research, in Washington, D.C. and president of Just Foreign Policy. He is also the author of the forthcoming book Failed: What the "Experts" Got Wrong About the Global Economy (Oxford University Press, 2015).