Pretoria, South Africa-Few people noticed that the ground had begun to crumble under Big Pharma when, after the failed World Trade Organization talks in Seattle, Washington, the Clinton administration indicated that it would take note of the effects of its trade policies on healthcare in developing countries.

Multinational companies had hitherto been able to take the support of governments for granted when it came to policing intellectual property, but Clinton's move indicated a major shift in policy. Few noticed, because the rhetoric wasn't immediately matched by reality. In fact, the US government continued to pressure countries whose intellectual property protection seemed too weak. Then the new Bush administration, thought to be an unwavering ally of the pharmaceutical industry, indicated it would continue the Clinton policy.

That subtle shift of support has led to political shock waves, as the European Commission issues new proposals for increasing access to medicines in developing countries and as national governments refuse to back the 39 pharma companies suing the South African government in a Pretoria court. The developments are playing out under an intensifying media spotlight, in whose glare the industry looks more and more alone.

In Pretoria, Judge Bernard Ngoepe suspended the court action brought by the Pharmaceutical Manufacturers'Association of South Africa that sought to overturn the Medicines and Related Substances Control Act of 1997. Arguing that the legislation giving the government power to override patents is unconstitutional, PMA three years ago won an interim ruling that prevented the government from putting the legislation into effect-by sanctioning cheap imports or issuing compulsory licenses-until the case reached the Pretoria court.

PMA asked the court for a four-month delay but received only six weeks to respond to a brief submitted by Treatment Action Campaign, an AIDS advocacy group that successfully sought to become involved in the case as an amicus curiae, or friend of the court.

As protests outside the Pretoria courthouse, which led to a number of arrests, were matched in major cities throughout the world, TAC persuaded Ngoepe that it should be allowed to present evidence that pharma companies are putting profits before patients, calling the industry lawsuit "legally flawed and morally reprehensible." PMA lawyers fought the application, saying it was filed too late and added little to the government's defense.

But Ngoepe said public health was a central issue. "There are a lot of people-perhaps the entire nation, and many beyond our boundaries-who are interested in this matter." The judge added that TAC's submission would add the dimension of "the dead and the dying" to the debate.

Mirryena Deeb, chief executive of PMA, argues that the case has nothing to do with the price of AIDS medications in South Africa, where the government has consistently turned down manufacturers' offers of discounted medicines. Instead, Deeb says the suit aims to protect patent rights, which PMA claims the government is threatening to arbitrarily overrule.

When the case resumes, the companies will have to address each of the points in TAC's submission, which questions the secretive way in which manufacturers' price their products. Whether much of that information will emerge remains to be seen, but for the moment, Mark Heywood of TAC called the decision "a significant victory." TAC is not against patents, he says, but it is against the patent abuse that interferes with patient access to vital treatments.

Out in the Cold

One striking feature of the case is the way it highlights industry's isolation. The BBC reports that many AIDS sufferers in South Africa feel that "their government is beginning to fight for them." Meanwhile, the parents of the pharma companies involved find an utter lack of support from their home governments or from the European Commission.

In a letter to Nobel Prize-winning medical charity Med?cins Sans Fronti?res, the European Commission's Pascal Lamy was keen to declare European Union support for the protection of intellectual property rights to promote R&D and its policy to fully implement the Trade Related Aspects of Intellectual Property Rights agreement for all WTO members.

However, he also remarked that the TRIPS agreement contains enough flexibility for WTO members to protect public health concerns, including the discretion to issue compulsory licenses in health emergencies. The commission attached importance to the full implementation of TRIPS, but "it does not push WTO members to adopt intellectual property legislation that is more stringent than the agreement requires," wrote Lamy.

He further said the European Union would help developing WTO nations implement TRIPS upon their request. "As compulsory licensing is part of the agreement, the assistance will naturally comprise this element as well," Lamy wrote.

The message could not be more stark for Big Pharma. Not only will the European Commission countenance compulsory licensing, it will actively assist it when necessary.

Only two days before the South African court case opened, Lamy's colleague, development commissioner Poul Nielson, launched the commission's program for accelerating access to vital medicines. The five-year plan, based on proposals that emerged from last September's roundtable with the World Health Organization and UNAIDS, focuses on three outcomes:

-optimal benefit from existing interventions, services, and commodities targeted at the major communicable diseases affecting the world's poorest populations

-increased affordability of key pharmaceuticals through a comprehensive approachl increased investment in R&D of specific global public goods.

The commission intends to improve budgeting and financial management, planning, quality assurance, purchasing, tendering, distribution, and optimal use of pharmaceuticals. Its efforts to support quality-control labs will ensure that local production meets international standards. But the commission's talk of supporting developing countries in their efforts to "identify actions and promote informed dialogue" about pharmaceutical policies sets off alarm bells at the multinational companies.

Those alarms ring even louder in response to the European Union's plan to work with WHO to "further refine essential drug policies in favor of developing countries." Planned actions include the addition of key pharmaceuticals to WHO's essential drug list and the acceleration of marketing approvals for important medicines in developing countries. The European Union will also cooperate with WHO to provide key medicines in emergency situations.

Most controversial, however, is the proposal to establish a global tiered pricing system for key pharma products in the poorest countries. The commission says that a long-term commitment from manufacturers to supply those products at the lowest possible prices "would be a major contribution to the problem of access to affordable medicine." Although tiered pricing already exists in some developing countries, the commission says it should no longer be the exception but instead become the rule.

Reactions

The European Federation of Pharmaceutical Industries and Associations (EFPIA) did its best to present a brave front when faced with the European Commission's program-particularly its proposals to create incentives for research to develop treatments for diseases of the developing world and to enhance public-private partnerships. It also claimed to welcome the commission's plan to supply technical assistance to developing countries implementing TRIPS, though it seems unlikely the group was aware of Lamy's emphasis on compulsory licensing.

Tiered pricing is much more problematic. Currently, many pharma companies offer discounted products to developing countries. EFPIA supports that policy as long as there is sufficiently robust protection against parallel imports-and as long as it isn't compulsory. EFPIA officials argue that differences at local and regional levels in funding, distribution schemes, public procurement practices, and actual consumer needs mean that global rules for discounted pricing are inappropriate.

They object to the commission's call to strengthen local production capacity, warning that its benefits rarely reach those in need. EFPIA also opposes referring to HIV/AIDS and malaria medicines as "global public goods," arguing that pharmaceuticals today are essentially developed through private funding and that compulsory licensing is an ineffective way to improve access to medicines in poor countries.

Whether EFPIA can, or will, do much about it is a different matter. Public attention is tightly focused on the issue of access to medicines. Activists are beating the industry hands down in the public relations battle. Company initiatives to combat diseases-such as GlaxoSmithKline's partnership with the nonprofit Program for Appropriate Technology in Health to accelerate development of a malaria vaccine candidate-have been swamped in the tide of criticism.

The only good news surfaced in the United Kingdom, where Chancellor Gordon Brown announced a series of tax breaks for companies researching medicines and vaccines for the diseases of poverty. Details have yet to be finalized but could include tax relief of up to 50 percent in appropriate cases. That could be extended to UK companies' overseas activity if they commit to making products accessible.

There is also a new incentive for companies that make donations.

When medicines, vaccines, and associated medical equipment are donated to designated international aid agencies and public health authorities, their value will not be taxed. Ancillary expenditures, such as distribution and transport costs, will also be fully tax deductible.

In his budget speech, Brown also mentioned an international fund to provide affordable vaccines. "Britain is prepared to take a lead in establishing a new purchase fund for global health that will not only develop new lifesaving drugs but make existing drugs more widely available," he said.

Access to medicines has long been a marginal issue. And much of the industry would prefer that it stay that way.