Keep taking our tablets (no one else's)

The WTO's response to Africa's AIDS crisis is a chilling reminder of where power lies in the global economy.

Gregory Palast

IT would give me great pleasure to report, as did the New York Times this week, that Bill Clinton has saved Africa. That big-hearted lug will lend African nations $1 billion a year for AIDS drugs which - more joy! - the pharmaceutical companies have agreed to just give away at 75% off list price. But just when I thought I could announce Christmas in July, The Observer came into possession of a 12-page document from Argentina.

It appears to have originated in the Office of the United States Trade Representative in Geneva (which does not deny the document's authenticity). The official missive threatens Argentina for opening its borders to the drugs trade - not the fun stuff, but sales of legal, licensed medicines. If Argentina does not end its commitment to free cross-border trade in pharmaceuticals, said the Trade Rep, America would keep the nation on the Section 301 Watch List - a kind of Death Row for trading partners.

If you read the gospels of globalisation apostles Paul Krugman or Thomas Friedman, you could get the impression that the World Trade Organisation is all about ending tariffs and trade barriers. Only in your dreams.

In the real world, the WTO is the mechanism for privatising the tariff system. Once, countries protected their workers and local industry behind taxes at national borders. In the New World Trade Order, global corporations may demand levies against nations that sell or buy products outside the zones they have marked out by brand names and market segments. The WTO's penal system for prohibited importing and exporting goes under the psychedelic title TRIPS (for Trade-related Intellectual Property Rights).

Trip-ping, Argentina and Africa - it all fits together. The story begins with this un-fun fact: one in four people in black Africa is going to die of AIDS unless medicine arrives now. Luckily, Brazil, India and, most aggressively, Argentina, can make the drugs dirt-cheap and ship them to the dying. But US, British and Swiss pharmaceuticals giants howled out loud about the proposed cross-shipments.

The US trade cops, led by Vice-President Al Gore, backed Big Pharma and halted the life-saving plan - Nelson Mandela's pleas, Nobel Prize and flowered shirts notwithstanding.

Strings attached

Unfortunately for Gore the presidential candidate, his let-them-eat-aspirin policies resulted in his every campaign stop attracting packs of enraged homosexuals who hollered about his killing more Africans than Michael Caine in 'Zulu'. This did not make for good TV for Al. So his good buddy President Bill found a few billion to quell the restless natives.

However, the billions come with strings attached or, more accurately, chains and manacles. South Africa must buy 100% of the medicine from the USA and pay back all the cash at 'commercial interest rates'.

The US Trade Rep's billet-doux to Argentina is the supply side of this scheme to stop South Africa breaking the de facto embargo on free trade in pharmaceuticals. South Africa hoped to use a loophole in TRIPS that permits the import of patent drugs in extreme emergencies, even without the patent-holder's approval.

Initially, the US retaliated against South Africa by taxing some of its imports to the US - until the anti-Gore demos. The Trade Rep document suggests that the Clinton Administration will re-aim the sanctions missiles at Argentina, thereby avoiding the impolitic Mandela imagery while cutting off South Africa's supply at source. After an expected WTO show trial, Argentina's economy will be hung from a pole in Geneva as an example for India and Brazil, other potential exporters.

Maybe I'm not being fair. After all, TRIPS seeks to protect and compensate manufacturers for their risky investments and inventiveness in creating medicines such as AZT, Glaxo-Wellcome's anti-AIDS drug.

Glaxo was inventive alright, but not in discovering AZT. A Professor Jerome Horowitz synthesised the drug in 1964, under a grant from the US government's National Institutes of Health (NIH). A Glaxo unit bought the formula to use on pet cats.

Obstinacy, inventiveness and 'heart'

In 1984, an NIH lab discovered the HIV virus. The government lab urgently asked drug-makers to send samples of every anti-retrovirus drug on their shelves. NIH spent millions inventing a method to test these compounds. When the tests showed AZT killed the virus, the government asked Glaxo, as the compound's owner, to conduct lab tests.

Glaxo refused. You can't blame it. HIV could contaminate labs, even kill researchers. So NIH's Dr Hiroaki Mitsuya, combining brilliance, bravery and loads of public cash, performed the difficult proofs on live virus. In February 1985, NIH told Glaxo the good news and asked the company to conduct human trials.

Glaxo refused again. Here's where Glaxo got inventive. Within days of the notice, the company filed a patent in Britain for its 'discovery'. Glaxo failed to mention the US government work.

But Glaxo has a heart. The Anglo-American behemoth announced it would sell South Africa an AZT-based drug for only $2 a day per patient, more than 75% off the price charged in America and Europe. I called Glaxo USA to say thanks but, after a few questions, it became clear that the $2 price merely matched the Brazilian/Argentine prices.

Think about that. If $2 is the free-market price, Europeans and Americans pay 400% over the odds, price discrimination explicitly protected by TRIPS.

That's the funny thing about the WTO's expansion of so-called intellectual property rights. It is sold in the West on the slick line that those people, the dark, unindustrious tribes of the southern hemisphere, are trying to steal our inventions.

In fact, says expert Jamie Love of the Consumer Project on Technology in Washington, patients in the West have as much to lose as Africans under the new regime of thought ownership.

This came to Love graphically when Maude Jones, a 30-year-old London woman, called him begging help to obtain Taxol. The drug could have controlled her breast cancer, but her NHS region did not prescribe it because of its stratospheric cost.
There is no patent on Taxol. The US government discovered it. But Bristol-Myers Squibb, because it performed minor work calculating dosage levels, holds the intellectual property rights on dose-related data, even though the data was originally collected by government. Under Britain's data protection laws this gave Bristol-Myers Squibb lock-up control on Taxol in the UK for 10 years even without a patent.

Bristol-Myers Squibb takes no chances with its cancer monopoly. Taxol comes from the yew tree. While Western drug companies have long argued that rainforest trees and plants are theirs for the taking without paying royalties, Bristol-Myers Squibb obtained from Congress the exclusive right to harvest yew trees on US government lands, about the only place it grows on the planet. For these public assets the company paid nothing.

But Ms Jones paid. Ultimately, the company was shamed into offering her the medicine for free, if she moved to America. However, doctors concluded the offer was probably too late. As her family already faced bankruptcy, Maude (not her real name) phoned Love to say she had chosen to die.

From her death, Love hoped South Africans, Americans and Europeans would discover 'a helpful solidarity'. In AIDS and breast cancer, the stricken North and South share a horrific commonality as the new landless peasantry in the apartheid of intellectual property rights.

Gregory Palast is an investigative reporter and columnist with The Observer newspaper of London.
© Guardian Newspapers Limited 2000 

(Aug-Sept 2000)