Globalization, Pharmaceutical Pricing, and South African Health Policy: Managing Confrontation with U.S. Firms and Politicians

Abstract

Brewing since the advent of South African democracy in 1994 and promises of health sector transformation, an extraordinary drug war between President Nelson Mandela's African National Congress government and U.S. pharmaceutical manufacturers took on global proportions in 1998–1999. Within months of the passage of South African legislation aimed at lowering drug prices, the U.S. government quickly applied powerful pressure points to repeal a clause allowing potential importation of generic substitutes and imposition of compulsory licensing. At stake were not only local interpretations of patent law and World Trade Organization rules on Trade in Intellectual Property, but international power relations between developing countries and the pharmaceutical industry. In reviewing the ongoing debate, this article considers post-apartheid public health policy, U.S. government pressure to change the law, and pharmaceutical industry interests and links to the U.S. government, and evaluates various kinds of resistance to U.S. corporate and government behavior. The case thus raises—not for the first time—concerns about contemporary imperialism (“globalization”), the role of the profit motive as an incentive in vital pharmaceutical products, and indeed the depth of “democracy” in a country where high-bidding international drug firms have sufficient clout to embarrass Vice President Al Gore by pitting him against the life-and-death interests of millions of consumers of essential drugs in South Africa and other developing countries.