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Wednesday, 25 April, 2001, 17:44 GMT 18:44 UK
Can people power change big business?
The world's leading drug companies have dropped their legal action against the South African government over its plan to obtain cheaper versions of their brand-name Aids drugs.
The announcement is seen as a landmark victory for Aids activists in their campaign to secure medication for Africa's 26 million HIV carriers.
British aid group Oxfam, described it as a "comprehensive climbdown" by the drug companies.
Can activist pressure really win over powerful corporations? Could the case become a blueprint for future relations between pharmaceutical companies and governments in the developing world?
This debate is now closed. Your reaction:
People power is the only thing that will curtail corporate power.
In this country at least, our government only respects money and might. But in the end, the corporations may have the money, but we the people have the might.
Capitalists get profit by underpaying workers, so when mass protest like this succeeds, we are only taking back what is rightfully ours.
We can only do so much - march, petition, rally - but whether the companies will hear us, that's another question. Big drug corporations have allies in governments around the world, plus they have the money, so our meagre attempts at opposing them will not stop their ruthless profit seeking.
I don't see the third-world countries lining up to fund research into new drugs; so why should they expect to benefit "on the cheap" from research and intellectual curiosity funded by the first-world drugs-companies? Perhaps the South African government could pay back the European and US pharmaceutical businesses by letting them have a
few South African scientists free of charge?
These drug companies piggyback in a massive way off government funded research in almost all countries they operate. They wait for some basic research to be done, particularly by non-profit bodies like NIH or the CDC, and then quickly commandeer any future applications these findings might have in drug development. If they did the research from scratch, I might have some sympathy for their whining about profit margins. Since they don't, AND they spend ridiculous percentages of their budgets on cultivating a market for their drugs through advertising, I am far from sympathetic when some CEO's stock options lose value.
Additionally, if the drug companies did set up their pricing, distribution and operations networks to accommodate third world needs (low price, high volume), the profits realized might shut them up. Nobody seems to talk much about that possibility, because -- God forbid -- it would require a change in the way we do things right now.
One tends to wonder why people in their right senses would exalt the law relating to intellectual property rights (created by mortal man), and undermine the massive loss of human lives (who were created in the image of the immortal God). AIDS is eradicating the images of God and I see no reason why the poor and developing countries should not be saved from this scourge when means to do so are present. In this case I encourage the HUMAN rights activists to go on and defeat the EARTHLY big business. And, of course, they will do it.
Fintan Dunne, Ireland
I'm sick and tired of hearing the words profit and shareholders every time the western world is faced with humanity questions. Mind you, third world countries sell their products or raw materials such as coffee, cocoa, tea, tobacco etc at lip prices. For sure nobody talk about the loss our farmers incur, thereby remaining poor.
I am happy that life-prolonging drugs are allowed to be produced and imported by developing nations who can't afford the price. However, there is a lot to be done to curb the devastation of AIDS and other health problems in Africa. We got to teach people to use contraceptive and other important birth controls thoroughly. The poor economy of Africa cannot sustain the alarmingly increase in population rate unless something is done to teach people under family planning programmes. This is not only a question of getting life-prolonging drugs but also the economic catastrophes caused by high population growth and poverty.
Amanda Bradley, Seattle, USA
Is "Profit" a dirty word these days? Shareholders own a portion of a company, at a certain risk, in hopes for a return of investment. This is what keeps the business afloat and so the shareholders and economics of the company have to be the first priority.
It's not being insensitive to the patients - just factual.
This legislation can only be used in instances where the disease precipitates a national crisis, and anyone would know that cancer and the like could never qualify.
People who condemn this outcome just have no concept of the desperate situation in South Africa and other even poorer countries. Perhaps what we should ask ourselves is what secrets the pharmaceutical companies were so afraid of exposing to public?
Contrary to what Solomon Drury believes, profit is one of the biggest costs on a business. It does not belong to the company but to shareholders. In the case of the pharmaceutical companies, the amount of capital directed at R&D is tiny compared to what ends up in the shareholder's pocket. If a pharmaceutical business could reinvest all of what it generates into itself in terms of Research and Development, the world would be a much healthier place.
The question people have to ask themselves is, cheaper drugs now or better drugs always? If South Africa needs drugs at lower rates, why can't the government subsidise these drugs instead of setting a bad example for the developing countries in the world?
People are talking a lot about profits and how decreasing them will ultimately hurt research and development. While this may be true, keep in mind that pharmaceutical companies spend only 1-2 percent (in any case, single digits) of their profits on research and development. This may be a lot of money, but where does the other 95+ percent go...? People's pockets ie "shareholders" - but are they really the ones who should benefit from medical/drug breakthroughs? How about sick people? I think they could afford to be slightly less greedy and still have a strong, competitive R & D team... But unfortunately it is the people with the shares who have control over the situation; the people who need the drugs are pretty much at their mercy...
I accept that the drug manufacturers need to turn a profit in order to pay dividends to shareholders, which in turn keeps investment flowing and allows research to be underwritten, but that in itself seems almost irrelevant when the discrepancy in income between the users of the drugs in the West and those who need the drugs in Africa is such that we in the West are often earning more in a week than many African people earn in a year. The obvious objection to providing the drugs cheaply in the African market whilst charging enough to justify the research/advertising investment in the European/North American markets is that it might create an illegal trade in the drugs. I've bought over-the-counter medicines in Thailand before now for roughly an eighth of the price here in Scotland, yet there doesn't seem to be any underground network of grey-import aspirin pushers in my home town. This is a matter of life or (slow, painful) death for millions. If people power can't make a difference here, then I despair.
The euphoria over the South African decision is understandable, but a word of caution. The drug companies make profits. "Profit" covers not only dividends paid to share holders, but also research and development etc. If profit is reduced, the effect is most likely to fall on areas such as research and development, since shareholders will simply withdraw if the dividends become less than can be earned by investing elsewhere. However, more likely is that profit will be maintained by raising the price of other drug lines: i.e. a different set of customers will pay, that's all.
Talking about big business as if it is an "us and them" situation is wrong: Anyone in the West who holds a bank account or a pension is complicit here. These bodies are frequently the largest shareholders who pressure for profits. If we want to demonstrate true people power don't take to the streets to shout at policemen: shout at you bank managers instead! Ask what they are doing with YOUR money.
Consumer power is king in the world of capitalism. Sadly too many of the consumers lack the intelligence to realise this and follow advertisers like sheep, buying any garbage they care to plug at whatever price they care to charge, and for no reason other than they think that their neighbours will think less of them if they don't.
Timothy Jones, UK
While it is true to say that the people of the world protesting against the gross and cruel injustice and insensitivity of the drug companies, did manage to focus the world attention on this issue and thus put intense pressure on them, however the reason they backed down in this humiliating way, is simply because their dark secrets were about to be revealed if this process went ahead.
Those dark secrets are the assertion that they spend a fortune on some researches is a pure myth - most of the research done on some of the best selling drugs have been made by universities (sometimes in the most unethical manner), the companies do a good marketing job and just reap the profits! Had the process gone ahead they would have had also to show to the world their pricing policies! I personally feel it is a pity South Africa did not insist on the trial going ahead to expose just that.
But certainly, I agree fully that without the people taking a stand and forcing the issue, we would not be here today. Yes, Mary of Kenya "Power to the people!"
I think people need to get a dose of reality in this. Pharmaceutical companies have shareholders. These shareholders invest because of growth in the value of the shares and income from the dividends generated. Reduce the companies profits and dividends are reduced. A normal result of this is that the share price also tends to drop. Shareholders then desert the company and it starts a slow decline to oblivion. Companies need to make profits that ensure the shareholders stay, or they will simply cease to exist. As they do the research into new drugs etc., that simply means research will ultimately stop or be done by governments only. Also, those with pension funds will also see their pensions reduced on retirement as they are invested in just this sort of company.
The same applies for all companies. Before complaining about any company making excessive profits, remember that the wealth of every one of us is linked to this and if they cease to make these profits, our personal situations may change radically. Also, understand that there is plenty of competition in this industry, just like most other industries. Drugs cost a huge amount of money to develop and if we want it to continue, we have to accept that drugs companies must make good profits.
Because I trust big business as far as I can throw it, I wonder why they dropped their case against the Republic of South Africa. Maybe they know something we don't.
It is a shame that so many commentators on this page feel it is more important to protect some corporation's right to make exorbitant profits over the rights of a person that is fighting AIDS to have good drugs. The sole reasons for the development of new drugs should be the advancement of science and the human species as a whole. If that is impossible because it is "just not the way the world works" then we should change that - we can change the world for the worst, let's try and make it a better place for once.
How cheap are these drugs going to be? The vast majority will not be able to afford these "cheaper" drugs. This is the reality; a lot more is needed than this hollow victory.
The backing down of the drug companies in this South African case is great news. The people of South Africa have proved more than once that it is possible to defeat greed and injustice, hopefully the multi-nationals will learn to treat the poor and the sick with respect and sympathy.
Medical doctors take a commitment to protect human life. How is it possible that other stakeholders in the medical arena can merely concentrate their efforts on profit?
It does not do to rely too much on silent majorities - one loud noise and they are gone. I hope this is the loud noise that signals the beginning of a broad-scale fight against WTO-style corporate greed which values bottom-line profits more highly than human rights and human lives.
As a professional in this area, I believe that the euphoria will be short-lived, unless the secondary legislation required to carry out the 1997 law provides for remuneration of the pharmaceutical companies and judicial review of both the decision itself and the remuneration as required under Article 31 TRIPS. If this is not the case the pharmaceutical companies will lobby their governments to file a complaint at the Dispute Settlement Board of GATT and the matter will be dealt with there. Only then will it be clear whether the 1997 law will provide affordable drugs for Aids sufferers or not.
Alex Babeanu, Canada
Yes evidently! Let us use it more!
Will people power be able to develop drugs for the diseases that are ravaging Africa once the pharmaceutical companies stop doing research? If the companies are not allowed to profit from drugs derived from research, why do it?
If labour, suppliers, consumers, shareholders and public interest groups could be aligned to exert influence on offending corporations, then we would see much improved accountability. Sadly there are too few examples yet of people actually reaching for this sort of "economic democracy". It is sheer will and co-operation that are needed, not necessarily additional laws.
It is becoming increasingly important for people to be aware of what is really going on in the world, as national governments are losing power in the globalisation process. So pressure groups should make people conscious of the "hidden agendas" that often play a vital role in decision making. I think there is an enormous task here for education, which really ought to focus on "turning out" young people who not only know several languages thoroughly but have also developed a critical mind to counterbalance the numbing effect of the mass media.
In the past, from the days of Archimedes through to Leonardo de Vinci, Isaac Newton et al, scientific discoveries have been there for the benefit of all mankind. It is only in the last 100 years or so that this is changed.
Yes, and there are indications other than this landmark example like banning of cigarette adverts on many TV channels. The role of media is very crucial in empowering the activists
It ought to change big business! Government too. Popular protest has been an effective tool in the US for decades. It hasn't really caught on here yet (most Brits wouldn't turn up if it looked like rain) but the tide will turn¿
People power? it has been the will of the people for several years to buy cheaper and cheaper produce, this has led to the current foot-and-mouth crisis as well as many others. People power will have to change its attitude if they are to make any marked effect.
Globalisation means the nation state has less power whilst the people are increasingly becoming disconnected from the political process in many so-called Western multi-party democracies anyway. People rely on business more than business relies on people in the 21st century world.
Ideally, it should. And if the problem is highlighted and broadcast to such an extent, the company has no choice but to change their policies. Unfortunately for us, this happens rarely.
Solomon Drury, UK
South Africa has ignored Aids for years and not put in place the public health advice to prevent the spread of HIV that countries like Uganda have done. The South African President even claimed that the HIV virus does not cause Aids. So I will be surprised if beating pharmaceutical companies will do anything to reduce the spread of HIV. More likely it will create a thriving illegal export market back to Europe and the poor HIV positive in South Africa will still suffer.
Although the humanitarian need to provide affordable drugs to millions of sufferers, be it Aids or any other disease, is a laudable one, one wonders whether it truly outweighs the need to provide equal and fair intellectual property protection for all intellectual property owners - whether they be from the developed or developing world.
Activist pressure can, of course, defeat corporations - unrepresentative pressure groups conducting emotional blackmail almost always can. Unfortunately, it is Aids patients themselves who will be harmed by this activity, as the pharmaceutical companies on whom they depend will have far less incentive to engage in research and development into life-saving drugs.
John B, UK
Of course people power can change big business! Just look at the situation with China. K-Mart, a major US company, was told by its shareholders that as long as China was going to go down this route of holding our people captive, they had absolutely no desire to buy anything made in China. This posed a serious threat to the company.
Only where the reputation of the company, and therefore its profit and loss statement is at stake. Shareholders will always be more important to major corporations than public or governmental pressure.
Yes of course it can and the sooner more people realise this the better.
19 Apr 01 | Africa
SA victory in Aids drugs case
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