A split emerged last night between the world's big pharmaceutical companies over whether to proceed today with a patent rights lawsuit against the South African government that has turned into an international public relations disaster.
Three of the world's largest pharmaceutical firms - Britain's GlaxoSmithKline, and Merck and Bristol-Myers Squibb in the US - broke ranks with 36 other companies who are party to the attempt to overturn a South African law that permits the government to import generic and other cheaper drugs to deal with health emergencies or where patented medicines are too expensive.
Last night the firms were negotiating with the South African government to reach a settlement before the Pretoria high court hearing resumes today after a six-week adjournment.
At the weekend, Nelson Mandela joined widespread international condemnation of the pharmaceutical companies' lawsuit by denouncing it as "a gross error".
"They are exploiting the situation in the developing world, because they charge exorbitant prices," he said. "This is completely wrong and must be condemned."
But Mr Mandela also said that the case could be settled through negotiation and said the South African government must "take responsibility for not doing sufficient work".
Sources close to the case said the breakaway drug companies were keen to withdraw from the lawsuit but were unable to see a way out without making concessions they are concerned could influence other countries following South Africa's lead.
The firms are particularly worried that a legal precedent might be established, allowing governments to declare individual drugs as too expensive and patents to be overridden worldwide.
If an agreement can be reached between South Africa and the three drugs manufacturers, it would exert enormous pressure on the other firms to pull out of the lawsuit and prove an important moral and legal victory for campaigners for wider access to anti-Aids drugs.
But the Pharmaceutical Manufacturers Association (PMA), in whose name the legal challenge was filed, said it would continue the action even if only a handful of drug companies wanted to do so.
None of the parties was willing to discuss the talks publicly, but an industry source said that Merck in particular had been deeply uncomfortable about the legal action for some time and was urgently looking for a way out. Last month, amid rising international criticism of the lawsuit against South Africa, the company said it would sell two anti-Aids drugs in the developing world without profit.
GlaxoSmithKline distanced itself by using its South African subsidiary as a representative in the lawsuit and has also offered cheaper life-saving drugs to the developing world. Bristol-Myers Squib said it would not oppose generic production of its drugs in Africa, and offered to sell its anti-retrovirals for $1 each.
Last night, the head of the PMA, Mirryena Deeb, said she could not discuss the legal case. The South African government is divided on the issue. While Thabo Mbeki and some of his ministers have portrayed the case as a legal crusade by the developing world against the exploitation of multinationals, there has been concern within the administration that it will deter foreign investors.
But a health department spokeswoman, Jo-Anne Collinge, said the government would not abandon its central claim to the right to import generic and other cheaper drugs to deal with health emergencies or where prices are defined as unaffordable. "Whatever the outcome, we expect to be able to implement this legislation," she said.
