Overdue IP reform process crucial for healthcare in South Africa

Overdue IP reform process crucial for healthcare in South AfricaJoseph Stiglitz

By Luvo Nelani and Zain Rizvi, SECTION27

On 17 November 2017, at the University of the Witwatersrand, Nobel Laureate

Joseph Stiglitz

Joseph Stiglitz gave a lecture to a standing-room-only crowd. The lecture, entitled Intellectual Property and Societal Welfare, came as the Department of Trade and Industry (DTI) moves forward on reforms to South Africa’s intellectual property (IP) regime. In August, the DTI published a draft intellectual-property policy that contains a number of new measures to protect public health.

One of the world’s most influential economists, Stiglitz lauded the proposed IP reforms, noting that they reflected South Africa’s developmental needs. He urged the government to set an important precedent for other countries, and resist pressure to abandon the reforms.

In 2014, the South African media revealed a $600 000 plot by the US and European pharmaceutical industry to interfere with South Africa’s IP reform process. Reportedly, US pressure then delayed the policy.

Stiglitz, who once served as the top economist in the US government, pointed out examples of US hypocrisy. The US government has previously considered using the flexibilities permitted by international law to help its own citizens when necessary, but derails the efforts of other countries to do the same. Stiglitz noted how, at the peak of the anthrax crisis in 2001, the US government threatened to issue compulsory licences to increase access to an antibiotic.

To laughter from the audience, Stiglitz warned that South Africa faced another challenge in the current US President, Donald Trump. His recommendation: “Don’t normalise him – don’t give him concessions you wouldn’t give [another] person.”

Stiglitz also forcefully dispelled the notion that IP drives innovation. He highlighted the considerable evidence that poorly designed IP regimes may in fact hamper innovation, by restricting access to knowledge. In the most memorable anecdote of the night, he recalled a conversation with his fellow Nobel Laureates – acclaimed for their breakthrough advances in science – about the role of IP. Not one of them, he said, was ever motivated by IP.

Designing an appropriate IP regime is vital, Stiglitz noted, because it could have significant consequences for public health. He described how pharmaceutical companies use a range of tactics to exploit the IP system. One example is ‘evergreening’ – a method used by manufacturers to get an additional 20 years of patent protection on existing medicines through minor innovations, effectively blocking generic versions and keeping prices high.

The Professor of Economics was later in the evening in conversation with Dr Malebakeng Forere, an academic from the University, Marumo Nkomo from the DTI, a co-author of his recently published paper Innovation, Intellectual Property and Development, Arjun Jayadev and SECTION27. Umunyana Rugege, an attorney at SECTION27, noted that many of the reforms envisaged by Stiglitz were necessary, given South Africa’s constitutional obligations to increase access to healthcare services.

Since 2011, SECTION27 has been part of a coalition calling for South Africa to reform its patent laws. Known as the ‘Fix the Patent Laws’ campaign, it has been advocating for an IP policy that prioritises public health and increases access to medicines.

On 24 October, Fix the Patent Laws launched a report that analysed patent barriers to cancer treatment access in South Africa. The report found that only seven of 24 important cancer drugs were available in the public health system. Ten medicines unavailable in the public sector – most probably due to their cost – are available in India for a fraction of the private price offered in South Africa.

The report confirmed earlier research showing that South Africa grants large numbers of secondary patents on medicines often rejected in other countries – a critical factor driving the vast price differences between the same medicines in South Africa and India.

The Stiglitz lecture and later discussion served as an important reminder of the urgency of the IP reform process. Now, the DTI must urgently finalise and implement the draft intellectual property policy. Only then will access to medicines become a reality – and not simply a legal promise – for thousands of people in South Africa.