Copyright 2000 The Washington Post
The Washington
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May 21, 2000, Sunday, Final Edition
SECTION: A SECTION; Pg. A01
LENGTH: 3038 words
HEADLINE: A
Conflict of Health and Profit; Gore at Center of Trade Policy Reversal on
AIDS Drugs to S. Africa
BYLINE: Barton Gellman , Washington Post Staff Writer
DATELINE: CAPE TOWN, South Africa
BODY:
In the seaside presidential suite of
the Table Bay Hotel, Vice President Gore brought a warning last year for his
counterpart that was about as pointed as diplomacy permits between friends.
"I want to make you aware of the strong and growing domestic pressure
being brought to bear in Washington," Gore told Thabo Mbeki, then South
Africa's deputy president, in the Feb. 17, 1999, meeting, which
was conducted with note-takers present. Drug companies and their supporters,
outraged by a new South African law that threatened lucrative patent rights,
were encouraging Congress to take punitive measures. Already, U.S. trade
officials had placed South Africa on a "watch list" of
countries risking sanctions.
"I'm concerned that, without significant
progress toward a resolution, a single trade issue could overshadow our
bilateral relationship," Gore said, according to an authoritative U.S. account
of the meeting.
What for South Africa was an exploding
health emergency--with life-saving medicines priced out of reach of patients
with AIDS, among other diseases--the United States treated
mainly as a problem of trade. Pretoria wanted to import or manufacture
inexpensive generics; a $ 343 billion global industry, backed by Washington,
regarded that as theft of intellectual property. The issue
would follow Mbeki and Gore as they deepened their relationship, and pursued
common ambitions for higher office.
Today, as Mbeki begins his first
state visit to Washington since succeeding Nelson Mandela as president, South
Africa faces an AIDS catastrophe that U.S.
intelligence predicts could kill a quarter of its 40 million inhabitants. Gore,
after seeking common ground between South Africa and the
drugmakers, has broken with the pharmaceutical lobby. The Clinton administration
withdrew two years of objections to the new South African law in June, the same
week that Gore declared his intent to run for president and
AIDS activists began tormenting his campaign with showers of
printed "blood money" and banners charging "Gore's Greed Kills."
Why
AIDS has surged unchecked through sub-Saharan
Africa, with a death toll across the continent that now appears
certain to climb into the tens of millions, is a complex matter that specialists
blame on multiple failures--in the afflicted communities and nations, in
corporate boardrooms and in foreign governments that chose not to intervene.
The Clinton administration's campaign against South
Africa's Medicines Act was not the only reason, or the biggest,
why South Africans lack the AIDS drugs that are increasingly
allowing Americans and Europeans to live indefinitely with the disease. South
African officials fear that even cheaper AIDS drugs could break
their budget, and they raise questions about effectiveness and risks. Nor do
AIDS experts believe that medicine alone--absent vast
improvements in prevention and in the infrastructure of hospitals and rural
clinics--could halt the pandemic.
But the history of South
Africa's drug law and the American response shows how
traditional priorities of politics and commerce helped shape a global
environment in which a public health calamity went largely unaddressed. As
federal health authorities tracked the epidemic's course in
Africa, senior government policymakers remained strikingly
unaware of its exponential growth and projected toll. Inertia led trade
regulators to treat generic AIDS medicine on the model they use
for pirated music discs and computer games--as a threat to the profits of
copyright-holders, to be suppressed.
"You mean the U.S. Trade
Representative doesn't know the difference between Barbie dolls, tennis rackets
and AIDS drugs?" one senior health official recalls asking
incredulously during the interagency fight. "Well, the problem is, they didn't."
U.S. Trade Representative Charlene Barshefsky, in an interview, said
much the same thing. "Largely it was the activities of ACT-UP and the
AIDS activists that galvanized our attention [to the fact] that
there was an absolute crisis," she said. Until then, "I was certainly not aware
of this at all. . . . In years past, this [pharmaceutical] issue was treated
purely as a trade issue and an intellectual property rights
issue."
A Chance Encounter
James Love stewed
early last June aboard a commercial jet bound for Los Angeles but stuck on the
ground at Dulles Airport. A familiar blond head appeared over his magazine.
Tipper Gore had walked back from the first-class cabin to speak with the man in
the window seat next to Love. The man turned out to be Clark Ray, her campaign
chief of staff.
Love could hardly believe his luck. At the Consumer
Project on Technology, which he ran for fellow Princetonian Ralph Nader, Love
had been trying to get the vice president's attention for years. As early as
July 29, 1997--in the first weeks of U.S. intervention against South
Africa's generic drug law--he and Nader co-wrote a letter
urging Gore to "subordinate commercial concerns to broader public health
interests."
More than two years passed without a reply. Now Love had a
captive audience.
"I started off by saying, 'Look, this is kind of a
coincidence, but I'm working with a bunch of people who are going to be
torturing her husband over the issue of access to medicines,' " Love recounted,
referring to the planned campaign disruptions. "[Ray] said, 'What do you mean?'
I said . . . we were really angry about it and we had tried everything else."
In truth, Gore was not indifferent to the problem. More than a month
before Nader and Love wrote to him, and years before the protesters would dog
his campaign, the vice president began sounding the alarm about
AIDS to a reluctant South African government.
"South
Africa is in the beginning stages of a full-blown
AIDS crisis," he told Mbeki in June 1997, according to
officials familiar with records of their talk. The United States had "waited too
long" to address its own AIDS problem and it grew "beyond
effective containment." South Africa could avoid that fate,
Gore said, and Health and Human Services Secretary Donna E. Shalala had traveled
with him to offer assistance.
Gore and Mbeki were co-chairs of a
"binational commission" intended to boost the new South African government's
transition from apartheid to democracy. Contemporary government accounts of
their annual meetings portray leaders who bantered easily and used the forum to
air proposals, not grievances.
But for all Gore's concern about
AIDS, the administration he represented was lining up hard
against the South African effort to obtain generic, cheaper medicine. Beginning
in May 1997, drug industry heavyweights--Aldridge Cooper of Johnson &
Johnson and Harvey Bale of the Pharmaceutical Research and Manufacturers of
America, or PhRMA, the industry lobby--began writing to Barshefsky's office and
Commerce Secretary William Daley to denounce Pretoria's proposed amendments to
the Medicines Act.
Gore shared some of the drug industry's concerns. The
fruits of intellectual property are America's major global
export, and Gore had several close associates--former chiefs of staff Peter
Knight and Roy Neel, and adviser Anthony Podesta--who earned substantial fees
from the pharmaceutical lobby.
Although Gore would raise less campaign
money from drug companies than either of his opponents this year, former senator
Bill Bradley and Texas Gov. George W. Bush, he mined the industry for cash with
some success. In 1997 and 1998, Gore's political action committee raised $
51,000 in direct contributions from drug companies and PhRMA contributed another
$ 276,850 in hard and soft money to Democratic Party committees.
'An Influential Voice'
By the fall of 1997, Gore
weighed in on the generics law with Mbeki. The South African leader complained
in a working dinner at Blair House on Sept. 22 that drug companies often charged
South Africans prices many times greater than those elsewhere, a legacy of an
apartheid economy in which the wealthy white population was their only
meaningful market. The companies admitted, Mbeki said, that their "real problem
is that what South Africa does in this area is a precedent for
other developing countries." Gore, according to the U.S. government account,
urged Mbeki's continued "cooperation with concerned U.S. pharmaceutical
companies" to modify the new law.
The following summer, he spelled out
why.
"You know, Thabo," he said in his West Wing office on Aug. 5, 1998,
according to an authoritative account, "the American pharmaceutical industry . .
. exerts an influential voice in political circles."
"Yes," Mbeki
interjected. "All over the world."
Gore told Mbeki he was "prepared to
discuss parallel importing of medicines by South Africa," the
term of art for buying a product in a country where its manufacturer sells it at
lower cost. That practice, permitted under world trade rules, had been
vigorously denounced by drug companies whose profits depended in part on setting
widely disparate prices market by market. In return, Gore said, Washington would
insist on the right of approval of such purchases.
"This is a tough
one," Gore said, adding: "This issue has the potential to become a serious
problem. . . . We know the agreement we are proposing sets the stage for a
difficult sale to PhRMA. We are prepared to enter that fray and mix it up with
them because we believe strongly that this proposal best addresses their needs
for patent protections and people's needs for affordable medicines."
In
the year that followed, Gore's office and other federal agencies exerted far
more leverage on the South Africans than on the drug industry. Early in 1998,
the industry's local umbrella group filed suit against the Medicines Act in
South African courts. The principal U.S. interlocutor to the drug industry, who
declined to be quoted by name, said he asked PhRMA representatives what
conditions would allow them to accept parallel imports.
"They said no,
we really just want you to hold the line and continue to pressure South
Africa to terminate this law altogether," the trade official
said. Government policy toward the industry, he said, entered a holding pattern
of "watching the litigation" and "hoping it would settle."
As for Mbeki,
he did not reply to Gore on the spot. His government eventually rejected the
offer.
"Politically our view was, the [courts and the World Trade
Organization] can resolve this issue," Frank Chikane, director general of
Mbeki's office and his note-taker in the one-on-one meetings, said in an
interview. "We said, 'No, no, no, we believe we are correct. You sell medicines
to us here, the same product, labeled by the same company, but it's two times
more here than in Botswana. Why should we not go in and pluck up the cheapest
medicines we can?' The pharmaceuticals really wanted to strangle us on this, but
we maintained our position."
Growing U.S. Pressure
Congress, always sensitive to pharmaceutical concerns, pressed
the Clinton administration for still more action. Rep. Rodney P. Frelinghuysen
(R-N.J.) sponsored a successful effort to cut off aid to South
Africa until the State Department submitted a Feb. 5, 1999,
report on the government's "assiduous, concerted campaign" to repeal the South
African law.
Less than two weeks later came Gore's Cape Town warning to
Mbeki about "strong and growing domestic pressure."
"He was presenting
the U.S. concern because there is a substantive issue involved," said Gore's
national security adviser, Leon Fuerth. "It was never presented with an attached
threat. Mbeki knew there could be difficulties with this because of the way U.S.
laws are structured and the way Congress works."
Some senior members of
Mbeki's government felt otherwise.
"We put together a piece of
legislation, and of course the pharmaceuticals take us to court," Health
Minister Manto Tshabala-Msimang said in an interview in Pretoria. "What does
America do? America puts us on the blacklist, saying we are not responsible
trading partners."
Former ambassador to Washington Franklin Sonn, who
left the South African foreign service in 1999, said there was "a lot of
emotion" in the argument between the two governments. Sonn said he chaired a
meeting requested by U.S. officials that brought pharmaceutical representatives
to his embassy with then-Health Minister Nkosazana Zuma. "She was saying, 'I
cannot afford this, and if you don't want to talk about prices we will buy
elsewhere.' "
The Americans replied with such bluster, he said, that "I
had to say, 'Don't! Don't speak to me like that in my own embassy. You are not
scaring me.' "
The Showdown
Spring of 1999
brought a collision between the two-year-old U.S. trade policy and growing
opposition on two fronts.
Inside government, senior policymakers--Fuerth
and Gore among the earliest--began to focus in earnest on the stunning growth in
AIDS in the developing world. For the first time, internal
debates broke out on the implications of pricing anti-retroviral drugs out of
reach of a country where more than one citizen in five is infected with HIV and
the rate of transmission has not yet peaked. Outside government, African
American political leaders and AIDS activists converged on the
issue.
In its annual review of intellectual property
violators, the U.S. trade office--backed by the Commerce and State
departments--proposed in March 1999 to escalate the dispute with South
Africa to the "priority watch list." A step closer to formal
sanctions, that designation is regarded as punitive in itself because it sends a
no-confidence signal to foreign investors.
Gore's office combined forces
with the National Security Council staff and public health authorities to quash
that proposal.
By late May, Gore staff member James Babbitt, a career
Army officer specializing in African affairs, had entered negotiations with
South African embassy officials to find a formula for settling the dispute.
On June 10, Assistant U.S. Trade Representative Joseph S. Papovich met
with pharmaceutical representatives in a final effort to reach compromise
language. They held firm against any compromise on generics.
Four days
later, Fuerth's office presented to Barshefsky a settlement deal under which
South Africa would "reaffirm" its commitment to international
patent laws, and the United States would withdraw objections to the Medicines
Act.
The proposal sat unsigned in Barshefsky's office, with opponents
still lobbying her to reject it.
June 16 brought Gore's carefully
managed speech in Carthage, Tenn., announcing his run for the presidency. In
guerrilla tactics that "blindsided us completely," according to one senior
campaign official, AIDS activists infiltrated the crowd with
noisemakers and banners concealed in their clothing. They hooted their derision
for live television, and they repeated the performance the next day, and the
next.
"We let them know we were going to keep coming, in very, very
explicit ways," said Paul Davis of ACT-UP Philadelphia, who previewed the
activists' theme of "medical apartheid" for campaign and government officials.
By the time the disruptions reached the Hesser College gymnasium in New
Hampshire, future Gore campaign manager Donna Brazile plunged into the crowd and
asked Davis for his telephone number.
The same day, the long interagency
trade battle came to a halt. Barshefsky signed the settlement proposal, and on
June 21 Fuerth's office called the South African embassy seeking an appointment
with Ambassador Sheila Sisulu "as a matter of urgency," according to diplomats
there. Informed that the ambassador was out of town, Fuerth summoned the
political and economic counselors in her place.
Fuerth, citing Gore's
long efforts to settle the dispute, said in an interview that "we jolly well
engaged in this long before the vice president was criticized" on the campaign
trail. Those efforts were "moving towards closure at the same point the
demonstrations began," he said. "You could draw the conclusion that it was the
demonstrations that brought us to closure, and I'm not sure I can disprove that,
but it is simply not true. We did this for the right reasons."
When
campaign officials asked what was going on, "I told them what the situation
was," he said. "Nobody leaned on me to hustle this thing along."
Damage Control
On June 22, the
activists--including Davis, Love and Asia Russell of ACT-UP Philadelphia--had
back-to-back meetings at the White House and at Gore 2000 headquarters, then on
K Street.
Davis and Russell said Brazile took charge of political damage
control, orchestrating an exchange of letters--completed in the next three
days--in which Gore announced the change of policy to Rep. James E. Clyburn
(D-S.C.) of the Congressional Black Caucus. Brazile declined to speak on the
record for this article, but a campaign official speaking on her behalf said she
did no more than point out to the activists that they should seek their answers
from congressional allies such as Clyburn and the White House.
"You saw
the pressure that Vice President Gore was under in this election year," Sisulu
said. "It worked. The resolution, if it came as a result of that pressure, was
good regardless."
Earlier this month, Clinton signed an executive order
broadening and formalizing the agreement with South Africa to
include any country in sub-Saharan Africa that attempts to
regulate AIDS drugs as long as it meets the minimum
requirements of the World Trade Organization.
No such law is yet in
effect in South Africa, where the drug industry case remains
before the courts and generic AIDS drugs remain unavailable.
The health minister, Tshabala-Msimang, said of Washington's change of policy:
"That's what they say. I think they're not putting enough pressure on the
pharmaceuticals."
Gore's subordinates complain of the bitter irony that
they are blamed for a problem they took the lead to solve. Asked whether he had
any regrets about two years lost to the dispute, Fuerth replied: "I try to look
back as little as possible because of the necessity to look for enlightenment in
its own time."
LOAD-DATE: May 21, 2000
