Cape Town — Cheaper Aids drugs may be on the horizon for South Africa as hopes rise of a negotiated settlement today in the Pretoria High Court battle between the drug giants and the government.

The case was set to resume today after a six-week break.

Altogether 39 international drug companies have been challenging the government's proposal to import cheaper generic versions of patented brand-name drugs already sold here.

But the public relations battle has begun to swing South Africa's way. Within the past month, the World Health Organisation, the European Union and France's National Aids Council have all come out in support of the government's position.

Doctors Without Borders, a group lobbying for cheaper HIV/Aids treatment, announced 250 000 individuals had signed a petition urging the companies to drop their suit.

"Options are being discussed among the participants," said Mirryena Deeb of the Pharmaceutical Manufacturers' Association of South Africa, in reaction to reports today of an impending deal.

She declined further comment before going to court this morning.

Jo-Anne Collinge, a spokeswoman for the Department of Health, said it was unclear whether negotiations would take place.

"Rumours and speculation have been making the rounds, but we will know within the first few minutes of the court proceedings what the future will hold."

She said the difficulty was that there were so many parties involved.

"Because there are a large number of parties we cannot say conclusively that all will negotiate.

"We are going there (to court) with the mindset that we might have to continue the case."

Collinge said celebrations were premature.

In return for dropping the case, the drug companies would be likely to insist that the terms of the legislation authorising generic substitutions be reviewed.

But a settlement would be a remarkable about-turn for the pharmaceutical industry, which earlier this week was adamant it would not drop the case.

The industry said the law threatened companies' intellectual property rights by giving South Africa's health minister sweeping powers to produce, or import more cheaply, patented medicines.

If the case were dropped, it would lay manufacturers open to competition.

The case was brought in 1998 in reaction to the passing of the Medicines and Related Substances Control Amendment Act, which allows for the parallel importing of drugs.

At the forefront of the battle to import cheaper Aids drugs is the Treatment Action Campaign's Zakkie Achmat who will be at court today.

Confident the drug giants will back down, Achmat said: "If it is true that negotiations will be taking place, it would be a major victory and one of the first of its kind."