Johannesburg — Thirty-nine leading pharmaceutical companies have dropped their court challenge to prevent the South African government from importing, manufacturing or licensing cheap copies of their patented medicines - including AIDS drugs.
This legal landmark could be a breakthrough in getting treatment to millions of people living with HIV/AIDS in South Africa and other developing countries.
A lawyer for the drug firms, Fanie Cilliers, told Judge Bernard Ngoepe and a packed High Court in the capital Pretoria, "There's a consent of all the parties to simply ask Your Lordship that the application has been withdrawn and the applicants have offered to pay the costs of the respondents".
The South African Health Minister, Manto Tshabalala-Msimang, and dozens of AIDS activists and other campaigners were present in the court room which erupted in celebration at the news. Tshabalala-Msimang later said "This is a victory not just for South Africa, but for Africa and the whole developing world. I would like to say thank you to the whole world for supporting us".
The minister also said the government had not agreed to any deals in exchange for the companies dropping the case. "You can trust the government," said Tshabalala-Msimang.
South Africa has agreed to 'consult' the pharmaceutical firms when they draft the regulations to implement the 1997 law which was being challenged in court.
The climbdown by the drug multinationals now places the ball back firmly in the court of the South African government which has so far refused to provide antiretroviral treatment to people in the country living with HIV/AIDS, including pregnant mothers.
The drug companies had criticised the Pretoria government for this and for rejecting their offers of cheaper medicines - including HIV/AIDS treatment. Some 4.7 million people in South Africa are estimated to HIV positive or have AIDS - a figure which is reported to be higher than any country in the world.
The South African authorities will now be under considerable pressure from the same campaigners who supported them in court against the drug multinationals, to change their position and start delivering the treatment which has had success in helping to suppress HIV/AIDS.
The court case sparked controversy in and outside South Africa with worldwide protests that the pharmaceutical companies were putting profits before human lives. Shareholders were reported to have contacted the multinationals, urging them to withdraw the lawsuit in Pretoria and limit the damage of what is generally considered a public relations' fiasco and a moral defeat.
The firms had contested a 1997 South African law which would give the government blanket powers to circumvent expensive patented medicines and produce or import cheap alternatives to the brand-name drugs for HIV and other diseases.
The argument, by the pharmaceutical companies, that cut-price generic drugs would reduce their revenues and jeopardize the pioneering of research for new treatments was comprehensively rejected.
Continuing their court case in Pretoria may have laid the firms open to inspection of their books and records to prove that their profits and research would have been affected by the manufacture of cheaper drugs in South Africa and elsewhere.