New leaked Merck missive reveals deep drug, medical device company opposition to South African patent reforms

James K Glassman
James K. Glassman. Merck said Glassman's public relations firm was selected by PhRMA to lead a campaign to keep drug prices high in South Africa. The Health Minister in South Africa referred to the campaign proposal as a genocidal conspiracy of satanic magnitude.

KEI has obtained an email sent out on January 10th, 2014, by Michael Azrak, Merck's Managing Director for Southern and East Africa, that illustrates the deep involvement of two dozen companies in the campaign to undermine patent reform in South Africa. The Merck email, not public before today, sheds new light on industry lobbying to undermine South Africa patent reforms. (See KEI statement on the leak below).

The Merck email comes nearly 16 years after Merck and other companies sued Nelson Mandela on February 18, 1998, to block implementation of 1997 amendments to the South Africa Medicines Act. [Text of 1998 complaint here], and less than a year after the Sundance screening of Fire in the Blood, a documentary that focuses on the earlier opposition by big drug companies to affordable generic HIV drugs in developing countries, referred to by the Director of the film as 'the Crime of the Century'.

The Merck email relates to a recently disclosed lobbying and public relations proposal by a US group named Public Affairs Engagement (PAE), headed up by Ambassador James Glassman. Glassman, now the head of a Washington, DC based lobbying and public relations firms, is a former Undersecretary of State for Public Diplomacy and Public Affairs, and the former Chairman of the US Broadcasting Board of Directors, the entity that directed all non-military US taxpayer-funded international broadcasting including the Voice of America, Radio Free Europe and Alhurra TV. Glassman was also the founding director of the George W. Bush Institute. Glassman set out the campaign's objectives in a memo that was recently leaked to the media. Among the targets of the PAE campaign were MSF, and the South Africa based non-profit patient advocacy groups, the Treatment Access Campaign (TAC), and SECTION27. In the PAE proposal obtained by the South Africa Department of Health and the Mail and Guardian newspaper last week, Health Minister Aaron Motsoaledi described the proposal as genocidal conspiracy of satanic magnitude:

Health Minister Aaron Motsoaledi has accused a group of multinational pharmaceutical companies active in South Africa of conspiring against the state, the people of South Africa and the populations of developing countries – and of planning what amounts to mass murder.

"I am not using strong words; I am using appropriate words. This is genocide," Motsoaledi told the Mail & Guardian on Thursday, in response to a plan he described as a conspiracy of "satanic magnitude" – a plan he called on all South Africans to fight "to the last drop of their blood".

The plan in question is a nine-page document obtained independently this week by both the M&G and the department of health, blandly titled Campaign to Prevent Damage to Innovation from the Proposed Draft National IP Policy in South Africa.

After the PAE proposal was leaked, drug companies described the PAE proposal as something that they had rejected. (See IPASA statement below, for example.) But the email obtained by KEI illustrates the extensive role and buy-in to the proposal by Merck, and the engagement by nearly two dozen firms, including nearly all large pharmaceutical companies, but also several companies in the medical device business, including Baxter and General Electric, and the fact that budgeting for the campaign was approved in December 2013.

For context, note that the PAE/IPASA/PhRMA activities are related to South Africa's "Draft National Policy on Intellectual Property," including a recommendation that South Africa institute a pre-grant and post-grant opposition system for patents, as well new requirements for patent examination (RSA now has a registration system, without an examination), that South Africa exclude diagnostic, therapeutic and surgical methods from patentability, and improve the statutory framework for compulsory licensing. The policy is described in more detail here.

In the email, Merck official Michael Azrak said:

As we agreed at the last Board meeting in December, we have moved ahead in identifying a high calibre consultancy group to work with us. The group selected is Public Affairs Engagement (PAE), a Washington DC based team led by former US Ambassador James Glassman. This group was selected after a detailed process where we received proposals form a number of agencies both Local and International. The final selection was carried out in consultation with PhRMA. . . .

Key Objectives of the Campaign

The overall campaign is aimed at delaying the finalization of the IP policy by the Cabinet until after the 2014 election. . . .

Key elements of the Campaign

Mobilize voices inside and outside South Africa to send the message that the proposed IP policy threatens continued investment and thus economic well-being. This mobilization will occur through an energetic campaign, which will fee like a political campaign. . . .

Investment
The total investment for this 5 month campaign will be circa $450K. PhRMA will contribute $350K & IPASA will contribute $100K. In addition, IPASA will be responsible for the remainder of IP activities in 2014, with a reserve of $150K for any additional activities. So in total we will invest approx. $600K in IP related activities in 2014. Our IPASA contribution will be R2.5m (slightly less to what we were agreed to invest at the December Board meeting).

I'm confident that this positive, forward thinking and proactive campaign is what we need to bring balance back to the entire discussion around IP and access to medicines. PAE have worked successfully with PhRMA in other countries with an established track record.

A list of the companies as recipients of the email include:

  • Alcon
  • Allergan
  • Amgen
  • Astrazeneca
  • Baxter
  • Bayer
  • BMS
  • Boehringer-Ingelheim
  • Covidien
  • Galderma
  • GE
  • Johnson & Johnson
  • Lilly
  • Merck
  • Merck group
  • Murgatroyd
  • Netgrs
  • Norgine
  • Novartis
  • Novo Nordisk
  • Pfizer
  • Roche
  • Sanofi
  • Takeda

KEI statement on Merck email and industry lobbying against patent reforms in South Africa.

"Nearly 16 years after Merck and 41 other applicants sued Nelson Mandela and the South Africa government to block implementation of amendments to its Medicines Law, Merck has emerged as a key figure in an industry effort to block new reforms. We call upon Merck to either fire Michael Azrak, Merck's Managing Director for Southern and East Africa, or have someone higher up in the company take responsibility for this action, and explain why Merck wants to use its power to stop South Africa and other countries in the region from expanding access to medicine. Merck and others should also stop lying about their involvement in this lobbying efforts. We also call upon all of the other companies copied in the email to make public statements about their involvement and future intentions, and stop hiding behind the untruthful and discredited front groups and trade associations that do their dirty works. General Electric, Baxter, and other medical device manufacturers also need to account for their involvement." James Love, Director, Knowledge Ecology International. +1.202.361.3040, email: james.love@keionline.org

Here is the IPASA statement from January 17th, 2014.

17 January 2014
IPASA Statement on reports of proposed advocacy campaign

Innovative Pharmaceutical Association SA (IPASA)’s Chief Operating Officer, Val Beaumont issued the following statement on Friday following media reports about IPASA’s engagement of Public Affairs agency Public Affairs Engagement (PAE):

“Innovative Pharmaceutical Association SA (IPASA) can confirm that it has not engaged the consultancy PAE to lobby on intellectual property or any other matter in South Africa. PAE submitted a proposal for a campaign, which was reviewed and subsequently rejected by IPASA members, and no payment or pledge has been made in any respect.

As an industry association that represents the views of multiple stakeholders within the Pharmaceutical Industry, IPASA regularly engages in advocacy activities on critical policy issues. The draft IP Policy is a matter of vital importance to the future of the healthcare sector in our country and to all other innovative industries in South Africa. IPASA has participated in the DTI’s public consultation process and has made a written submission to the Department of Trade and Industry with respect to the draft national IP policy published last year (A copy of IPASA’s submission to the DTI on the draft policy can be found here).

As stated in our written submission to the DTI – IPASA supports the broad objectives of the draft national policy on IP. A number of the recommendations outlined in the draft national policy relating to health are already possible through existing legislation. These include mechanisms for both compulsory and voluntary licensing and parallel importation. IPASA has raised questions in the submission on how such existing legislation will be integrated under the proposed policy framework.

Innovative medicines from our sector have contributed significantly in improving healthcare and we are committed to working with government into the future.”

Issued by

Val Beaumont

Chief Operating Officer: IPASA
Mobile: 082 828 3256
Landline: 011 781 3256
Email: val@ipasa.co.za

About IPASA

IPASA represents 26 leading pharmaceutical companies who are dedicated to exploring, developing and bringing innovative, quality medicines to the South African market. Only companies that conduct their own research and development qualify for membership.
IPASA works to promote:

- A patient-focused healthcare system with universal access to quality care;
- An environment conducive to investment, continued development and sustainability of the pharmaceutical industry;
- Respect for and protection of intellectual property rights;
- Ethical conduct and practices; and
- Adherence to the Code of Marketing Practice.

On January 18th, 2014, The Fix the Patent Laws campaign site published the TAC, SECTION27 and MSF reactions to the PharmaGate revelations.

The TAC statement from January 18th, 2014 said,

“The Treatment Action Campaign is outraged over what appears to be a covert and well-funded plan from the foreign pharmaceutical industry to delay an essential law reform process in South Africa. It takes us back to the turn of the century when 39 pharmaceutical companies took President Nelson Mandela and the South African government to court to try to stop legislative reform to improve South Africa’s ability to access affordable life-saving medicines. Now, just weeks after his death, foreign pharmaceutical companies are coordinating another major attack on this right.

We call for the urgent finalisation and release of the Department of Trade and Industry’s long awaited Intellectual Property Policy. Any further delays are unacceptable and will have far reaching impact on the provision of public health. We will not allow foreign industry to derail this national process, especially in such a secret and underhanded way.The TAC fought before and we will fight again now to protect the Constitutional rights of all people in South Africa.”

For media enquiries please contact:

Vuyiseka Dubula – TAC General Secretary +27 82 763 3005
Lotti Rutter – TAC Senior Researcher +27 81 818 8493 lotti.rutter@tac.org.za

Section 27 said:

SECTION27 condemns the action taken by pharmaceutical companies to undermine the Draft Intellectual Property Policy process that is currently underway in South Africa. SECTION27, together with its partners has been calling for reforms to the IP regime in line with the constitutional right to health care services for many years. The DTI’s draft policy takes bold steps to address the negative consequences of the current patent regime for access to health care services, with its proposals to amend laws which act as a barrier to improved access to medicines in South Africa.

The proposal by the US company Public Affairs Engagement (PAE), which is reported on in the Mail & Guardian today, shows that the pharmaceutical companies whose members make up the Innovative Pharmaceutical Association of South Africa (IPASA) are seeking to undermine the progress being made to protect public health through covert and anti-democratic actions, including buying ‘independent’ research from their R6m pot. The PAE proposal uncovers an agenda to interfere with a democratic legislative process in order to protect profits not only in South Africa but in the rest of the developing world as well as to “push back” against the civil society alliance of TAC, SECTION27 and MSF which has led on this issue in South Africa. It is critical that all progressive activists, academics, business, regional institutions and governments across the developed and developing world speak out against such underhanded tactics by these companies.

SECTION27 is having discussions with our partners about the revelations and their implications and will issue a detailed statement early next week.

Please contact Umunyana Rugege on 011 356 4120 or via email to rugege@section27.org.za for comments.

MSF said,

Doctors Without Borders (MSF), as part of the Fix the Patent Laws campaign applauds South African health minister Aaron Motsoaledi for speaking out against a multinational pharmaceutical coalition and their intent to delay reforms of the country’s intellectual property (IP) laws, through a deceptive internationally bankrolled lobbying campaign. (Mail & Guardian: Motsoaledi: Big pharma’s ‘satanic’ plot is genocide)

“To have foreign companies spending R6m to dissuade government from pushing legislation that promotes access to more affordable medicines is outrageous. The minister is right to take a firm stand against pharmaceutical companies that seek to protect their profit margins at the expense of ordinary South Africans. The government is bringing national law in line with international norms, so they have the ability to take action when inflated prices put crucial medicines out of reach,” said Julia Hill of Doctors Without Borders (MSF).

Reform of South Africa’s IP laws is long overdue. Today South Africa’s patent system already benefits international pharmaceutical companies by granting an excessive number of patents, compared to both developed and developing countries. South Africa remains a net importer of pharmaceutical products, to such an extent that it’s the 5th biggest contributor to our trade deficit. Changes to facilitate generic production would have a more positive economic benefit.

“The draft IP policy includes reforms that are not radical. For instance, the proposed patent examination system would reward truly innovative patents and weed out frivolous applications,” said Hill.
The Department of Trade and Industry (DTI) is responsible for finalising the IP policy, based on recommendations received during a public comment period on a draft policy late last year.

The DTI has so far shown great fortitude in emphasising balance between interests of business and the government’s Constitutional obligation to protect public health. With the support of the Department of Health we trust the DTI will continue to withstand drug industry pressures, and make every effort to prioritise rapid finalisation of the IP policy, inclusive of public health safeguards.

For more information, please contact
Kate Ribet, Media Liaison Officer, MSF SA
kate.ribet@joburg.msf.org | 079 872 2950

Professor Brook Baker, Senior Policy Analyst, Health GAP wrote a trenchant analysis of the PharmaGate revelations which can be found here: http://www.fixthepatentlaws.org/?p=830.


Note: In 2009, I co-authored the following article with James K. Glassman, opposing 12 years of exclusive rights in test data for biologic drugs. Don’t Kill Competition for High-Tech Drugs, the Hill, September 9, 2009.
Update: TAC has issued a statement about the Merck email. Excerpts from TAC's January 21, 2014 statement are here:
http://www.tac.org.za/news/leaked-pharmagate-emails-prove-big-pharma-involvement-scandal

LEAKED PHARMAGATE EMAILS PROVE BIG PHARMA INVOLVEMENT IN SCANDAL
Lotti Rutter, January 21, 2014.

...

The leaked e-mail shows that IPASA lied about the extent of their involvement in the PharmaGate plot. The available evidence strongly suggests that they would have proceeded with the plot had its contents not been leaked and had the Mail & Guardian not contacted them for comment. We consider the lies told by IPASA to be an attempt to distance themselves from the scandal and to minimise the damage to their reputation.

We call on individuals at Merck, IPASA, PhRMA and all member companies of IPASA and PHRMA to explain and clarify their involvement in the PharmaGate plot.

We call on Merck to state publically whether they support the views expressed by Michael Azrak in the leaked e-mails and whether they will continue to employ Azrak in his current position.

We call on IPASA to state whether they will replace Azrak as the Head of their Intellectual Property Committee.

We ask the members of IPASA whether they will maintain Val Beaumont as Chief Operating Officer, given that she has misled the South African public.

AttachmentSize
merck-email.pdf894.65 KB
PAE-proposal-RSA-patent-reform.pdf3.49 MB