European Union

Delegation of the European Commission
in South Africa

Head of Delegation

25 November 1997

Ref: 276-pharma
APV/adk

Dr. O Shisana
Director General
Department of Health
Civitas Building
PRETORIA
0002

Dear Dr. Shisana,

In pursuance of our letter dated 9 September 1997 and your response dated 22 September 1997 Ref D3/6/6 on the issue of the recent South African legislation relating to Pharmaceuticals, the Delegation has been instructed by Headquarters to advise you of the following:

"The European Commission has received complaints from the European Pharmaceutical industry that the South African bill Section 15C, to amend the Medicines and Related Substance Control Act from 1965 (MRSC) appears to be in violation of the TRIPs Agreement and in particular Articles 27 (non discrimination) and 28 (rights conferred by the patent), with which South Africa has to comply since 1 January 1996.

Patents are granted pursuant to the South African Patent Act, No 57 of 1978. Section 45 of the Patent Act deals with the effect of patents. According to industry sources the present Patent Act does not comply with Article 28 of the TRIPs Agreement as offering for sale and import are not expressly covered by the wording of Article 28. The Commission has, as part of the general TRIPs review, asked the South African Government for a clarification of this point. To date, there have been, to our knowledge, no changes in the South African Patent legislation.

The Commission notes with concern that several private operators in the pharmaceutical industry claim that, by proposing the new MRSC bill Section 15C, South Africa would diminish the existing patent rights conferred by a patent. The bill would also conflict with the basic principle of the TRIPs Agreement that no country; developing or industrialised must adopt new laws that result in a lesser degree of consistency with the provision of the TRIPs Agreement. Furthermore, it is argued that section 15C is only intended to apply to pharmaceuticals and is therefore discriminatory between different fields of technologies. Such discrimination is prohibited in Article 27.1 of the TRIPs Agreement.

The wording of Section 15C seems to give the Minister of Health the right to disregard all the rights conferred by a patent. Article 28.1 (a) of the TRIPs Agreement sets the minimum requirements regarding the rights conferred by a patent. Member States are obliged to respect these minimum requirements with the legitimate exceptions laid down in the TRIPs Agreement (Article 30). Doubts have therefore been expressed whether Section 15C is in compliance with Article 28.1 (a) of the TRIPs Agreement.

The Commission has noted with satisfaction that the South African Government already stated, as part of the TRIPs review, that the existing Patent Act would be amended during 1997 to be in full compliance with the TRIPs Agreement. However, in the light of the concerns and questions being expressed by representatives of the European Pharmaceutical Industry, the Commission would like to receive, as soon as possible, answers in writing to the following questions:

Have the South African authorities during 1997 amended the Patent Act No 57 of 1978 to be in compliance with the TRIPS Agreement? The Commission would especially like to know whether "import and offering for sale" has been included in the wording of Section 45.1 of the Patent Act No 57 of 1978.

Can the South African Government give reassurance that the Medicine and Related Substance Control Bill complies with the principle of not adopting new laws that result in a lesser degree of consistency with the provision of the TRIPs Agreement?

Would the interpretation of Section 15C and the words "to protect the health of the public" allow the Minister of Helath to extinguish all rights, without limitations conferred by a patent; including the right to prevent import into South Africa of products put on the market in another country without the consent of the holder of an Intellectual Property Right in South Africa?

How does the South African Government define the concept "owner of the medicine" which is not defined in the international patent legislation?

Can the South African Government reconfirm and explain its position that Section 15C fully complies with the TRIPs Agreement, notably its articles 27.1, 28 and 30?"

Yours sincerely,

Erwan Fouere
Ambassador

Copies to: Rev F Chikane
Director General, Office of the Deputy President

Mr. W Bosman
Director Department of Foreign Affairs

Mr Z Rustomjee
Director General Department of Trade and Industry

Dr S A Nkomo
Chairman of the Parliamentary Portfolio Committee on Health