IN THE HIGH COURT OF SOUTH AFRICA (TRANSVAAL PROVINCIAL DIVISION) CASE NO: 4183/98 In the matter between :- THE PHARMACEUTICAL MANUFACTURERS' ASSOCIATION OF SOUTH AFRICA First Applicant AND OTHERS Second to Forty Second Applicants and THE PRESIDENT OF THE REPUBLIC OF SOUTH AFRICA, THE HONOURABLE MR N.R. MANDELA N.O. First Respondent AND OTHERS Second to Tenth Respondents and TREATMENT ACTION CAMPAIGN Amicus Curiae HEADS OF ARGUMENT ON BEHALF OF THE TREATMENT ACTION CAMPAIGN 1 INTRODUCTION Overview of the submissions by the Treatment Action Campaign 1.1 The Treatment Action Campaign ("TAC") has been admitted as an amicus curiae in these proceedings. The TAC addresses submissions only on the constitutionality of sections 15C, 22F and 22G of the Medicines and Related Substances Control Act 101 of 1965 as amended by Act 90 of 1997 ("the Act"). 1.2 The TAC submits that these provisions violate neither the fundamental rights of the applicants, nor the rule of law guarantee against arbitrariness. In advancing this submission, these heads of argument will address the following issues: 1.2.1 the proper approach to the interpretation of the relevant sections of the Act; 1.2.2 the constitutional obligation resting on the State to provide cheap access to drugs, particularly in the context of the HIV/AIDS epidemic; 1.2.3 the nature and ambit of the fundamental rights relied upon by the applicants: the rights to property (s 25 of the Constitution), equality (s 9(1) of the Constitution) and free choice of occupation, trade and profession (s 22 of the Constitution); 1.2.4 the scope of rationality review under sections 9(1), 22 and 25(1) of the Constitution and under section 1(3) which entrenches the rule of law as a founding value. 1.3 It will be submitted that there is no substance to the following constitutional challenges made by the applicants to provisions of the Act: 1.3.1 the challenges to section 15C based on the fundamental right to property and the non-arbitrariness requirement of the rule of law; 1.3.2 the challenges to section 22F based on the fundamental rights to property, equality and free choice of profession and the non-arbitrariness requirement of the rule of law; and 1.3.3 the challenges to section 22G based on fundamental rights to equality and free choice of profession and the non-arbitrariness requirement of the rule of law. 1.4 In relation to the fundamental rights challenges brought by the applicants to sections 15C, 22F and 22G, the TAC submits that the provisions in question: 1.4.1 do not limit any fundamental rights of the applicants; alternatively 1.4.2 having particular regard to the imperatives of combatting the HIV/AIDS epidemic, can be justified in terms of section 36(1) of the Constitution. 1.5 At the heart of the challenges based upon the rule of law, property, equality and free choice of profession is the concept of rationality review. Irrespective of who bears the onus of demonstrating that the provisions in question are arbitrary or irrational (and it will be submitted that the applicants bear the onus) there is clearly a rational basis for the legislation. Hence it will be submitted that these challenges fall at the first hurdle. 1.6 The TAC does not address the applicants "void for vagueness" and "delegation doctrine" challenges to sections 15C, 22F and 22G because these are canvassed fully in the responddents' heads of argument and are, in any event, issues in respect of which the amicus has no direct interest. 1.7 These heads of argument will consolidate all the submissions that the TAC wishes to advance. They replace the heads of argument filed at the previous hearing. The interest of the Treatment Action Campaign and the facts relevant to that interest 1.8 The Treatment Action Campaign is a voluntary association with broad local and international support, campaigning inter alia for: 1.8.1 affordable treatment for all people with HIV/AIDS; 1.8.2 the prevention and elimination of all new HIV infections; 1.8.3 a regulatory framework to ensure equal access and equal treatment of all people with HIV/AIDS; and 1.8.4 affordable and quality access to health care for all people in South Africa 1.8.4 Founding Affidavit of Steele p 3434 para 4 1.9 The legislation under challenge in these proceedings has the professed aim to make all medicines affordable, but the scale of the HIV/AIDS epidemic and its impact create an urgency and immediacy in this regard which is not applicable to any other illnesses. The TAC therefore represents a constituency with a particular interest in these proceedings. 2 HIV/AIDS AND THE CONSTITUTIONAL OBLIGATION TO PROVIDE ACCESS TO DRUGS 2.1 The HIV/AIDS epidemic presents a health crisis that is unparalleled in South African history. Official estimates in October/November 1999 placed the number of HIV positive people in South Africa at 4.2 million. The most recent estimates now place the number at 4.7 million. The Department of Health projects that by 2002 a quarter of a million South Africans could die of AIDS each year and that by 2008 this figure will have risen to over a million. Founding Affidavit of Steele: p 3450 para 41; p 3451 para 44 p 3451 para 45 Supplementary Answering Affidavit of Steele: p 4249 para 13 2.2 The affidavits of individual deponents living with HIV/AIDS personalise the effect of these national statistics and illustrate the extent to which the HIV/AIDS epidemic compromises the ability of the millions of South Africans behind the statistics to live a dignified life. Achmat Amicus Application Annexure AA11 p 3537 Dubula Amicus Application Annexure AA12 p 3541 Impali Amicus Application Annexure AA13 p 3544 Mthathi Amicus Application Annexure AA14 p 3547 Makebesana Amicus Application AA15 p 3550 Kwaza Amicus Application Annexure AA16 p 3552 Mantshi Amicus Application Annexure AA17 p 3554 Feni Amicus Application Annexure AA18 p 3557 Dove Amicus Application Annexure AA19 p 3560 Ogle Amicus Application Annexure AA20 p 3563 Mohapi Amicus Application Annexure AA21 p 3565 Ogle Amicus Application Annexure A22 p 3567 To these personal case studies, the applicants have offered no answer. 2.3 It is not disputed that anti-retroviral drugs have now been developed which target HIV directly and significantly reduce the replication of the virus, thereby preventing illness and the onset of AIDS. Founding Affidavit of Steele: p 3542 para 51 Johnson Amicus Application Annexure AA3 p 3493 para 19 - p 3494 para 24 2.4 However, the cost of these anit-retroviral drugs in South Africa, (between R2000 and R4000 per person per month) remains beyond the means of most persons living with HIV/AIDS. Thus, most South Africans living with HIV/AIDS are condemned to follow a path towards inevitable death over an average period of ten years from their infection. Steele Amicus Application p 3453 para 52 Reuter Amicus Application Annexure AA9 p 3533 para 13 Johnson Amicus Application Annexure AA3 p 3487 para 8.3 and p 3494 para 24 Goemaere Amicus Application Annexure AA4 p 3511 para 23 - p 3512 para 26 2.5 The high price of these life saving anti-retroviral drugs is not inevitable. Dr Goemaere shows how the promotion of generic substitution in Brazil has led to a 70% reduction in the price of the anti-retroviral drugs. This reduction in anti-retroviral drug prices (which, incidentally, corresponds almost exactly to the average differential between anti-retroviral wholesale prices in Brazil and South Africa) has enabled the Brazilian government to put approximately 100 000 people onto anti-retroviral treatment and thereby to extend their lives. Goemaere Amicus Application Annexure AA4 p 3512 paras 28-29 and p 3513 para 32 2.6 It is not only anti-retrovirals which have been placed beyond the reach of patients living with HIV/AIDS by drug prices. For example, Fluconazole, which is used effectively to treat or prevent a range of serious and invasive fungal infections commonly associated with HIV/AIDS, was sold to the government at a tender price of R28 per pill and retailed at R125 per pill when a generic equivalent cost R2 per pill. Johnson Amicus Application Annexure AA3 p 3492 para 15 Founding Affidavit of Steele: p 3453 para 53 Geffen Amicus Application Annexure AA8, p 3530 paras 7-8 2.7 In the original answering affidavit filed by the applicants, Deeb conceded that "the HIV/AIDS epidemic poses severe challenges to the health care system and to research-based pharmaceutical industry". She professed to be "alive to the personal suffering caused by the ravages of disease, not only HIV,". However, she claimed that her omission to deal with "such tragedy in these papers is simply that it would not contribute to the resolution of the narrow issues which call for adjudication in this application". Deeb Original Answering Affidavit: p 3659 para 3 2.8 In the supplementary answering affidavit, Deeb, once again, studiously avoids any engagement with the impact of HIV/AIDS and contents herself with conceding that "the extent of the HIV/AIDS infections in South Africa has reached epidemic proportions and has catastrophic effects". Deeb Supplementary Answering Affidavit: p 3810 para 2.2.2 p 3813 para 2.4 2.9 In asserting its interest in these proceedings, the TAC essentially advanced three propositions: 2.9.1 First, the nature and extent of the health risks posed by HIV are of such a magnitude that such risks are unparalleled in our history and are simply not comparable to any other incurable disease. The HIV/AIDS epidemic threat constitutes the greatest health risk ever faced by South Africa. The epidemic has the potential to decimate the population on an unprecedented scale. Its effects are being felt daily. 2.9.2 Second, the costs of medicines to treat HIV/AIDS are simply beyond the reach of the majority of South Africans and that ss 15C, 22F and 22G will if implemented, reduce the costs of medicines used in treating HIV/AIDS. 2.9.3 Third, there are medicines currently available which can substantially relieve suffering and prolong the lives of people living with HIV. 2.10 The applicants do not dispute the first and third contentions advanced. Moreover, they do not dispute that the costs of anti-retroviral medicines are unaffordable for many people. They contend, however, that a distinction must be drawn between the public and the private sector and that it is, in essence, only the private sector which is touched by the question of affordability. Even an acceptance of the applicants' contentions in this regard (which, in any event, are disputed) indicates that "the number of HIV positive people seeking medical assistance in the private sector cannot be more on current demographics than 0,84 million". This, according to the applicants, represents a maximum figure and the "real figure of patients with HIV/AIDS actually seeking or receiving medical treatment in the private sector probably stands at well below 1% of the population". On this basis (and given the most recent figures), this would represent approximately 500 000 people. Deeb Supplementary Answering Affidavit p 3823 para 4.2.5(d) 2.11 The applicants' contentions in this regard, however, are demonstrably misconceived in a number of respects. The applicants' argument rests essentially on three contentions: 2.11.1 First, while conceding that the costs of HIV/AIDS medicines are inaccessible to many patients, the applicants contend that this is true for many patients who are unable to pay for the medicines at any cost level. Deeb Supplementary Answering Affidavit: p 3821para 4.1 2.11.2 Second, the applicants contend, however, that 70% by volume of the medicines sold in South Africa is bought and supplied for patients by the State or public sector and in respect of these medicines the public sector "obtains supplies at costs comparable to the cheapest available in the world". The submission is advanced that no saving will be brought about in the public sector by the process catered for in section 22F (generic substitution) because "the State sector operates on a tender system in terms of which it gets what it orders by the awarding of the tender." Deeb Supplementary Answering Affidavit: p 3821 para 4.2.1 p 3824 para 5.3 2.11.3 Third, the applicants make great play of the initiatives of members of the PMA "by projects aimed at providing greater access to the medicines which they produce and which are useful in the treatment of HIV/AIDS". Deeb Supplementary Answering Affidavit: pp 3832 para 8.1 2.12 Irrespective of the manner in which the State purchases medicines, they ultimately come at a cost which is dependent upon the willingness of the manufacturers to tender at all, and, if they do so tender, to tender at a particular price. The decision to tender and the price of such tender are exclusively matters within the preserve of the manufacturer. There is no obligation upon a manufacturer to tender or, to tender at a particular price. The fallacy of the applicants' argument emerges clearly from the reply by Dr Ntsaluba who states that the State does not supply anti-retrovirals because they are not affordable. Ntsaluba Replying Affidavit: p 4895 para 14 p 4899 para 19.4 p 4910 para 34.2 p 4918 para 40 p 4929 para 61.1 - 61.2 See also: p 4924 para 47.2 p 4928 para 58 The applicants' approach also ignores the inter-relationship between the public and private sectors. Van den Heever Amicus Reply: pp 4353-4356 paras 39 - 47 2.13 One of the initiatives to which reference is made by both the TAC and the applicants concerns Pfizer Laboratories' product, Diflucan. In relation to this product, there is no dispute that the Memorandum of Understanding between the Minister of Health and Pfizer Laboratories was entered into because the Government could not afford to purchase sufficient quantities to meet demand for the medicine at the current tender price to the public sector of R28 per pill. The price of the bioequivalent generic version is R2 per pill. It is not disputed that this agreement is an explicit confirmation that at the current price this particular drug is not affordable. This and other medicines are therefore either not purchased on State tender or purchased and prescribed in the Public Health Service in insufficient volumes to meet a public need. Founding Affidavit of Steele: pp 3453 paras 53-56 Annexure AA25 p 3614 Deeb Supplementary Answering Affidavit: p 3833 para 8.2 Ntsaluba Replying Affidavit: p 4911 paras 35.4 - 35.5 2.14 The applicants contend that sections 22F and 22G will not bring about savings in the cost of medicines to any significant degree in the public sector. The argument in this regard appears to be that the State sector operates on a tender system in terms of which it gets what it orders by the awarding of the tender. The product so bought by and delivered to the State is thereupon dispensed to patients at State facilities. 2.14 Deeb Supplementary Answering Affidavit: pp 3824 - 3926 para 5.3 - 5.6 2.15 It is submitted that the contentions are both factually and legally misconceived: 2.15.1 From a factual point of view, the contentions simply ignore the evidence, referred to above, in relation to Diflucan as well as the evidence of Dr Ntsaluba. Ntsaluba Replying Affidavit: pp 4889 - 4892 paras 10.1 - 10.10 Ntsaluba Main Answering Affidavit: pp 1409 - 1411 para 49 2.15.2 There is nothing in section 22F which confines its operation to the private sector. 2.15.3 Save for section 22G(3)(a), there is nothing in section 22G which confines its operation to the private sector. 2.15.4 The State's obligations in relation to the procurement of goods flow from section 217 of the Constitution, the relevant provision of which provides: "217 (1) When an organ of State in the national, provincial or local sphere of government, or any other institution identified in national legislation, contracts for goods or services, it must do so in accordance with a system which is fair, equitable, transparent, competitive and cost-effective." 2.15.5 The fact that the COMED system is presently in operation does not mean that this system is the only system for the procurement of medicines nor does it mean that its operation will continue either at all, or in its present form. Moreover, the capacity of the State to meet all of its constitutional obligations is ultimately dependent upon the revenue it generates and the extent of its costs. Hence, the price at which medicines are purchased is a crucial determinant in the capacity of the State to meet its obligations, inter alia, to provide access to health care services. This clearly emerges from the evidence of Dr Ntsaluba. Ntsaluba Replying Affidavit: pp 4892 - 4894 paras 12.1 - 12.2 Gray Amicus Reply: p 4817 para 8 Ntsaluba Main Answering Affidavit: pp 1409 - 1411 para 49 2.16 As for the initiatives by certain members of the PMA to provide medicines at cheaper rates, these initiatives are entirely at the whim of the manufacturers concerned and reduce patients to the recipients of charity. Initiatives of this sort can as easily be withdrawn as they are made. Hence, powers of parallel importation and generic substitution, as well as price control are legitimate means to achieve price reduction and other legitimate objectives. Perez-Casas Amicus Reply: pp 4299 - 4300 paras 9.1 - 9.3 pp 4301 - 4302 paras 10.1 - 10.6 pp 4302 - 4303 paras 11.1 - 11.2 Van den Heever Amicus Reply: pp 4349-4350 paras 26 - 30 pp 4352 - 4353 paras 35 - 38 pp 4358 - 4360 paras 47 -57 2.17 It is not without significance that all the initiatives referred to by the applicants were made substantially after the institution of these proceedings. 2.18 The applicants also fail to address the principle contentions advanced by Dr Goemaere of Medecins Sans Frontiers ("MSF"), an international humanitarian medical aid agency operating in many countries, including South Africa. MSF comprises a group of physicians who offer emergency assistance wherever humanitarian disasters occur. It was the recipient of the Nobel Peace Prize in 1999. MSF South Africa is based in Khayelitsha. In April 2000 it began infectious disease clinics to provide treatment for people with HIV/AIDS. It is pointed out that "hundreds of patients under the care of our doctors are in need of treatment that they cannot afford". Dr Goemaere states the following: "23 The experience in the MSF clinics in Khayelitsha forms the basis of these comments. These clinics are among the few in the Western Cape dedicated to the provision of treatment for people with HIV/AIDS. The clinics also dispense free treatment for the opportunistic infections that are common in people with HIV/AIDS. As a result, on a daily basis, people with HIV/AIDS who cannot afford the high cost of medicines visit the MSF clinics. The need is such that even patients with little income will pay hefty sums to travel from the surrounding areas in the hopes of receiving treatment in the MSF clinics. 24 At the moment our doctors and nurses are able to provide the medicines necessary for the treatment of opportunistic infections, the complications that arise as a result of the damage HIV causes to the immune system. 25 However, the medical indication for many of the patients visiting the MSF clinics is antiretroviral therapy, which directly inhibits HIV from replicating and so can prevent the development of opportunistic infections. Our doctors and nurses cannot provide out patients with the anti-retroviral therapy because the high price of these drugs makes this an unsustainable option (once begun, antiretroviral therapy is life-long). 26 Thus as a result of the high price of medicines, our doctors and nurses are regularly unable to offer the antiretroviral treatment needed by our patients." Goemaere Amicus Application: pp 3511 - 3512 paras 23-26 2.19 The applicants' response to this affidavit is curious. It goes scarcely further than raising the irrelevant question of whether or not Dr Goemaere and the MSF volunteers are qualified and registered to practice as such in South Africa. Deeb Supplementary Affidavit: p 3851 paras 9.1.10 - 9.1.11 The implicit attack is, in any event, refuted. Goemaere Amicus Reply: pp 4856 - 4857 paras 3 - 9 2.20 The affidavit of Susan Roberts also refutes the implicit suggestion of the impermeable barrier between the private and the public health sector. It is made clear that even patients treated at State hospitals receive prescriptions for drugs which may not be dispensed at the hospital concerned and hence must be attended to privately by the patient concerned. Roberts Amicus Reply: pp 4332 - 4338 2.21 Furthermore, simple logic dictates that the public and private health care sectors are not hermetically sealed from one another. Drug prices in the private sector affect the degree to which private patients are able to cover their health care expenses from their private funds, and hence the degree to which these private patients are obliged to seek care in State facilities. Steele Amicus Reply p 4259 para 32 2.22 Finally, it must be pointed out that even taking their arguments about the public sector / private sector divide at face value, the applicants concede that 30% of the total volume of drugs presently sold in South Africa are sold in the private sector. A figure this high amply justifies the taking of measures designed specifically to lower prices in the private sector. Furthermore, the applicants' figures are figures based on historical sales and do not reflect the effect of recent legislative and policy changes designed to shift the focus of public health care expenditure onto primary health care and generally to increase the private sector's share of the burden of health care expenditure. See for example: Sections 24(2)(e), 29(1)(n), 29(1)(p) and 29(1)(t) of the Medical Schemes Act 131 of 1998 Paragraphs 3.8.2, 3.10.4 and 3.10.5 of the White Paper for the Transformation of the Health Care System in South Africa Government Gazette 17910, 16 April 1997 2.23 It is accordingly submitted that the evidence clearly establishes the three central propositions advanced by the TAC referred to in paragraph 2.9 above. 3 THE PROPER APPROACH TO THE INTERPRETATION OF THE RELEVANT SECTIONS OF THE ACT The Relevant Sections of the Act 3.1 For the sake of convenience, the three sections which the TAC seeks to defend are reproduced below: 3.1.1 "15C Measures to ensure supply of more affordable medicines The Minister may prescribe conditions for the supply of more affordable medicines in certain circumstances so as to protect the health of the public, and in particular may - (a) notwithstanding anything to the contrary contained in the Patents Act, 1978 (Act 57 of 1978), determine that the rights with regard to any medicine under a patent granted in the Republic shall not extend to acts in respect of such medicine which has been put onto the market by the owner of the medicine, or with his or her consent; (b) prescribe the conditions on which any medicine which is identical in composition, meets the same quality standard and is intended to have the same proprietary name as that of another medicine already registered in the Republic, but which is imported by a person other than the person who is the holder of the registration certificate of the medicine already registered and which originates from any site of manufacture of the original manufacturer as approved by the Council in the prescribed manner, may be imported; (c) prescribe the registration procdure for, as well as the use of, the medicine referred to in paragraph (b)." 3.1.2 "22F Generic substitution (1) Subject to sub-sections (2), (3) and (4) a pharmacist shall - (a) inform all members of the public who visit his or her pharmacy with a prescription for dispensing, of the benefits of the substitution for a branded medicine of an inter-changeable multi-source medicine; and (b) dispense an inter-changeable multi-source medicine instead of the medicine prescribed by a medical practitioner, dentist, practitioner, nurse or other person registered under the Health Professions Act, 1974, unless expressly forbidden by the patient to do so. (2) If a pharmacist is forbidden as contemplated in sub-section (1)(b), that fact shall be noted by the pharmacist on the prescription. (3) When an inter-changeable multi-source medicine is dispensed by a pharmacist he or she shall note the brand name or where no such brand name exists, the name of the manufacturer of that inter-changeable multi-source medicine in the prescription book. (4) A pharmacist shall not sell an inter-changeable multi-source medicine - (a) if the person prescribing the medicine has written in his or her own hand on the prescription the words 'no substitution' next to the item prescribed; (b) if the retail price of the inter-changeable multi-source medicine is higher than that of the prescribed medicine; or (c) where the product has been declared not substitutable by the Council." 3.1.3 "22G Pricing Committee (1) The Minister shall appoint such persons as he or she may deem fit to be members of a committee to be known as the pricing committee. (2) The Minister may, on the recommendation of the pricing committee, make regulations - (a) on the introduction of a transparent pricing system for all medicines and scheduled substances sold in the Republic; (b) on an appropriate dispensing fee to be charged by a pharmacist or by a person licensed in terms of section 22C(1)(a). (3) (a) The transparent pricing system contemplated in sub-section (2)(a) shall include a single exit price which shall be published as prescribed, and such price shall be the only price at which manufacturers shall sell medicines and scheduled substances to any person other than the State. (b) No pharmacist or person licensed in terms of section 22C(1)((a) shall sell a medicine at a price greater than the price contemplated in paragraph (a). (c) Paragraph (b) shall not be construed as preventing a pharmacist or person licensed in terms of this Act to charge a dispensing fee as contemplated in sub-section (2)(b). (4) To the members of the pricing committee who are not in the full-time employment of the State may be paid such remuneration and allowances as the Minister, with the concurrence of the Minister of Finance, may determine." The Purpose of the Sections 3.2 In S v Lawrence; S v Negal; S v Solberg 1997 (4) SA 1176 (CC) Chaskalson P dealt with the manner in which the purpose of particular legislative provisions is to be ascertained. He did so, in the context of section 26 of the interim Constitution which dealt with the right freely to engage in economic activity. He stated at para 52: "The purpose of particular legislative provisions has ordinarily to be established from their context, which would include the language of the statute and its background. Where the purpose is one sanctioned by section 26(2) the question whether that purpose is justifiable in an open and democratic society based on freedom and equality is essentially a question of law; so too is the question whether there is a rational basis for the means used to achieve the legislative purpose. That is not to say that evidence will not be relevant to these enquiries; it may well be. The evidence, however, is more likely than not to consist of 'legislative facts'. Professor Hogg ... says: 'The US literature draws a distinction between 'adjudicative' facts and 'legislative' facts, terminology originally coined by Professor Kenneth Culp Davis, the author of the major US treatise on Administrative Law. Adjudicative facts are facts about the immediate parties to the litigation - 'who did what, where, when, how, and with what motive or intent'; legislative facts are facts of a more general character concerning the social or economic milieu which gave rise to the litigation'. Legislative facts do not have to be proved as strictly as adjudicative facts and as Professor Hogg says: 'In constitutional cases in the United States there has been a substantial relaxation of the limits of judicial notice for findings of legislative facts.'" In footnote 46, which deals with the question whether there is a rational basis for the means used to achieve the legislative purpose, the following is stated: "In the United States the courts do not require evidence on this issue. 'A legislative choice is not subject to courtroom fact finding and may be based on rational speculation unsupported by evidence or empirical data' (FCC v Beach Communications Inc ....). See also Cabinet for the Territory of South West Africa v Chikane and Ano. 1989 (1) SA 349 (A) at 368 A - 369 D and 382 H - 383 F. As the Beach Communications case shows ..... the United States Supreme Court requires those challenging the constitutionality of legislation under a rational basis review 'to negative every conceivable basis which might support it'." 3.3 The basis of rationality review, will be considered in more detail below. For present purposes, it suffices to state that with regard to the sections presently under review, the purpose is readily ascertainable from the sections themselves. In broad terms, all have in common the overriding objective of obtaining cheaper access to medicines. As the applicants themselves point out, however, the legislation has its genesis in the National Drug Policy published by the Department of Health in 1996. PMA Heads of Argument: pp 201-204 para 20.1.2.2 3.4 The National Drug Policy deals with concerns beyond those catered for by section 15C, 22F and 22G. Of relevance to the purpose of these sections, however, the following emerges from the National Drug Policy: 3.4.1 "The pharmaceutical sector, as a component of the health sector, reflected its deficiencies, most notably the lack of equity in access to essential drugs, with a consequent impact on quality of care. Furthermore, rising drug prices, already high in international terms, gave increasing cause for concern, as did evidence of irrational use of drugs, losses through mal-practice and poor security, and cost-ineffective procurement and logistic practices. Most of these problems are interlinked. The Government of South Africa decided to tackle them systematically through the development and implementation of a National Drug Policy that would be consonant with and an integral part of the new National Health Policy, which aims at equity in the provision of health care for all. The goal of the National Drug Policy is to ensure an adequate and reliable supply of safe, cost-effective drugs of acceptable quality to all citizens of South Africa and the rational use of drugs by prescribers, dispensers and consumers." Annexure "M21" p 706 3.4.2 The specific objectives of the National Drug Policy include "to ensure the availability and accessibility of essential drugs to all citizens", "to lower the cost of drugs in both the private and public sectors" and "to promote the cost-effective and rational use of drugs". Annexure "M21" p 707 3.4.3 Dealing with the aim of promoting the availability of safe and effective drugs at the lowest possible cost the policy states, inter alia, that "this aim will be achieved by monitoring and negotiating drug prices and by rationalising the drug pricing system in the public and private sectors, and by promoting the use of generic drugs." Rationalisation of the pricing structure reflects the intended establishment of "a pricing committee with clearly defined functions to monitor and regulate drug prices". It is envisaged that there will be "total transparency in the pricing structure of pharmaceutical manufacturers, wholesalers, providers of services, such as dispensers of drugs, as well as private clinics and hospitals". It is pointed out that "where the State deems that the retail prices of certain pharmaceuticals are unacceptable and that these pharmaceuticals are essential to the wellbeing of any sector of the population, the State will make them available to the private sector at acquisition cost plus the transaction costs involved." Part of the aim of promoting the availability of safe and effective drugs at the lowest possible cost is the availability of generic drugs. It is envisaged that generic substitution would be allowed in the public and the private sector and that it would be incumbent on the pharmacist, prior to dispensing a prescription to inform the patient of the benefits of generic substitution. Annexure "M21" pp 711-712 3.4.4 With regard to the aim of ensuring an adequate supply of effective and safe drugs of good quality to all people in South Africa the policy states that "the objective is to develop a system of joint responsibility between the government and the patient for the financing of drugs" and that "the government will ensure that essential drugs are available to all people in need. To this end, drugs will be provided free of charge at the point of service at the primary care level". Annexure "M21": p 715 3.4.5 With regard to the aim of promoting the rational prescribing, dispensing and use of drugs, the policy indicates that "the public will be provided with access to objective, validated and practical information on drugs and their proper use, written in lay language and including appropriate self-diagnosis and treatment." Annexure "M21": p 720 3.5 Sections 15C, 22F and 22G give explicit expression to these policy objectives. As will be argued below, there is manifestly a rational connection between the means employed and the objectives pursued. The Abstract Nature of the Applicants' Attack 3.6 In the present case, although the legislation has been enacted, it is not yet in force. The applicants correctly point to the fact that the Constitutional Court follows the objective theory of invalidity. PMA's Heads of Argument: pp 20 - 23 para 3.1.8.5 3.7 In this regard, the Constitutional Court has recognised that notwithstanding the objective approach to the issue of constitutionality, the implementation of an Act "may well give rise to a constitutional complaint, if, as a result of circumstances which become apparent later, its implementation would infringe a constitutional right." New National Party of South Africa v Government of the Republic of South Africa and Others 1999 (3) SA 191 (CC) at 205 B - C para 22 That case concerned the mechanisms which had been put in place in anticipation of the general election. The election had not yet occurred and hence, there was no certainty as to whether or not the mechanisms would result in a substantial denial of the right to vote, as contended by the applicants. Yacoob J, on behalf of the majority observed at para 23: "It is necessary to apply an objective test in deciding whether the Act of Parliament which makes provision for the electoral scheme challenged in the present case, is valid. Parliament is obliged to provide for the machinery, mechanism or process that is reasonably capable of achieving the goal of ensuring that all persons who want to vote, and who take reasonable steps in pursuit of that right, are able to do so. I conclude, therefore, that the Act would infringe the right to vote if it is shown that, as at the date of the adoption of the measure, its probable consequence would be that those who want to vote would not have been able to do so, even though they acted reasonably in pursuit of the right. Any scheme which is not sufficiently flexible to be reasonably capable of achieving the goal of ensuring that people who want to vote will be able to do so if they act reasonably in pursuit of the right, has the potential of infringing the right. That potential becomes apparent only when a concrete case is brought before a court. The appellant bears the onus of establishing that the machinery or process provided for is not reasonably capable of achieving that purpose. As pointed out in the previous paragraph, it might well happen that the right may be infringed or threatened because a governmental agency does not perform efficiently in the implementation of the statute. This will not mean that the statute is invalid. The remedy for this lies elsewhere." (emphasis added) 3.8 Applying this approach to the present matter, and confining the argument to the attacks based upon the Bill of Rights, it would be incumbent upon the applicants to show that the impugned sections would probably entail an unjustified violation of their rights. In the case of section 15C, it is submitted that this cannot be demonstrated. Section 15C is an empowering provision which vests the Minister with the discretion to prescribe conditions for the supply of more affordable medicines. It cannot be said a priori that the exercise of that discretion will probably entail a violation of any of the applicants' rights. The same is true of the appointment of the Pricing Committee and the making of regulations for the pricing system contemplated by section 22G. 3.9 It must be assumed that the discretionary powers conferred will be "properly and lawfully" exercised. Cf. President of the Republic of South African and Others v South African Rugby Football Union and Others 2000 (1) SA 1 (CC) at 83 C para 186 The Requirements of Section 39(2) of the Constitution 3.10 In their heads of argument the applicants place considerable reliance upon section 39(1) of the Constitution. See: PMA Heads of Argument: pp 61 - 62 para 9 3.11 The applicants pay little, if any, attention to section 39(2) which provides: "39 (2) When interpreting any legislation, and when developing the common law or customary law, every court, tribunal or forum must promote the spirit, purport and objects of the Bill of Rights." 3.12 The injunction contained in section 39(2) of the Constitution is particularly important. The Constitutional Court has recently underscored this importance in the following way: "[21] ... This means that all statutes must be interpreted through the prism of the Bill of Rights. All law-making authority must be exercised in accordance with the Constitution. The Constitution is located in a history which involves a transition from a society based on division, injustice and exclusion from the democratic process to one which respects the dignity of all citizens, and includes all in the process of governance. As such, the process of interpreting the Constitution must recognise the context in which we find ourselves and the Constitution's goal of a society based on democratic values, social justice and fundamental human rights. This spirit of transition and transformation characterises the constitutional enterprise as a whole. [22] The purport and objects of the Constitution find expression in section 1 which lays out the fundamental values which the Constitution is designed to achieve. The Constitution requires that judicial officers read legislation, where possible, in ways which give effect to its fundamental values. Consistently with this, when the constitutionality of legislation is in issue, they are under a duty to examine the objects and purport of an Act and to read the provisions of the legislation, so far as is possible, in conformity with the Constitution." (emphasis added) The Investigating Directorate: Serious Economic Offences and Others v Hyundai Motor Distributors (Pty) Ltd and Others 2001 (1) SA 545 (CC) 3.13 In practice, this means that the provisions of the Act presently under attack must be interpreted in the manner which promotes the spirit, purport and objects of the Bill of Rights. In this regard, the applicants focus only on those aspects of the Bill of Rights which, they contend, are violated by the provisions in question. At issue, for present purposes, are not simply rights to property, equality and the regulation of a trade, occupation or profession, all of which have internal limitations. Also to be considered are the rights to life, dignity and access to health care services. The Right to Life 3.14 Section 11 of the Constitution provides: "11 Life Everyone has the right to life." 3.15 In S v Makwanyane and Ano 1995 (3) SA 391 (CC) Chaskalson P observed at para 83: "An individual's right to life has been described as 'the most fundamental of all human rights' ..... ". He observed further at para 144: "The rights to life and dignity are the most important of all human rights, and the source of all other personal rights in Chap 3. By committing ourselves to a society founded on the recognition of human rights we are required to value these two rights above all others. And this must be demonstrated by the State in everything that it does, including the way it punishes criminals." (emphasis added) In similar vein, Langa J observed at para 222: "Implicit in the provisions and tone of the Constitution are values of a more mature society, which relies on moral persuasion rather than force; on example rather than coercion. In this context, then, the role of the State becomes clear. For good or for worse, the State is a role model for our society. A culture of respect for human life and dignity based on the values reflected in the Constitution, has to be engendered and the State must take the lead. (emphasis added) O'Regan J observed at paras 326 - 327: "The right to life is, in one sense, antecedent to all the other rights in the Constitution. Without life, in the sense of existence, it would not be possible to exercise rights or to be the bearer of them. But the right to life was included in the Constitution not simply to enshrine the right to existence. It is not life as mere organic matter that the Constitution cherishes, but the right to human life: The right to live as a human being, to be part of a broader community, to share in the experience of humanity. The concept of human life is at the centre of our constitutional values. The Constitution seeks to establish a society where the individual value of each member of the community is recognised and treasured. The right to life is central to such a society. The right to life, thus understood, incorporates the right to dignity. So the rights to human dignity and life are entwined. The right to life is more than existence - it is a right to be treated as a human being with dignity: Without dignity, human life is substantially diminished. Without life, there cannot be dignity." 3.16 These observations were made in the context of the constitutionality of the death penalty. Nevertheless, they seek to underscore two important propositions: 3.16.1 First, the centrality of the right to life in the constitutional scheme; and 3.16.2 Second, the duty resting upon the State to protect the right to life. 3.17 The Constitutional Court has not dealt with the wider reaches of the right to life. It has nevertheless alluded to the fact that the Indian Supreme Court, "basing itself on the right to life ... has made orders requiring the State to provide medical treatment to those needing it, to provide legal aid to those who cannot afford it themselves, and to provide access between isolated areas and more developed areas." Soobramoney v Minister of Health, KwaZulu-Natal 1998 (1) SA 765 (CC) at para 15, fn 4 The Right to Dignity 3.18 Section 10 of the Constitution provides: 3.18 "10 Human Dignity Everyone has inherent dignity and the right to have their dignity respected and protected." 3.19 Justice Chaskalson in the Third Bram Fischer Lecture "Human Dignity as a Foundational Value of our Constitutional Order" (2000) 16 South African Journal on Human Rights 193 observed at 201 - 202: "Respect for human dignity is crucial to accommodate conflicting interests; so to is respect for the other foundational values - democracy, equality and freedom. There are, however, potential tensions between these values which courts have to resolve. This is not a problem peculiar to South Africa. It is a problem of constitutionalism and is experienced wherever constitutional government is in force. Lord Steyn refers to this in a discussion of the constitutionalisation of public law. He illustrates the problem by quoting Isaiah Berlin, who says: 'Both liberty and equality are among the primary goals pursued by human beings through many centuries; but total liberty for wolves is death to the lambs, total liberty of the powerful, the gifted, is not compatible with the right to a decent existence of the weak and the less gifted. .... Equality may demand the restraint of the liberty of those who wish to dominate; liberty - without some modicum of which there is no choice and therefore no possibility of remaining human as we understand the word - may have to be curtailed in order to make room for social welfare, to feed the hungry, to clothe the naked, to shelter the homeless, to leave room for the liberty of others, to allow justice or fairness to be exercised.' The result, according to Lord Steyn, is that: 'Courts will sometimes have to balance the protection of the fundamental rights of individuals against the general interests of the community. Individualised justice and the stability needed in any democratic society may be in contention. .... Often courts will have to choose between competing values and make sophisticated judgments as to their relative weight.' The balancing may be required in the application of the provisions of the Constitution to concrete cases. An example is a case where a statute limits a constitutional right and the Government seeks to justify the limitation as being reasonable and justifiable in an open and democratic society. To decide the case the Court has to undertake a proportionality analysis calling for a balancing of the conflicting rights and interests involved. But balancing can also take place at an anterior level by interpreting rights and values in ways that avoid conflict." (emphasis added, footnotes omitted) 3.20 This article was referred to by the Constitutional Court in Dawood and Ano v Minister of Home Affairs and Others 2000 (3) SA 936 (CC) at para 35, footnote 49. See also: Holomisa v Argus Newpapers Ltd 1996 (2) SA 588 (W) at 606 E and 607 I - 608 A Concorde Plastics (Pty) Ltd v NUMSA and Others 1997 (11) BCLR 1624 (LAC) at 1645 I - 1646 A Dagenais v Canadian Broadcasting Corporation 25 CRR (2d) 1 (SCC) at 32 - 34 3.21 In the article referred to above, Justice Chaskalson states the following: "There is also a close link between dignity and equality. No society can promise equality of goods or wealth. Nor could it reasonably be thought that this is what our Constitution contemplates. It recognises that at the level of basic needs, such as housing, health care, food, water and society security, profound inadequacies require State intervention and that the State is obliged to 'take reasonable legislation and other measures, within its available resources, to achieve the progressive realisation' of access to such goods." - at 202 He goes on to state: "Ours is an unequal society and the Constitution recognises that positive action is necessary to establish conditions in which there is not only equality of rights but also equality of dignity. To this end the Constitution provides that the State must take action to achieve the progressive realisation of socio-economic rights to housing, health care, food, water and social security." - at 203 He states further: "As an abstract value, common to the core values of our Constitution, dignity informs the content of all the concrete rights and plays a role in the balancing process necessary to bring different rights and values into harmony. It too, however, must find its place in the constitutional order. Nowhere is this more apparent than in the application of the social and economic rights entrenched in the Constitution. These rights are rooted in respect for human dignity, for how can there be dignity in a life lived without access to housing, health care, food, water or in the case of persons unable to support themselves, without appropriate assistance? But social and economic policies are pre-eminently policy matters that are the concern of Government. In formulating such policies the Government has to consider not only the rights of individuals to live with dignity, but also the general interests of the community concerning the application of resources. Individualised justice may have to give way here to the general interests of the community." - at 204 (emphasis added) 3.22 As indicated above, this article was cited by the Constitutional Court in Dawood and Ano v Minister of Home Affairs and Others 2000 (3) SA 936 (CC). In that case, a unanimous Constitutional Court said the following concerning the right to dignity at para 35: "The value of dignity in our constitutional framework cannot therefore be doubted. The Constitution asserts dignity to contradict our past in which human dignity for black South Africans was routinely and cruelly denied. It asserts it too to inform the future, to invest in our democracy respect for the intrinsic worth of all human beings. Human dignity therefore informs constitutional adjudication and interpretation at a range of levels. It is a value that informs the interpretation of many, possibly all, other rights. This Court has already acknowledged the importance of the constitutional value of dignity in interpreting rights such as the right to equality, the right not to be punished in a cruel inhuman or degrading way, and the right to life. Human dignity is also a constitutional value that is of central significance in the limitations analysis. Section 10, however, makes it plain that dignity is not only a value fundamental to our Constitution, it is a justiciable and enforceable right that must be respected and protected." (emphasis in the original) 3.23 It is submitted that the applicants are oblivious to the proper place of dignity in the constitutional scheme. Indeed, the suggestion by Deeb that somehow significance should be placed, for constitutional purposes, (as opposed to moral or ethical obligations) on the donations made by various members of the PMA, misconceives the right to dignity. It demeans those who are poor and unable to afford medicines and relegates them to the role of supplicants dependent upon the largesse of the wealthy and the powerful. The State cannot discharge its constitutional obligations by relying on the charity of others. 3.24 The fact that donations have been made or significant price reductions offered to the State would have potential relevance to the exercise of the Minister's discretion in terms of section 15C. Clearly such donations or reductions would be factors that the Minister would be obliged to take into account. In this regard, two contentions are advanced: 3.24.1 First, the applicants misconceive the nature of discretionary powers. They refer repeatedly to the Minister having an "unfettered discretion". See, for example, PMA's Heads of Argument p 40 para 5.2.2; p 44 para 5.3.3 and p 52 para 5.4.2. At common law, all discretionary powers are subject to legal limits. An "unfettered discretion" is a contradiction in terms. Ismail and Ano v Durban City Council 1973 (2) SA 362 (N) at 371 H - 372 B 3.24.2 Second, all discretionary powers must be exercised in accordance with the Constitution. Metcash Trading Ltd v Commissioner for the South African Revenue Service & Ano 2001 (1) BCLR 1 (CC) at paras 40 - 42 Access to Health Care Services 3.25 Section 27 of the Constitution provides: "27 Health Care, Food, Water and Social Security (1) Everyone has the right to have access to - (a) health care services, including reproductive health care; (b) sufficient food and water; and (c) social security, including, if they are unable to support themselves and their dependants, appropriate social assistance. (2) The State must take reasonable legislative and other measures within its available resources, to achieve the progressive realisation of each of these rights. (3) No one may be refused emergency medical treatment." 3.26 Also of relevance is section 28(1)(c) of the Constitution which provides: "28 Children (1) Every child has the right - (a) ... (b) ... (c) to basic nutrition, shelter, basic health care services and social services ...." 3.27 The introduction of the interim Constitution and the final Constitution marked a decisive break with the past. The Constitution is not neutral on certain fundamental values. The Constitution contains a vision for the transformation of society in which the State has positive obligations. This has been reflected in several decisions of the Constitutional Court: 3.27.1 In S v Makwanyane 1995 (3) SA 391 (CC) Mahomed J observed at para 262: "In some countries the Constitution only formalises, in a legal instrument, a historical consensus of values and aspirations involved incrementally from a stable and unbroken past to accommodate the needs of the future. The South African Constitution is different: It retains from the past only what is defensible and represents a decisive break from, and a ringing rejection of, that part of the past which is disgracefully racist, authoritarian, insular and repressive, and a vigorous identification of and commitment to a democratic, universalistic, caring and aspirationally egalatarian ethos expressly articulated in the Constitution. The contrast between the past which it repudiates and the future to which it seeks to commit the nation is stark and dramatic." 3.27.2 In Soobramoney v Minister of Health, KwaZulu-Natal 1998 (1) SA 765 (CC) Chaskalson P stated at para 8: "We live in a society in which there are great disparities in wealth. Millions of people are living in deplorable conditions and in great poverty. There is a high level of unemployment, inadequate social security, and many do not have access to clean water or to adequate health services. These conditions already existed when the Constitution was adopted and a commitment to address them, and to transform our society into one in which there will be human dignity, freedom and equality, lies at the heart of our new constitutional order. For as long as these conditions continue to exist that aspiration will have a hollow ring." 3.28 The most significant decision on the ambit and justiciability of socio-economic rights is Government of the Republic of South Africa and Others v Grootboom and Others 2001 (1) SA 46 (CC). That case concerned, inter alia, section 26 of the Constitution which guarantees the right of "access to adequate housing". Section 26(2) is couched in almost identical terms to section 27(2) and imposes an obligation on the State to take reasonable legislative measures, within its available resources, to achieve the progressive realisation of this right. Hence, the judgment is closely analogous to the present case inasmuch as the legislation presently under consideration is, in the TAC's submission, a consequence of the State's duties, inter alia, pursuant to section 27(2) of the Constitution. 3.29 Dealing generally with the place of socio-economic rights in our Constitution, Yacoob J, on behalf of a unanimous Court, observed at paras 23 - 24: "[23] Our Constitution entrenches both civil and political rights and social and economic rights. All the rights in our Bill of Rights are inter-related and mutually supporting. There can be no doubt that human dignity, freedom and equality, the foundational values of our society, are denied those who have no food, clothing or shelter. Affording socio-economic right to all people therefore enables them to enjoy the other rights enshrined in Chapter 2. The realisation of these rights is also key to the advancement of race and gender equality and the evolution of a society in which men and women are equally able to achieve their full potential. [24] The right of access to adequate housing cannot be seen in isolation. There is a close relationship between it and the other socio-economic rights. Socio-economic rights must all be read together in the setting of the Constitution as a whole. The State is obliged to take positive action to meet the needs of those living in extreme conditions of poverty, homelessness or intolerable housing. Their interconnectedness needs to be taken into account in interpreting the socio-economic rights, and, in particular, in determining whether the State has met its obligations in terms of them." (emphasis added) The State's Positive Obligations 3.30 It is clear from the various constitutional provisions referred to above, that the State is under a positive duty to adopt certain measures. It is constitutionally required, for example, to take reasonable legislative and other measures within its available resources to achieve the progressive realisation of the right of access to health care services. The Constitutional Court, however, has interpreted the State's obligations more widely as appears from the extracts referred to above. 3.31 Section 7(3) of the Constitution places a duty on the State to "respect, protect, promote and fulfil the rights in the Bill of Rights." If the State were to stand by when efficacious drugs for the treatment of HIV/AIDS and associated infections are placed beyond the reach of most people in this country, it would ignore a profound threat to the fundamental rights of millions of South Africans to human dignity (s 10), health care (s 27), basic health care services for children (s 28(1)(c)) and to life itself (s 11). There is accordingly a pressing constitutional obligation on the State to take all measures at its disposal to reduce the price of these drugs. 3.32 It is in the context of these overarching constitutional obligations that the constitutional claims of the applicants in relation to sections 15C, 22F and 22G must be approached. The State's Obligations under International Law 3.33 The applicants correctly refer to section 39(1) of the Constitution which enjoins a court, when interpreting the Bill of Rights, to consider international law. What is conspicuously absent from the applicants' heads of argument, however, is a conspectus of all the relevant treaties which have a bearing upon the subject matter of the present case. Instead, there is a singular focus on TRIPS. It is submitted that this focus is far too narrow and avoids the many other relevant treaties referred to below. The Universal Declaration of Human Rights 3.34 Article 25 of the Universal Declaration of Human Rights, 1948 provides: "Article 25 1 Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control. 2 Motherhood and childhood are entitled to special care and assistance. All children, whether born in or out of wedlock, shall enjoy the same social protection." Article 22 provides: "Article 22 Everyone, as a member of society, has the right to social security and is entitled to realisation, through national effort and international cooperation and in accordance with the organisation and resources of each State, of the economic, social and cultural rights indispensable for his dignity and the free development of his personality." The International Covenant on Economic, Social and Cultural Rights, 1966 3.35 Article 12 of the International Covenant on Economic, Social and Cultural Rights, 1966 provides: "Article 12 1 The States' Parties to the present Covenant recognise the right of everyone to the enjoyment of the highest attainable standard of physical and mental health. 2 The steps to be taken by the States' Parties to the present Covenant to achieve the full realisation of this right shall include those necessary for: (a) the provision for the reduction of the stillbirth-rate and of infant mortality and for the healthy development of the child; (b) the improvement of all aspects of environmental and industrial hygiene; (c) the prevention, treatment and control of epidemic, endemic, occupational and other diseases; (d) the creation of conditions which would assure to all medical service and medical attention in the event of sickness." The Convention on the Rights of the Child, 1989 3.36 Article 24 of the Convention on the Rights of the Child, 1989 provides: 3.36 "Article 24 1 States' Parties recognise the right of the child to the enjoyment of the highest attainable standard of health and to facilities for the treatment of illness and rehabilitation of health. States' Parties shall strive to ensure that no child is deprived of his or her right of access to such health care services. 2 States' Parties shall pursue full implementation of this right and, in particular, shall take appropriate measures: (a) to diminish infant and child mortality; (b) to ensure the provision of necessary medical assistance and health care to all children with emphasis on the development of primary health care; (c) to combat disease and mal-nutrition, including within the framework of primary health care, through, inter alia, the application of readily available technology and through the provision of adequate nutritious foods and clean drinking-water, taking into consideration the dangers and risks of environmental pollution; (d) to ensure appropriate pre-natal and post-natal health care for mothers; (e) to ensure that all segments of society, in particular parents and children, are informed, have access to education and are supported in the use of basic knowledge of child health and nutrition, the advantages of breast-feeding, hygiene and environmental sanitation and the prevention of accidents; (f) to develop preventive health care, guidance for parents and family planning education and services. 3 States' Parties shall take all effective and appropriate measures with a view to abolishing traditional practices prejudicial to the health of children. 4 States' Parties undertake to promote and encourage international cooperation with a view to achieving progressively the full realisation of the right recognised in the present Article. In this regard, particular account shall be taken of the needs of developing countries." Convention on the Elimination of All Forms of Discrimination Against Women, 1979 3.37 Article 12 of the Convention on the Elimination of All Forms of Discrimination Against Women, 1979 provides: "Article 12 1 States' Parties shall take all appropriate measures to eliminate discrimination against women in the field of health care in order to ensure, on a basis of equality of men and women, access to health care services, including those related to family planning. 2 Notwithstanding the provisions of paragraph 1 of this Article, States' Parties shall ensure to women appropriate services in connection with pregnancy, confinement and the post-natal period, granting free services where necessary, as well as nutrition during pregnancy and lactation." 3.38 In Government of the Republic of South Africa and Others v Grootboom and Others 2000 (11) BCLR 1169 (CC), the Constitutional Court gave specific consideration to the obligations resting upon the State under international law. Consideration was given to the obligations under the International Covenant on Economic, Social and Cultural Rights. Reference was made, in that regard, to the United Nations Committee on Economic, Social and Cultural Rights. The Court referred to a report by this Committee in which the following was stated: "On the basis of the extensive experience gained by the Committee, as well as by the body that preceded it, over a period of more than a decade of examining States' Parties' reports the Committee is of the view that the minimum core obligation to ensure the satisfaction of, at the very least, minimum essential levels of each of the rights is encumbent upon every State Party. Thus, for example, a State Party in which any significant number of individuals is deprived of essential foodstuffs, of essential primary health care, of basic shelter and housing, or of the most basic forms of education, is prima facie, failing to discharge its obligations under the Covenant. If the Covenant were to be read in such a way as not to establish such a minimum core obligation, it would be largely deprived of its raison d'etre. By the same token, it must be noted that any assessment as to whether a State has discharged its minimum core obligation must also take account of resource constraints applying within the country concerned. Article 2(1) obligates each State Party to take the necessary steps 'to the maximum of its available resources'. In order for a State Party to be able to attribute its failure to meet at least its minimum core obligations to a lack of available resources it must demonstrate that every effort has been made to use all resources that are at its disposition in an effort to satisfy, as a matter of priority, those minimum obligations." Commenting on these observations, Yacoob J observed at para 30: "Accordingly, a State in which a significant number of individuals is deprived of basic shelter and housing is regard as prima facie in breach of its obligations under the Covenant. A State Party must demonstrate that every effort has been made to use all the resources at its disposal to satisfy the minimum core of the right. However, it is to be noted that the general comment does not specify precisely what the minimum core is." 3.39 In the context of a case such as the present, it is quite clear that having regard to the nature and scale of the HIV/AIDS epidemic there is a compelling case to be made that the State is under a duty both under the Constitution and at international law to ensure adequate access to health care. That is precisely the objective sort to be achieved by the provisions presently under consideration. 4 IRRATIONALITY AND ARBITRARINESS 4.1 At the core of the applicants' attacks is the necessity for demonstrating that the provisions in question are arbitrary or irrational. This is central to the attacks based upon the rule of law, property, equality and the regulation of a trade, occupation or profession. 4.2 The Constitutional Court has adopted the concept of "rationality review" in a variety of contexts. In so doing, it has expressly been influenced by the American jurisprudence in this field. This will be discussed in more detail below. The concept of "rationality review" has been adopted by the Constitutional Court in the following contexts: 4.2.1 The rule of law. Pharmaceutical Manufacturers Association of South Africa and Ano: In re: Ex Parte President of the Republic of South Africa and Others 2000 (2) SA 674 (CC) at paras 83-85 New National Party of South Africa v Government of the Republic of South Africa and Others 1999 (3) SA 173 (CC) at para 24 Fedsure Life Assurance Ltd and Others v Greater Johannesburg Transitional Metropolitan Council and Others 1999 (1) SA 374 (CC) at paras 56-57 4.2.2 Equality and discrimination. Prinsloo v Van der Linde and Ano 1997 (3) SA 1012 (CC) at para 25 Pretoria City Council v Walker 1998 (2) SA 363 (CC) at para 27 4.2.3 The regulation of economic activity. S v Lawrence; S v Negal; S v Solberg 1997 (4) SA 1176 (CC) at paras 42-44 4.3 With some minor exceptions, all of the applicants' challenges to sections 15C, 27F and 27G of the Act with which the TAC engages resolve into disputes over whether the provisions in question are rationally related to a legitimate government purpose. This is the test on which the applicants' case depends in so far as it relates to the fundamental rights to property (s 25(1)), equality (s 9(1)) and free choice of profession (s 22). It is also the test which governs the applicants' case in respect of the founding value of the rule of law (s 1(c)) in so far as that case is based on the contention that sections 15C, 22F and 22G of the Act are arbitrary. (There is a separate rule of law challenge to the relevant provisions based on the "void for vagueness" doctrine, but that is not a challenge which concerns the TAC). 4.4 It is therefore crucial, at the outset, to clarify the scope of a court's rationality review jurisdiction. It is an extraordinarily narrow scope, a fact which is reflected in the following: 4.4.1 In the seven years since the adoption of the interim Constitution there has not been a single case in which a law has been struck down by the Constitutional Court on the grounds that it fails to meet the standard of rationality review. 4.4.2 Over this period there is only one case in which an executive or administrative act has been struck down by the Constitutional Court for failing to meet the standard of rationality review: the first applicant's case to set aside a presidential proclamation bringing into force the South African Medicines and Medical Devices Regulatory Authority Act 132 of 1998. Pharmaceutical Manufacturers Association of SA and Another: in Re Ex Parte President of the Republic of South Africa and Others 2000 (2) SA 674 (CC) 4.4.3 Moreover, in the Pharmaceutical Manufacturers case it was common cause that the decision to bring the Act into force was irrational because the schedules upon which the Act depended for its efficacy had not yet been promulgated. The president in fact approached the court together with the first applicant to ask for his decision to be set aside and to explain that he had taken this decision on the basis of the mistaken belief that the relevant schedules were already in force. 4.5 The narrow scope of rationality review has been emphasized repeatedly by the Constitutional Court. It has stated that 4.5.1 rationality review is a "deferential" standard of review; New National Party of South Africa v Government of the Republic of South Africa and Others 1999 (3) SA 191 (CC) at para 122 (per O'Regan J dissenting, but not on this point) 4.5.2 a finding of irrationality is likely to be made only rarely; Pharmaceutical Manufacturers Association of SA and Another: in Re Ex Parte President of the Republic of South Africa and Others 2000 (2) SA 674 (CC) at para 90 4.5.3 a Court cannot in the name of rationality review strike down a decision or law simply because it disagrees with it or considers that is inappropriate or unreasonable; Pharmaceutical Manufacturers Association of SA and Another: in Re Ex Parte President of the Republic of South Africa and Others 2000 (2) SA 674 (CC) at para 90 New National Party of South Africa v Government of the Republic of South Africa and Others 1999 (3) SA 191 (CC) at para 24 4.5.4 rationality review does not entitle a court to make policy choices, because these must be left to the legislature; and Jooste v Score Supermarket Trading (Pty) Ltd (Minister of Labour Intervening) 1999 (2) SA 1 (CC) at para 17 S v Lawrence; S v Negal; S v Solberg 1997 (4) SA 1176 (CC) at paras 41-46 4.5.5 rationality review does not entitle a court to strike down a statute because it believes that the legislature could have achieved its desired ends through better means or means that are less invasive of private rights. Prinsloo v van der Linde and Another 1997 (3) SA 1012 (CC) at para 36 East Zulu Motors (Pty) Ltd v Empangeni / Ngwelezane Transitional Local Council and Others 1998 (2) SA 61 (CC) at paras 24 and 30 S v Lawrence; S v Negal; S v Solberg 1997 (4) SA 1176 (CC) at paras 41-46 4.6 All that rationality requires is that the legislation has a purpose that is not unconstitutional and that it is rational to believe that the legislation will advance this purpose. The fact that the legislation might, in the process of advancing its purpose, infringe private rights is not relevant in the rationality review enquiry. The existence of less invasive (or more reasonable) means to achieve the governmental purpose is, at constitutional law, a question of proportionality and not a question of rationality. Prinsloo v van der Linde 1997 (3) SA 1012 (CC) at para 36 East Zulu Motors (Pty) Ltd v Empangeni / Ngwelezane Transitional Local Council and Others 1998 (2) SA 61 (CC) at paras 24 and 30 S v Lawrence; S v Negal; S v Solberg 1997 (4) SA 1176 (CC) at paras 41-46 New National Party of South Africa v Government of the Republic of South Africa and Others 1999 (3) SA 191 (CC) at para 24 4.7 Thus the applicants are incorrect to suggest that issues such as "overbreadth" (PMA's Heads of Argument p 200, para 20.1.2.1) and "overshooting the mark" (PMA's Heads of Argument p 266 para 21.4.2.2) are relevant to the rationality enquiry. If Parliament uses a legislative sledgehammer to kill a gnat, provided that killing the gnat is a legitimate governmental object, the law that Parliament enacts does not fail rationality review. A law which is overbroad or which overshoots the mark may be disproportional and may therefore fail the balancing test of the limitations clause enquiry but provided that, within its excessive ambit, part of what it does is to promote a legitimate governmental purpose, the law is not open to challenge at the level of rationality review. 4.8 This distinction demonstrates a weakness that lies at the heart of much of the applicants' case. For the most part the applicants depend on fundamental rights which are afforded the weakest level of protection in the bill of rights. Sections 9(1), 22 and 25(1) are enforceable only by rationality review and therefore offer the applicants no more protection than the general rationality review they can invoke under section 1(c). In order to reach questions of proportionality, overbreadth and overshooting the mark, the applicants have to reach the limitations clause, section 36, and its requirement that limitations of fundamental rights be reasonable. However, if the applicant is unable to show that sections 15C, 22F and 22G fail the low test of rationality review, the provisions in question cannot be said to limit any of the fundamental rights protected by sections 9(1), 22 and 25(1) and questions of proportionality, overbreadth and overshooting the mark simply do not arise. 4.9 In S v Lawrence; S v Negal; S v Solberg 1997 (4) SA 1176 (CC) Chaskalson P specifically endorsed an approach consonant with the American jurisprudence on rationality review. The Court was there concerned with section 26 of the interim Constitution which guaranteed the right freely to engage in economic activity but did not preclude "measures designed to promote the protection or the improvement of the quality of life, economic growth, human development, social justice, basic conditions of employment, fair labour practices or equal opportunity for all, provided such measures are justifiable in an open and democratic society based on freedom and equality." The Court was invited to adopt a test for the legislative purpose based upon an objective probability that the purpose would be achieved. This was expressly rejected. Chaskalson P observed at paras 42 - 44: "[42] In the passage relied upon by the appellants Professor Mureinik argued for a more stringent test of legislative purpose - that there be an 'objective probability' that the purpose will be achieved. He was not, however, dealing there with 'economic freedom'. To apply that test to economic regulation would require a court to sit in judgment on legislative policies on economic issues. Courts are ill-equipped to do this and in a democratic society it is not their task to do so. In discussing legislative purpose Professor Hogg says: 'While a court must reach a definite conclusion on the adjudicative facts which are relevant to the disposition of litigation, the court need not be so definite in respect of legislative facts in constitutional cases. The most that the court can ask in respect of legislative facts is whether there is a rational basis for the legislative judgment that the facts exist. The rational-basis test involves restraint on the part of the court in finding legislative facts. Restraint is often compelled by the nature of the issue: For example, an issue of economics which is disputed by professional economists can hardly be definitively resolved by a court staffed by lawyers. The most that can realistically be expected of a court is a finding that there is, or is not, a rational basis for a particular position on the disputed issue. The more important reason for restraint, however, is related to the respective roles of court and legislature. A legislature acts not merely on the basis of findings of fact, but upon its judgment as to the public perceptions of a situation and its judgments as to the appropriate policy to meet the situation. These judgments are political, and they often do not coincide with the views of social scientists or other experts. It is not for the court to disturb political judgments, much less to substitute the opinions of experts. In a democracy it would be a serious distortion of the political process if appointed officials (the judges) could veto the policies of elected officials.' [43] This accords with the approach of the United States Supreme Court to rational basis review. It has consistently held: 'This restriction upon the judicial function, in passing on the constitutionality of statutes, is not artificial or irrational. The State legislature, in the enactment of laws, has the widest possible latitude within the limits of the Constitution. In the nature of the case it cannot record a complete catalogue of the considerations which move its members to enact laws. In the absence of such a record courts cannot assume that its action is capricious, or that, with its informed acquaintance with local conditions to which the legislation is to be applied, it was not aware of facts which afford reasonable basis for its action. Only by faithful adherence to this guiding principle of judicial review of legislation is it possible to preserve to the legislative branch its rightful independence and its ability to function.' [44] Section 26 should not be construed as empowering a court to set aside legislation expressing social or economic policy as infringing 'economic freedom' simply because it may consider the legislation to be ineffective or is of the opinion that there are other and better ways of dealing with the problem. If section 26(1) is given the broad meaning for which the appellants contend, of encompassing all forms of economic activity and all methods of pursuing a livelihood, then, if regard is had to the role of the courts in a democratic society, section 26(2) should also be given a broad meaning. To maintain the proper balance between the roles of the legislature and the courts section 26(2) should be construed as requiring only that there be a rational connection between the legislation and the legislative purpose sanctioned by the section." The passage cited from the United States Supreme Court is from the case of Carmichael, Attorney-General of Alabama v Southern Coal and Coke Co. (1937) 301 US 495 at 510; 81 L ed 1245 at 1253. The Court, in footnote 38, also referred to Federal Communications Commission v Beach Communications Inc (1993) 508 US 307; 124 L ed (2d) 211 and Lehnhausen v Lake Shore Auto Parts Co. (1973) 410 US 356; 35 L ed (2d) 351. The Court stated in paragraph 66, footnote 53 the following: "In the United States, the burden of negativing a rational connection between the legislation and legitimate government purpose is on the person challenging the validity of the legislation. 'Those attacking the rationality of the legislative classification have the burden to negative every conceivable basis which might support it.' FCC v Beach Communications Inc .... at 315. Whilst a section 26 analysis may call for a different approach, a rational basis review is one in which the legislature will be allowed considerable lee-way." Regardless of the test, the onus is on the applicants to demonstrate the absence of rationality. Prinsloo v Van der Linde and Ano 1997 (3) SA 1012 (CC) at para 36 and para 17 4.10 In Jooste v Score Supermarket Trading (Pty) Ltd (Minister of Labour Intervening) 1999 (2) SA 1 (CC) the Court, at para 17 stated: "It is clear that the only purpose of rationality review is an enquiry into whether the differentiation is arbitrary or irrational, or manifests naked preference and it is irrelevant to this enquiry whether the scheme chosen by the legislature could be improved in one respect or another." 4.11 The concept of the prohibition on "naked preferences" was first articulated by the Constitutional Court in Prinsloo v Van der Linde and Ano. 1997 (3) SA 1012 (CC) in the context of equality. The Court stated at para 25: "It is convenient, for descriptive purposes, to refer to the differentiation presently under discussion as 'mere differentiation'. In regard to mere differentiation the constitutional state is expected to act in a rational manner. It should not regulate in an arbitrary manner or manifest 'naked preferences' that serve no legitimate governmental purpose, for that would be inconsistent with the rule of law and the fundamental premises of the constitutional state. The purpose of this aspect of equality is, therefore, to ensure that the State is bound to function in a rational manner. This has been said to promote the need for governmental action to relate to a defensible vision of the public good, as well as to enhance the coherence and integrity of legislation." 4.12 The concept of "naked preferences", as appears from footnote 28, is taken from the article by Cass Sunstein "Naked Preferences and the Constitution" (1984) 84 Columbia Law Review 1689. A "naked preference" is the "raw exercise of political power". Sunstein puts the matter thus at 1693 - 4: "When a naked preference is at work, one group or person is treated differently from another solely because of a raw exercise of political power; no broader or more general justification exists. For example, State A may treat its own citizens better than those of State B - say, by requiring people from State B to pay more for the use of the local parks - simply because its own citizens have the political power and want better treatment. Or a city may treat blacks worse than whites - say, by denying them welfare benefits - because whites have the power to restrict State largesse to themselves. Or a State may relieve a group of citizens from a contractual obligation, thus benefiting them at the expense of another group of contracting parties, simply because the first group and its allies seized the political power to dispossess the second group of the rights that it previously had." Sunstein describes this conception as a weak form of constraint upon the exercise of governmental power. He states at 1696: "If courts are willing to hypothesise a public value as the basis for government action and do not require a close fit between the public value and the measure under review, all or almost all government action will be upheld. By contrast, if courts require a good reason to be believe that a naked preference was not in fact at work, many statutes may be invalidated. This consideration raises the question of how courts are to determine whether a public value accounts for legislation. Under a lenient test, any legislation for which such a value can be hypothesised is automatically valid. The fact that the statute satisfies the formal requirements for legislation, together with a not implausible connection between a public value and the statute under review, would suffice to validate it. A stricter test might focus on both the legislative process and the outcome in order to ensure against the possibility that even a formerly unobjectionable enactment was the result of a naked preference." At 1697 - 8 Sunstein states: "Modern rationality review is also characterised by extremely deferential means-ends scrutiny. The Supreme Court demands only the weakest link between a public value and the measure in question, and it is sometimes willing to hypothesise legitimate ends not realistically attributable to the enacting legislature. As a result, few statutes fail rationality review." Sunstein's observations are reflected in the case law. See for example: Munn v Illionois 94 US 77 Williamson v Lee Optical Co. 348 US 483 Ferguson v Shrupa 372 US 726; 10 L ed 2d Whalen v Roe 429 US 589; 51 L ed 2 d 64 Minnesota v Clover Leaf Creamery Co 449 US 456 See also: Nyambirai v National Social Security Authority and Ano 1995 (9) BCLR 1221 (ZSC) Irwin Toy Ltd v Quebec (A.G.) 39 CRR 193 (SCC) R v Ministry of Agriculture, Fisheries and Food: Ex Parte Hamble (Offshore) Fisheries Ltd [1995] 2 All ER 714 (GB) cited with approval in Durban Add-Ventures Ltd v Premier, KwaZulu-Natal and Others (No. 1) 2001 (1) SA 384 (N) Poswa v The Member of the Executive Council Responsible for Economic Affairs, Environment and Tourism (Supreme Court of Appeal, Case No. 175/99, 22 March 2001, unreported) The author is critical of the weak approach of the Supreme Court to rationality review and says that this phenomenon raises the question whether the court's commitment to the prohibition of naked preferences is merely rhetorical. What seems clear, however, is that the South African Constitutional Court, in referring to Sunstein's conception of "naked preferences" and in relying upon the American jurisprudence, has opted for a weak form of constraint. See also: Tribe American Constitutijonal Law (2nd ed) at 1451 at 1446 - 1450 4.13 Indeed, the Constitutional Court has drawn a clear distinction between rationality and reasonableness. In New National Party of South Africa v Government of the Republic of South Africa and Others 1999 (3) SA 191 (CC) Yacoob J, on behalf of the majority observed at para 24: "Courts do not review provisions of Acts of Parliament on the grounds that they are unreasonable. They will do so only if they are satisfied that the legislation is not rationally connected to a legitimate government purpose. In such circumstances, review is competent because the legislation is arbitrary. Arbitrariness is inconsistent with the rule of law which is a core value of the Constitution. It was within the power of Parliament to determine what scheme should be adopted for the election. If the legislation defining the scheme is rational, the Act of Parliament cannot be challenged on the grounds of 'unreasonableness'. Reasonableness will only become relevant if it is established that the scheme, though rational, has the effect of infringing the right of citizens to vote. The question would then arise whether the limitation is justifiable under the provisions of section 36 of the Constitution and it is only as part of this section 36 enquiry that reasonableness becomes relevant." See also: Prinsloo v Van der Linde and Ano 1997 (3) SA 1012 (CC) at para 35 4.14 Even in the context of an enquiry into reasonableness at the stage of limitation, requires a deferential approach to the policy choices of the legislature. This is made explicit by Chaskalson P in S v Makwanyane 1995 (3) SA 391 (CC) at para 104 where he stated that in the balancing process required at the stage of limitation "regard must be had to the provisions of section 33(1) and the underlying values of the Constitution, bearing in mind that, as a Canadian judge has said, 'the role of the court is not to second-guess the wisdom of policy choices made by legislators.'" 4.15 The mere fact that legislation is actuated by issues of socio-economic policy does not mean that it is beyond judicial scrutiny. To hold otherwise would negate the very concept of judicial review. In the realm of legislation such as the present, however, the courts both here and abroad, rightly adopt a cautious approach for three reasons: 4.15.1 First, courts are ill-equipped to make choices of socio-economic policy. 4.15.2 Second, courts are anxious to ensure a proper separation of powers and are reluctant to intrude into the executive or legislative realm. This is particularly important in a constitutional setting such as ours where judges are unelected yet have the power to strike down the enactments of a democratically elected legislature. 4.15.3 Third, courts are anxious to ensure that effective government is not paralysed by permitting indiscriminate challenges to matters of socio-economic policy. Absent strict constraints, virtually every legislative choice would be subject to attack. 5 THE CONSTITUTIONAL PROVISIONS RELIED UPON BY THE APPLICANTS The Right to Property 5.1 The right to property is protected by section 25 of the Constitution which states the following: "Property 25 (1) No one may be deprived of property except in terms of law of general application, and no law may permit arbitrary deprivation of property. (2) Property may be expropriated only in terms of law of general application - (a) for a public purpose or in the public interest; and (b) subject to compensation, the amount of which and the time and manner of payment of which have either been agreed to by those affected or decided or approved by a court. (3) The amount of the compensation and the time and manner of payment must be just and equitable, reflecting an equitable balance between the public interest and the interests of those affected, having regard to all relevant circumstances, including - (a) the current use of the property; (b) the history of the acquisition and use of the property; (c) the market value of the property; (d) the extent of direct state investment and subsidy in the acquisition and beneficial capital improvement of the property; and (e) the purpose of the expropriation." 5.2 Section 25 draws a distinction between "deprivation of property" and "expropriation of property". 5.2.1 The only constitutional protection against for deprivation of protection is that such deprivation must be non-arbitrary and must take place in terms of law of general application. 5.2.2 In cases of expropriation of property, section 25(2) imposes the additional requirements of a public purpose (or public interest) and payment of just and equitable compensation. 5.3 In Harksen v Lane NO and others the Constitutional Court emphasised that the constitutional protection given to property is premised on this "distinction between expropriation (or compulsory acquisition as it is called in some other foreign jurisdictions) which involves acquisition of rights in property by a public authority for a public purpose and the deprivation of rights in property which fall short of compulsory acquisition". Harksen v Lane NO and Others 1998 (1) SA 300 (CC) at para 32 (emphasis added) By casting the distinction between expropriation and deprivation in these terms the Constitutional Court associated itself with a long line of Commonwealth cases which have similarly held that interference with property rights which does not result in a transfer of the property in question to the State is not compensable as of constitutional right. Government of Malaysia v Selangor Pilot Association 1978 AC 337 (PC) Vora, H D v State of Maharashtra 1984 AIR 866 (SC) Hewlett v Minister of Finance 1982(1) SA 502 (ZSC) Chairman of the Public Service Commission and others v Zimbabwe Teachers Association and others 1997 (1) SA 209 (ZS) Davies and others v Minister of Lands, Agriculture and Water Development 1997 (1) SA 228 (ZS) 5.4 The applicants contend that section 25 recognizes some doctrine of constructive expropriation so that section 25(2) is implicated whenever a deprivation of property "goes too far" even if the deprivation does not result in the acquisition of the property in question by the State. This contention is unsustainable. It is based on the United States doctrine of "inverse condemnation" which has not been adopted in any Commonwealth country and which is inconsistent with the judgment of the Constitutional Court in Harksen and all the Commonwealth authorities upon which the Constitutional Court relied in Harksen. 5.5 The judgment of the Privy Council in Government of Malaysia v Selangor Pilots, which is the leading case in the line of Commonwealth authorities, illustrates that there is no scope for the doctrine of constructive expropriations in our law. Selangor Pilots concerned a law which effectively precluded any private organisation from conducting the business of providing pilot services in Selangor. The applicant association had been conducting such a business and alleged that the law was unconstitutional inter alia for its failure to provide compensation for the goodwill of their business which it had destroyed entirely. Viscount Dilhorne, speaking for the majority of the Privy Council, dismissed their claim in the following terms: "It may be that the association by its enjoyment over a considerable period of time of a monopoly in the provision of pilotage services had acquired a goodwill, the value of which would be reflected on a sale by it of its business and of which it was deprived by the amending Act. But, if that were so, it does not follow that the goodwill was acquired by the port authority from the association and in the opinion of the majority of their Lordships it was not." Government of Malaysia v Selangor Pilot Association 1978 AC 337 (PC) at 348 See also Hewlett v Minister of Finance 1982(1) SA 502 (ZSC) 5.6 As is clear from the passage in Harksen quoted above, the Constitutional Court has equated "expropriation" in section 25 with "compulsory acquisition" in the Commonwealth cases. There is, accordingly, no scope for a doctrine of inverse condemnation as constructive expropriation in South African Constitutional Law. The Right to Equality 5.7 Section 9 of the Constitution protects the fundamental right to equality. The applicants rely only on section 9(1) which states "Everyone is equal before the law and has the right to equal protection and benefit of the law. Equality includes the full and equal enjoyment of all rights and freedoms." 5.8 The amicus accepts the correctness of the applicants' submission at p 170 para 14.6.5 of their heads of argument that a law will fall foul of section 9(1) if it differentiates in a manner which is not rationally related to any legitimate governmental purpose. The Right to Free Choice of Profession 5.9 Section 22 of the Constitution states the following: "Freedom of trade, occupation and profession 22 Every citizen has the right to choose their trade, occupation or profession freely. The practice of a trade, occupation or profession may be regulated by law." 5.10 Unlike most of the rights in the Bill of Rights, section 22 is vested not in "everyone" but in "every citizen." In City of Cape Town v Ad Outpost (Pty) Ltd 2000 (2) BCLR 130 (C) Davis J commented on this distinction at 140F-G: "In my view section 22 introduces a constitutional protection to be enjoyed by individual citizens as opposed to juristic bodies. The right ensures that each citizen will have the right to choose how to employ his or her labour and skills without irrational government restriction. It is not a provision which should be extended to the regulation of economic intercourse as undertaken by enterprises owned by juristic bodies which might otherwise fall within the description of economic activity." In accordance with this reasoning, the right protected by section 22 is one which vests only in natural persons who are South African citizens. It is not a right which vests in any of the applicants other than the 42nd applicant. 5.11 Moreover, it is clear from the case law on section 22 and its predecessor, section 26 of the interim Constitution, that the only constitutional protection provided against legislation which restricts free choice of trade, occupation or profession is a requirement that this legislation must rationally pursue a legitimate government purpose. S v Lawrence; S v Negal; S v Solberg 1997 (4) SA 1176 (CC) City of Cape Town v Ad Outpost (Pty) Ltd 2000 (2) BCLR 130 (C) JR Investments CC and others v Minister of Safety and Security 1997 (7) BCLR 925 (E) 6 SECTION 15C OF THE ACT 6.1 Section 15C(a) of the Act provides for the overriding of rights under the Patent Act with respect to medicines that have been placed onto the market by the owner of such medicines or with his or her consent. 6.1 6.2 Section 15C(b) of the Act vests in the minister the power to make regulations governing the importation of medicines by a person other than the holder of the registration certificate of the medicine. 6.3 The applicants challenge the constitutionality of section 15C on various grounds. The amicus engages with the applicants only in respect of the challenges which are based on the fundamental right to property (s 25 of the Constitution) and the non-arbitrariness requirement of the rule of law (s 1(3) of the Constitution). Section 15C does not Expropriate Property 6.4 There is considerable debate between the applicants and the respondents on the full ambit of section 15C. For present purposes it is not necessary for the amicus to enter that debate. Even assuming that section 15C has the wide meaning contended by the applicants, the section does not expropriate property. 6.5 Section 15C undoubtedly interferes with rights under the Patents Act but it does not expropriate any property of the applicants because it merely potentially renders the rights in question nugatory, it does not appropriate them for the State, or indeed for anybody else. All that section 15C does is to permit certain competitors of a patentee to operate in ways that would ordinarily be considered to infringe the patentee's rights. It does not vest the patentee's rights in the State or these competitors. The patentee retains his or her patent covering the patented medicine and neither the State nor the privileged competitors acquire a patent for themselves over the medicine. The interference with the patentee's rights therefore cannot amount to an expropriation of property which is governed by section 25(2) of the Constitution. At best for the applicants it is a deprivation of property which is governed by section 25(1) of the Constitution. 6.6 As has been set out above, the only requirements imposed by section 25(1) of the Constitution in respect of deprivation of property is that it must be effected in terms of law of general application which is not arbitrary. Section 15C of the Act is clearly a law of general application. The section 25(1) case of the applicants must therefore stand or fall by their contention that section 15C is arbitrary, in other words, that the section will not pass rationality review. This is also the crucial test for the purposes of the section 1(c) rule of law challenge to section 15C with which the amicus engages. Section 15C is not Arbitrary 6.7 Section 15C clearly passes rationality review. The object pursued by the government in respect of the section is to provide, inter alia, for parallel importation of patented drugs so as to reduce the price of these drugs. The constitutional obligation on the State to reduce drug prices has been discussed above. The evidence shows that many drugs are sold in South Africa at a far higher price than in other countries and that parallel importation will serve to reduce drug prices. Ntsaluba p 1409-1411 para 49, pp 1423-1424 para 52(g) and pp 1449-1450 para 73(f) 6.8 The applicants do not dispute that section 15C will achieve its object of facilitating the parallel importation of drugs. Their complaint is that the measure is overbroad in that it will, in the process, interfere with their intellectual property rights in respect of drugs and do so in ways which are not necessary to promote parallel importation. PMA's heads of argument p 209 para 20.1.3 - p 226 para 20.1.5.2.5 6.9 The amicus does not concede that section 15C, properly interpreted, interferes with the intellectual property rights of the applicants in all the ways they contend. However, even assuming for the purposes of argument that the applicant's draconian interpretation of the section is correct, the applicant's case on the arbitrariness of the section must fail. Once it is clear that section 15C will, inter alia, provide for the parallel importation of brand name drugs and thereby contribute to reducing prices for these drugs, the section passes rationality review: it is rational to believe that, whatever else may or may not be unfortunate about the provision, it will contribute to the achievement of the important government purpose of reducing drug prices through parallel importation. 6.10 The applicants' complaints about section 15C are complaints about overbreadth. As has been shown above, these complaints have no place in a rationality review enquiry, they can only be raised in a proportionality enquiry under section 36 of the Constitution, the limitations clause. But the applicants never reach the limitations clause because they are unable to show that section 15C limits any fundamental right. 7 SECTION 22F OF THE ACT 7.1 Section 22F of the Act requires a pharmacist - 7.1.1 to inform members of the public holding a prescription for a brand name medicine of the benefits of substituting a generic equivalent for that brand name medicine, and 7.1.2 if the generic equivalent is not more expensive than the brand name medicine, to dispense it in place of the brand name medicine unless: 7.1.2.1 the patient expressly requires the pharmacist not to, 7.1.2.2 the prescribing doctor has inserted a written prohibition against substitution on the prescription, or 7.1.2.3 the Medical Control Council has declared the medicine not to be substitutable. 7.2 The applicants challenge section 22F on various grounds. The amicus engages only with the challenges which are based on the fundamental rights to property (s 25 of the Constitution), equality (s 9(1) of the Constitution) and free choice of profession (s 22 of the Constitution) and the non-arbitrariness requirement of the rule of law (s 1(3) of the Constitution). Section 22F does not Expropriate Property _ 7.3 It is doubtful that section 22F interferes with any property rights of the applicants. They contend that it violates their rights under section 34 of the Trade Marks Act 194 of 1993 relating to the unauthorised use of trade marks. The only case to which they refer in this regard is Abbott Laboratories and Others V UAP Crop Care (Pty) Ltd and Others 1999 (3) SA 624 (C), which concerned the wholly distinguishable situation of comparative advertising and does not support the applicants' contentions. 7.4 However, even assuming for the purposes of argument that section 22F does cause an infringement of the applicants' trade mark rights, such an infringement does not amount to a limitation of the applicants' rights under section 25 of the Constitution. Section 22F manifestly does not expropriate any property of the applicants. At best for the applicants, it renders certain of their trade mark rights nugatory. It does not appropriate them for the State, nor indeed for anybody else. All that section 22F does is to permit certain competitors of the proprietor or holder of a trade mark to be the trading beneficiaries of a prescription that identifies drugs by the trade mark. It does not vest the proprietor or holder's trade mark rights in the State or in these competitors. The proprietor or holder retains his or her trademark in respect of the drug and neither the State nor the generic manufacturing competitors acquire that trade mark with its associated rights. 7.5 The only case open to the applicants is therefore to contend that this alleged interference with trade mark rights amounts to a deprivation of property which, in terms of section 25(1) of the Constitution, may not be arbitrary. Thus the applicant's case must stand or fall by their contention that section 22F is arbitrary, in other words, that the section will not pass rationality review. This is also the crucial test for the purposes of the applicants equality and free choice of profession challenges to section 22F and for the section 1(c) rule of law challenge to section 22F with which the amicus engages. Section 22F is not Arbitrary 7.6 Section 22F is manifestly not arbitrary. The section assists to discharge the constitutional obligation resting on the State to promote cheaper access to drugs. It does so by requiring generic substitutes to be prescribed in place of brand name drugs which retail at a price which is not cheaper than that of the generic substitutes. 7.6 Gray Amicus Reply: pp 4522-4527 paras 22-32.3 7.7 The general extent to which brand name drugs exceed the price of generic substitutes is canvassed extensively on the papers. The relevant passages are discussed in the respondents' heads of argument and will not be repeated here. See Respondent's heads of argument p 143: para 208 - p 151 para 210 7.8 As has been pointed out above, in the specific context of HIV/AIDS medication, Dr Goemaere shows how the promotion of generic substitution in Brazil has led to a 70% reduction in the price of the anti-retroviral drugs Goemaere Amicus Application p 3512 paras 28-29 and p 3513 para 32 7.9 Goemaere also describes an offer by Cipla Ltd, an Indian manufacturer of generic anti-retrovirals to provide its drugs to Medicine Sans Frontiers at a price which is less than 10% of the wholesale price currently charged for the same product in South Africa. Goemaere Amicus Application p 3513 para 34 Goemaere Amicus Reply: p 4859 paras 15 - 17 See also: Perez-Casas Amicus Reply: pp 4302-4303 paras 11.1 - 11.2 7.10 The generic substitutes ('interchangeable multi-source medicines') are defined in section 1 of the Act to mean - "medicines that contain the same active substances which are identical in strength or concentration, dosage form and route of administration and meet the same or comparable standards, which comply with the requirements for therapeutic equivalence as prescribed." 7.11 The effect of section 22F therefore is to ensure that where there are available both a brand name drug and a generic substitute which is, in the terms set out in the Act, identical to that drug, the cheaper of the two identical drugs will be prescribed, unless the patient, his or her doctor, or the Medicines Control Council require otherwise. There is an obvious relationship between the Act and the laudable government purpose of promoting cheaper access to drugs. Moreover, once it is conceded, as it must be, that the section also has the effect of minimising perverse incentives, a self-evident legitimate purpose, it is simply no answer to say that the same result is achieved by other sections (ss 18A, B and C) of the Act. Deeb Supplementary Answering Affidavit: p 3851 para 9.1.13 Geffen Amicus Application: p 3530 paras 7-8 Ntsaluba Replying Affidavit pp 4898-4899 paras 19.1-19.5 Van den Heever Amicus Reply: pp 4361-4363 paras 58-64 7.12 The applicants complain that generic substitutes are prescribed by the Act even where they retail at the same price as a brand name drug. This is correct, but there is nothing per se offensive about such prescription. It is open to the legislature to express this marginal preference for generic substitutes as a way of promoting the entry of generic substitutes onto the market after a brand name has had a lengthy period of patent exclusivity in which to cultivate market links with pharmacists and prescribing doctors. The entry of generic substitutes has to be promoted in terms of the scheme of the Act because, without the existence of competition from generic substitutes there will be no incentive for drug companies to reduce the price of brand name drugs. 7.13 Section 22F also serves a range of other rational purposes: 7.13.1 The obligation upon the pharmacist to inform members of the public of the benefits of the substitution for a branded medicine of an interchangeable multi-source medicine serves the self-evident advantage of imparting information to a patient crucially relevant to the patient's physical and economic well being. In so doing, the section gives expression to the constitutional rights of access to information and the right to receive information. The obligation imposed upon the pharmacist assumes particular importance in an esoteric field in which the pharmacist has specialised expertise and knowledge of which members of the public would generally be ignorant. Ntsaluba Replying Affidavit: pp 4903-4 paras 29.1 - 29.3 Supplementary Answering Affidavit of Steele: pp 4255-6 paras 23.1 - 23.2 7.13.2 The further obligations imposed upon the pharmacist have the laudable consequence of acting as a safeguard to ensure the clinical independence of prescribing doctors and the reduction of the risk that pharmacists and prescribing doctors may receive incentives to prescribe and dispense particular medicines. The applicants do not dispute this. They merely contend that this objective is achieved by other sections. This, however, is no answer and cannot affect the validity of the section. 7.13.2 8 SECTION 22G OF THE ACT 8.1 Section 22G of the Act vests a delegated power in the Minister, acting on the recommendation of a pricing committee, to make regulations on the introduction of a transparent pricing system for drugs and maximum dispensing fees to be charged by pharmacists. In terms of section 22G(3)(a), the transparent pricing system will provide for single exit prices for drugs to be published, and manufacturers selling drugs to anyone other than the state, shall be obliged to do so at this exit price. A pharmacist or other dispenser may then add a dispensing fee onto the exit price when the drugs are sold on to the public. 8.2 The applicants challenge section 22G on the grounds that it is irrational and therefore violates the fundamental value of the rule of law protected by section 1(c) of the Constitution, the guarantee of equality before the law (s 9(1)) and the protection of free choice of trade, occupation and profession (s 22). This challenge is without foundation. 8.3 Section 22G is rationally related to two legitimate government purposes: 8.3.1 First, it ensures that, at least in so far as price is concerned, private persons have equal access to drugs throughout the Republic. A single exit price and a maximum dispensing fee ensure that no person's ability to pay privately for the drugs on which their health depends will vary according to the part of the country in which they live. That, in itself, is sufficient to justify the provision in terms of rationality review. 8.3.2 Section 22G does, however, have a second, less obvious purpose. 8.3.2.1 In the context of the broad range of measures introduced by the Act to promote access to cheaper drugs, section 22G eliminates the scope for drug companies to adopt a range of anti-competitive measures which have been used to entice pharmacists and other dispensers to promote their drugs rather than lower priced drugs of competitors. The range and effect of these incentives are discussed in the answering affidavit. Ntsaluba pp 1550-1554 para 187(b) They involved a variety of schemes (based on discounts, samples, and bonuses) in terms of which drug companies shared their broad profit margins with some doctors and pharmacists at no benefit to the public, and in the process provided the doctors and pharmacists with an obvious incentive to continue prescribing their higher priced drugs in preference to those of their competitors. See also Geffen Amicus Application Annexure AA8, p 3530 paras 7-8 8.3.2.2 By eliminating the scope for drugs to be sold to different doctors and pharmacists at different prices section 22G removes the scope for drug companies to "reward" doctors and pharmacists who sell their products exclusively and to "punish" doctors and pharmacists who sell a competitive range of products. In so doing, it promotes a competitive local market in drugs. By limiting doctors and pharmacists to a maximum dispensing fee and removing the scope for them to share profit margins on drugs with drug companies, section 22G helps to reduce the cost of drugs. 8.3.2.3 This second broad purpose that is pursued by section 22G is accordingly independently sufficient for the provision to pass scrutiny in terms of rationality review. 9 THE JUSTIFICATION FOR SECTIONS 15C, 22F AND 22G Section 15C 9.1 For the reasons set out above, it is submitted that sections 15C, 22F and 22G of the Act do not limit any fundamental rights of the applicants. In the event that these submissions are rejected, the amicus accepts that section 15C of the Act cannot be justified in terms of section 36 of the Constitution because it lacks proportionality. In particular, the amicus concedes that section 15C is insufficiently tailored to meet its purpose of providing for parallel importation to be saved under section 36 of the Constitution. (See PMA's Heads of Argument pp 201-209 paras 20.1.2.2 - 20.1.2.2.3) However, section 15C can be saved by a process of severance or reading in. 9.1 9.2 It has been recognised by the Constitutional Court that there is something akin to a presumption of constitutionality. This was expressly acknowledged in section 35(2) of the interim Constitution which provided: "No law which limits any of the rights entrenched in this Chapter, shall be constitutionally invalid solely by reason of the fact that the wording used prima facie exceeds the limits imposed in this Chapter, provided such a law is reasonably capable of a more restricted interpretation which does not exceed such limits, in which event such law shall be construed as having a meaning in accordance with the said more restricted interpretation." 9.3 Section 35(2) was not repeated in the final Constitution. In De Lange v Smuts NO and Others 1998 (3) SA 785 (CC) Ackermann J stated at para 85 that this omission in no way altered the proper approach to constitutional adjudication. He stated: "The fact that the provisions of section 35(2) of the interim Constitution have not been repeated in the 1996 Constitution is therefore irrelevant to the decision in the present matter. In any event, they do no more than give expression to a sound principle of constitutional interpretation recognised by other open and democratic societies based on human dignity, equality and freedom such as, for example, the United States of America, Canada and Germany, whose Constitutions, like our 1996 Constitution, contain no express provision to such effect. In my view, the same interpretive approach should be adopted under the 1996 Constitution." 9.4 Striking down legislation is a drastic remedy. If there are remedial measures short of striking down, these should be adopted. If the applicants' contentions concerning overbreadth have validity, the remedy, in a case such as the present, is actual or notional severance or reading in. In this regard, Ackermann J in National Coalition for Gay and Lesbian Equality v Minister of Home Affairs 2000 (2) SA 1 (CC) stated at para 63: "The device of notional severance can effectively be used to render inoperative portions of a statutory provision, where it is the presence of particular provisions which is constitutionally offensive and where the scope of the provision is too extensive and hence constitutionally offensive, but the unconstitutionality cannot be cured by the severance of actual words from the provision." 9.5 In Ferreira v Levin NO and Others 1996 (1) SA 984 (CC) an order of notional severance was made. The order in para 157 reflects the following: "The provisions of section 417(2)(b) of the Companies Act 1973 are, with immediate effect declared invalid, to the extent only that the words 'and any answer given to any such question may thereafter be used in evidence against him' in section 471(2)(b) apply to the use of any such answer against the person who gave such answer, in criminal proceedings against such person, other than proceedings where that person stands trial on a charge relating to the administering or taking of an oath or the administering or making of an affirmation or the giving of false evidence or the making of a false statement in connection with such questions and answers or a failure to answer lawful questions fully and satisfactorily." The Court also recognised the permissibility of reading words into a statute in appropriate circumstances. Whether the remedy takes the form of severance or reading in, the governing principle is to ensure that form is not placed above substance so as to result in anomaly (at para 69). 9.6 Based on the aforegoing, three remedial possibilities present themselves: 9.6.1 First, section 15C may be subject to actual severance by deleting sub-paragraph (a). 9.6.2 Second, section 15C(a) may be subject to notional severance along the following lines: Section 15C(a) is declared unconstitutional to the extent that the words "notwithstanding anything to the contrary contained in the Patents Act, 1978" shall not be construed to permit any derogation from the Patents Act other than parallel importation. 9.6.2 9.6.3 Third, words may be read into section 15C(a) along the following lines: "Notwithstanding anything to the contrary contained in the Patents Act, 1978, dealing with parallel importation ..." 9.7 It is submitted that the second and third alternatives offer the most appropriate remedy should the applicants' argument on overbreadth succeed. Sections 22F and 22G 9.8 If this Honourable Court should hold, contrary to the submission of the TAC, that sections 22F and 22G of the Act limit the fundamental rights of the applicants, the TAC submits that any such limitation is justifiable under the limitations clause. 9.9 The application of the limitation clause involves a process, described in S v Makwanyane 1995 (3) SA 391 (CC) at para. 104 as "the weighing up of competing values, and ultimately an assessment based on proportionality ... which calls for the balancing of different interests". This case was decided under the Interim Constitution. However, in the National Coalition for Gay and Lesbian Equality v Minister of Justice the Constitutional Court confirmed that - "the relevant considerations in the balancing process are now expressly stated in section 36(1) of the 1996 Constitution to include those itemised in paragraphs (a) to (e) thereof. In my view this does not in any material respect after the approach expounded in Makwanyane, save that paragraph (e) requires that account be taken in each limitation evaluation of 'less restrictive means to achieve the purpose [of the limitation]'. Although section 36(1) does not expressly mention the importance of the right, this is a factor which must of necessity be taken into account in any proportionality evaluation" National Coalition for Gay and Lesbian Equality v Minister of Justice & Others 1999 (1) SA 6 (CC) at para 34 The Court stated further at para 35: "The balancing of different interests must still take place. On the one hand there is the right infringed; its nature its importance in an open and democratic society based on human dignity, equality and freedom; and the nature and extent of the limitation. On the other hand there is the importance of the purpose of the limitation. In the balancing process and in the evaluation of proportionality one is enjoined to consider the relation between the limitation and its purpose as well as the existence of less restrictive means to achieve this purpose". 9.10 The purpose of sections 22F and 22G of the Act is, inter alia, to promote cheaper access to drugs. As has been discussed above, this is a commendable purpose, and, in the context of the HIV/AIDS epidemic, a constitutional obligation of the highest order linked to the duty of the State to respect, protect, promote and fulfil a number of fundamental rights including the rights to human dignity and life which Chaskalson P in the Makwanyane case held to be "the source of all other rights". S v Makwanyane and Another 1995 (3) SA 391 (CC) at para 84 To the extent that sections 22F and 22G of the Act may be held, contrary to the submissions of the TAC, to effect some limitations of the applicants' rights to property, equality or free choice of trade, occupation and profession, any such limitation is clearly outweighed by the constitutionally privileged purpose of the sections, and the sections are accordingly justifiable under the limitations clause. 10 CONCLUSION 10.1 For the reasons set out above, it is submitted that there is no merit to the following challenges to the Act made by the applicants: 10.1.1 the challenges to section 15C based on the fundamental right to property (s 25 of the Constitution) and the non-arbitrariness requirement of the rule of law (s 1(3) of the Constitution), 10.1.2 the challenges to section 22F based on the fundamental rights to property (s 25 of the Constitution), equality (s 9(1) of the Constitution) and free choice of profession (s 22 of the Constitution) and the non-arbitrariness requirement of the rule of law (s 1(3) of the Constitution), and 10.1.3 the challenges to section 22G based on fundamental rights to equality (s 9(1) of the Constitution) and free choice of profession (s 22 of the Constitution) and the non-arbitrariness requirement of the rule of law (s 1(3) of the Constitution). G J MARCUS S.C. MATTHEW CHASKALSON Counsel for Amicus Curiae Chambers Johannesburg 17 April 2001