Leaked PharmaGate emails Prove Big Pharma Involvement in Scandal

CAPE TOWN, 21st January: A leaked industry email published by Knowledge Ecology International (KEI) yesterday proves the direct involvement of multinational pharmaceutical companies and the Innovative Pharmaceuticals Association of South Africa (IPASA) in the PharmaGate scandal. Despite attempting to distance themselves from the plot in public statements since the Mail & Guardian broke the story on Friday 17 January 2014, the leaked email illustrates that both IPASA and US-based industry body PhRMA (the Pharmaceutical Researchers and Manufacturers of America) actively selected the “high calibre consultancy group” – PAE – to subvert the South African intellectual property law reform process and that IPASA’s intellectual property committee was ready to proceed with the proposed plot with “urgency”.

The leaked email in question was sent to IPASA members on January 10th by Michael Azrak, the Managing Director of Merck Southern and East Africa and Head of IPASA’s Intellectual Property Committee. A copy of the e-mail can be found here[1].

The email provides damning evidence that IPASA has been misleading the public on three key points since the story broke on Friday:

1. Firstly IPASA have claimed that they havenot engaged the consultancy PAE to lobby on intellectual property or any other matter in South Africa”, rather PAE sent this proposal to IPASA speculatively. This is disingenuous and is contradicted in the leaked email that states:

“As we agreed at the last Board meeting in December, we have moved ahead in identifying a high calibre consultancy group to work with us. The group selected is Public Affairs Engagement (PAE)… This group was selected after a detailed process, where we received proposals from a number of agencies both local and international. The final selection was carried out in consultation with PhRMA.”

2. Secondly IPASA have claimed on multiple occasions that they did not support the contents of the plot and that “PAE submitted a proposal for a campaign, which was reviewed and subsequently rejected by IPASA members.”  Val Beaumont, IPASA’s Chief Operating Officer stated on SAfm (Monday 20th January, Forum@8) that the plot had not been ‘taken from us’ and did not use ‘our words’. Again this is a misleading response. The leaked email shows that Azrak, within his capacity as Head of IPASA’s Intellectual Property Committee, clearly endorsed the proposed plot and called for swift action:

“Please revert by COB next Wednesday January 15, if you or your above country teams have any concerns or reservations activating Stage 1 of the campaign (January 15 – February 15). We can gain agreement on Stage 2 activation at the next IPASA board meeting on February 5. If I do not receive a response from you, then we will assume you and your Global organisations are in agreement with moving ahead with Stage 1…. I’m sure you can sense my urgency, however, we have been successful to date as we have maintained our momentum. We can’t afford to wait until February to get this campaign moving.”

If the PAE proposal has been rejected, as Ms Beaumont states, it appears that this was only AFTER the document was leaked to the media and the uproar that followed.

3. Finally IPASA have claimed that “no payment or pledge has been made in any respect.” Yet again, the leaked email provides evidence to the contrary stating:

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

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

  • We call on individuals at Merck, IPASA, PhRMA and all member companies of IPASA and PHRMA to explain and clarify their involvement in the PharmaGate plot.
  • We call on Merck to state publically whether they support the views expressed by Michael Azrak in the leaked e-mails and whether they will continue to employ Azrak in his current position.
  • We call on IPASA to state whether they will replace Azrak as the Head of their Intellectual Property Committee.
  • We ask the members of IPASA whether they will maintain Val Beaumont as Chief Operating Officer, given that she has misled the South African public.

For media enquiries please contact:

Vuyiseka Dubula – TAC General Secretary

+27 82 763 3005

Lotti Rutter – TAC Senior Researcher

+27 81 818 8493


Notes to editors:

  • The TAC will be publishing a full analysis of the leaked documents and PharmaGate scandal by the end of this week.
  • The TAC does not dispute the right of any party to lobby government for or against the IP policy. However, in our view the proposed plot exposed by the Mail & Guardian last Friday goes far beyond what could be considered acceptable lobbying. The proposed plot would have created a front organization called Forward South Africa, headed by a prominent black South African, and would have had the feel of a political movement – but in reality it would have been run from the United States. The obvious intention would have been to mislead the public into believing that Forward South Africa was an authentic local organization.
  • The plot would also have commissioned ‘independent’ research that would after the fact have been sent to the United States to be massaged to ‘suit the message’. In other words, seemingly rigged research would have been used to delay the finalization of the IP policy.

[1] KEI, 20 January: ‘New leaked Merck missive reveals deep drug, medical device company opposition to South African patent reforms’ http://keionline.org/node/1908

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