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BIO-IPR docserver

By Rachel Wynberg*

The CSIR signed a groundbreaking agreement with the San this week that might earn the impoverished group hundreds of millions of rands for the commercialisation of an ancient folk remedy as a blockbuster anti-obesity drug. Ben Ngubane, Minister of Arts, Culture, Science and Technology, announced the agreement at a celebration in the Kalahari on Monday. The deal is one of the first attempts to give holders of traditional knowledge a share of royalties from drug sales. But what does it really mean for the San and indigenous peoples worldwide: business as usual or a fundamentally new way of introducing equity into the marketplace?

The appetite suppressant, code-named "P57", is derived from a species of Hoodia, a succulent plant indigenous to southern Africa and long used by the San to stave off hunger and thirst. Active constituents of the plant have been patented by the CSIR, which learned of its potential through ethnobotanical publications. In 1998, the CSIR signed a licensing agreement for the further development and commercialisation of the product with Phytopharm, a small British phytomedicine company. Pfizer, the US pharmaceutical giant, then signed a deal with Phytopharm to develop a prescription drug that has a potential of between $1-billion and $8-billion a year. Pfizer will pay Phytopharm royalties for use of the patents and Phytopharm in turn will pay the CSIR. Already, testing of the drug is at an advanced stage in clinical trials.

Until recently, agreements for the commercialisation of Hoodia had proceeded apace without acknowledgement of the contribution of the San, let alone their informed consent. Phytopharm claims the CSIR had told them that the 100 000-strong San had "all but died out". Ironically, CSIR’s failure to consult with the San early in the commercial development of Hoodia considerably strengthened the bargaining arm and political leverage of the San, resulting in a high-profile case followed throughout the world. In contrasting images of emaciated San and obese Americans, and reinforcing popular notions of "biopiracy" by large pharmaceutical companies, the media galvanised public pressure, compelling CSIR to enter into negotiations with the San. In 2002 this resulted in a Memorandum of Understanding between the San and CSIR formally recognising the San as originators of traditional knowledge associated with human use of Hoodia, or xhoba as the plant is locally known.

This week a concrete deal to share financial benefits was struck between the two parties. The CSIR will pay the San 6% of all royalties Phytopharm receives for product sales, and 8% of all milestone payments received when certain performance targets are reached over the next three to four years while the product is being developed. If a product is successfully commercialised, the money will be paid into a Trust set up by the CSIR and the South African San Council to uplift the standard of living and well-being of the San peoples of southern Africa. The Trust will include representatives of the CSIR, the =Khomani, !Xun and Khwe, other San stakeholders in southern Africa, the Working Group of Indigenous Minorities in Southern Africa, and the Department of Science and Technology, with strict rules determining the distribution of funds to beneficiaries. The agreement commits the parties to conserve biodiversity, requires the CSIR to grant the San access to existing study bursaries, and, significantly, lay the ground for further collaboration in bioprospecting.

While this agreement must be heralded as a historic breakthrough, certain concerns impede a wholehearted endorsement. Most notably, the San will receive only a fraction of a percent – less than 0.003% - of net sales. The San’s money will come from the CSIR’s share, while profits received by Phytopharm and Pfizer will remain unchanged. The San, in other words, will receive only a miniscule sliver of a large, well-iced cake. Not only are Pfizer and Phytopharm exempt from sharing their king-sized portions, but also are protected by the agreement from any further financial demands by the San. Moreover, the agreement explicitly prevents the San from using their knowledge of Hoodia in any other commercial application.

There are also other concerns. Chief amongst them is that the agreement is confined almost exclusively to monetary benefits, which hinge on product sales and successful commercialisation. Yet commercialisation is far from certain, highlighting the need for a more comprehensive and holistic approach to benefit-sharing that is not exclusively financial, is not contingent on successful drug development, and provides immediate and tangible benefits to the San. Already, the CSIR has received funds related to P57 yet there is no indication that this money will be used to assist the San with training in cultivation, harvesting of material for clinical trials, education, conservation and capacity building.

Additional worries include the fraught questions of administering the funds, of determining beneficiaries and specific benefits across geographical boundaries and within different communities, and of minimising the social and economic impacts and conflicts that could arise with the introduction of large sums of money into impoverished communities. A critical moral dilemma relates to the patenting and privatisation of knowledge. In communities such as the San, the sharing of knowledge is a culture and basic to their way of life. The patenting of active compounds of Hoodia by the CSIR runs counter to this belief, yet brings with it greater financial returns – and higher risks – than the commercialisation of a non-patented herbal medicine. Bringing these two worldviews of intellectual property together is no easy task and raises fundamental ethical questions for a future working relationship, more especially if research continues to be focused on diseases of the rich such as obesity.

Despite these flaws there is no doubt that the agreement has set important international and national precedents. For the CSIR, this case is set to change the way in which the institute approaches benefit-sharing and its recognition of holders of traditional knowledge, a matter of particular importance given its primary involvement in bioprospecting in South Africa and the region. For the San, the potential injection of substantial amounts of money will bring risks, but also profound opportunities in the form of secure land ownership, increased political muscle, improved livelihoods and a wide suite of development options. For both parties, the agreement represents only the start of a longer-term bioprospecting collaboration based on the San’s extensive knowledge of biodiversity. "Getting it right" has never been more important.

Rachel Wynberg is an independent environmental policy analyst, affiliated with the Universities of Cape Town and Strathclyde, where she conducts research on the commercialisation of biodiversity in southern Africa. She is also a founding member and trustee of Biowatch South Africa.


NOTE: Rachel Wynberg, an associate of Biowatch South Africa, offers a more critical look at the agreement signed last week between CSIR and the San (see previous BIO-IPR of today). She can be contacted at

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