The withdrawal last week of the case against the South African government by the country's Pharmaceutical Manufacturers Association and 39 drug companies (see page 1013) should be widely welcomed. After more than three years of attrition, it is high time that the industry and government begin to work together to address mother-to-child transmission of HIV, as well as the treatment of South Africa's estimated half a million AIDS sufferers.

The ball now lies in the court of the South African government, which can no longer remain paralysed over AIDS policy. The reaction of its health minister, Manto Tshabalala-Msimang, has been disappointing. Her statement that the government has no intention of importing antiretrovirals in the near future raises suspicions that the government refuses to confront the realities of the country's predicament. The same is true of her claims that treating opportunistic infections and providing adequate nutrition will permit AIDS sufferers to “function adequately”.

No one is under any illusions that the next steps will be easy: South Africa is estimated to have the greatest number of HIV-positive people — 4.7 million — of any nation. But its medical infrastructure is, by the standards of the developing world, relatively good, and most of its population is urban and has access to treatment. In many parts of the country the capacity to administer the drugs adequately and effectively is in place, despite government claims to the contrary. It would be tragic if AIDS sufferers and unborn children were not to benefit from the offers of cheap or free drugs.

In most cases, the offers from manufacturers are confined to the government sector. Drug companies would do well to consider the example of GlaxoSmithKline in extending its offer of reduced prices to non-governmental organizations and private employers who offer care to their staff through clinics at their own workplace. But this can nonetheless serve only a fraction of the people who could potentially benefit from concerted government action.

Tshabalala-Msimang is in Europe next month to negotiate with the drug companies on the regulations regarding the South African legislation. Reportedly, the South African government has undertaken to confine parallel importation of drugs to branded versions under patent in South Africa rather than import generic copies, and to issue compulsory licences in compliance with the Patents Act. This should reduce disparities in drug prices between markets, while enshrining intellectual property rights. Such a compromise should hopefully be reflected in good legislation, but that will serve little purpose unless it is applied.

The end of the South African suit will switch attention to the possible action being brought against Brazil within the World Trade Organization (WTO), backed by the Pharmaceutical Research and Manufacturers of America. The association says Brazil is flouting the treaty relating to intellectual property rights by making cheap copies of patented AIDS drugs. The case will soon go before the WTO, and hopefully, as in South Africa, the outcome will be a realistic compromise. Brazil is an example of how a relatively poor country can treat AIDS — admittedly significantly less prevalent than in South Africa — if it has access to cheaper generic drugs: AIDS deaths have halved since the government began providing cut-price treatment. The South African government should seize the opportunity to follow that example, with its own hard-won compromise from industry behind it.