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It is not the first time drug-makers have clashed with Pretoria. A decade ago the industry was forced to climb down in a bruising battle over Aids drugs patents and access to generics.
The latest fight reflects tension between an industry that wants to protect its intellectual property and profits as it pushes further into emerging markets, and governments from India to Brazil that are determined to increase patients' access to life-saving treatments.
Final stages
South Africa is in the final stages of implementing a new law that would allow generic drug-makers to produce cut-price copies of patented medicines and make it harder for firms to register and roll over patents.
Global drug-makers have drawn up a $600 000 publicity campaign to mobilise local and overseas opposition to the changes, according to a document written by a drugs industry lobby group and seen by Reuters.
Minister of Health Aaron Motsoaledi lashed out at drug makers, saying their campaign was aimed at turning South Africans against the government.
"It's a conspiracy of satanic magnitude," he said. "This document can sentence many South Africans to death. This is a plan for genocide."
Sharing may help
Ellen 't Hoen, a campaigner on access to medicines in poor countries and founding director of the Medicines Patent Pool that has encouraged companies to share Aids drug patents, said the drug makers' planned campaign was a big mistake.
"How can industry not have learned its lessons after being burnt so badly before in South Africa?" she said.
Medecins Sans Frontieres, a long-time industry critic, said reform of South Africa's intellectual property (IP) laws was long overdue and the drug companies' campaign was "outrageous".
"The draft IP policy includes reforms that are not radical. For instance, the proposed patent examination system would reward truly innovative patents and weed out frivolous applications," said Julia Hill, MSF South Africa Access Advocacy Officer.
Cutting healthcare costs
The ruling African National Congress is looking to cut healthcare costs as it grapples with the world's heaviest HIV/Aids caseloads and its biggest treatment programme.
The new law is expected to reduce medicine prices and open up a fledgling generic drug industry dominated by Aspen Pharmacare and Adcock Ingram.
Many Aids drugs are now available as cheap generics – though newer ones are still patented – but campaigners said the government proposals could also improve access to costly treatments for other diseases, including cancer.
The new policy would close a loophole known as "ever-greening" that allows a drug maker to make minor changes to an existing drug or discover a new use for it, and then register it as a totally new find.
The need for reform
Healthcare activists say South Africa's track record of approving drug patents shows the need for reform – in 2008 it granted more than 2 400 patents compared with fewer than 300 in six years in Brazil.
Brazil and India, both of which have significant domestic generic drug industries, have taken a particularly tough line in limiting the award of patents to multinational drug makers.
In India, this led to a high-profile showdown with Novartis over the patenting of its best-selling leukaemia drug Glivec, resulting in a defeat for the Swiss company last April.
Reduce investment
The South African drug industry document – prepared by US consultancy Public Affairs Engagement for the lobby group the Innovative Pharmaceutical Association South Africa (IPASA) – outlines a plan to delay the reform at least until after South Africa's elections in early May by suggesting the new law would be politically damaging.
"The world cares that South Africa is proposing to take a wrong turn in economic policy by weakening IP protections. And by cares, we mean both expresses compassionate concern and will take action by reducing investment," the document reads.
IPASA members include drug makers such as Sanofi, Baxter International, Pfizer and Novartis.
IPASA spokeswoman Val Beaumont confirmed the authenticity of the document but said the proposals were still under consideration.
"No part of those proposals have been accepted. No part of that document has been implemented," she told Reuters.
The industry could now ditch the campaign – which it dubbed "Almost Political" – because the leaked document has probably weakened its negotiating position.
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