International Business: JAPAN
AIDS: ANATOMY OF A TRAGEDY
An AIDS scandal shakes Japan Inc.
For someone whose life has been shattered, Hiroshi Shimizu is remarkably calm. In a cramped Tokyo law office, the subdued, bitter man in his 30s--using an assumed name for the interview--relates how he became infected with the HIV virus from tainted blood products sold by Japanese hospitals to hemophiliacs during the mid-1980s. "I was raped," says Shimizu. "I never thought doctors would give me bad medicine."
Last year, Shimizu was shocked when a doctor newly transferred to his hospital broke the news. Four years earlier, he had asked his previous doctor if he could safely marry. "He told me: `There's absolutely no problem,' even though he knew [I was infected]," Shimizu says. "I could have passed it to my wife." Luckily, he hasn't.
Shimizu is one of more than 2,000 hemophiliacs and their loved ones infected with the deadly virus before heat-treated blood products became available in Japan. It's a tragedy--and now it's a national scandal. In recent weeks, the country has been rocked by charges that Japanese drug and hospital companies kept selling tainted blood even after the AIDS threat was proved beyond a shadow of a doubt. Even worse is the charge that the Japanese government knowingly allowed this dangerous practice as part of a policy to protect domestic companies from foreign competition. Japan's bureaucrats are already under attack for their role in the banking fiasco. As the AIDS scandal unfolds, Japanese confidence in government could erode even further. Big settlements in a related lawsuit may also set a precedent in other AIDS liability cases around the world.
The origins of the tragedy go back to 1983. By then, scientists were closing in on the virus that causes AIDS, and U.S. health authorities mandated that all blood products be heat-treated to protect hemophiliacs and patients from infection. Japanese authorities were concerned as well: the Health & Welfare Ministry formed an AIDS study group headed by the country's foremost hemophilia expert, Dr. Takeshi Abe.
RAIN AND SLEET. What happened next has only just been revealed, thanks to an investigation by new Health Minister Naoto Kan. According to investigators, the ministry group on July 4, 1983, recommended banning untreated blood imports. Since no heat-treated products were then available from Japanese companies, the group also advised allowing emergency imports of heat-treated blood from companies such as U.S. drug giant Baxter International Inc.
But a week later, the recommendation was reversed. According to memos recovered from the records of Atsuaki Gunji, then head of the ministry's Biological & Antibiotics Div., the recommendation was overturned because it would "deal a blow" to domestic companies. Japan's marketers of blood products bought imports of untreated blood--and they did not have their heat-treatment processes yet. The ministry insisted that Baxter conduct two years of clinical testing in Japan before it used its new heat treatment there. Domestic drug companies, led by Osaka-based Green Cross Ltd. rushed to develop their own treatment processes. Meanwhile, Baxter and other foreign companies that already sold untreated blood products in Japan had to continue the practice if they wanted to stay in the market.
The recent revelations have sparked some startling events in a country where discussion of AIDS is still largely taboo. In February, Health Minister Kan made front-page news when he officially apologized to HIV-infected hemophiliacs and families who had staged a 72-hour vigil in rain and sleet outside the ministry. Dr. Abe abruptly resigned as vice-president of Teikyo University on Feb. 26. The mother of one AIDS victim is pressing for murder charges against Abe. He hasn't responded publicly, but university officials quoted him saying his conscience was clear. Atsuaki Gunji may also face criminal charges.
Meanwhile, lawsuits filed by hemophiliacs and their families in 1989 are approaching resolution. Three Japanese drug companies as well as U.S.-based Baxter are hashing out a settlement with the families. Germany's Bayer Group, which sold blood products in Japan, is also seeking "a constructive solution."
Although the total liabilities for the companies could approach $2 billion, victims call the court-recommended payments of $450,000 for each plaintiff "pretty cheap for a human life." They want at least $600,000 each in lump-sum damages as well as other compensation.
If similar settlements become the norm for AIDS liability cases around the world, industry sources worry the costs could be staggering for health-care companies involved in the blood business. Baxter officials say the company is taking a $131 million charge related to the case, but insurance is covering a chunk of that. Green Cross said on Feb. 22 that its liability from the settlements would be at least $200 million. A surprise Health Ministry inspection of the company on Feb. 23 revealed evidence suggesting that Green Cross falsified documents to indicate that it had stopped selling tainted products before it actually had. The company denies any intentional alteration of documents.
The scandal partly reflects Japan's long-standing aversion to any frank discussion of AIDS in public. More than a decade into the epidemic, some Japanese physicians still don't inform infected patients of their condition. Some hospitals still turn HIV patients away. Already, 400 Japanese infected by blood products have died of full-blown AIDS.
The scandal also sheds light on deeply rooted problems with the Japanese medical system and the government's oversight of it. Blood-products companies are eager to employ the Health Ministry bureaucrats who once regulated them. At least nine ministry bureaucrats have retired to executive positions in the blood industry since 1980. This practice is part of the Japanese tradition of amakudari, or "descent from heaven." Ryuhei Kawada, the 20-year-old hemophiliac who put a human face on the blood issue when he went public with his identity last year, says: "Amakudari is a structural problem, and the general public just allows it to exist."
"VERY SPECIAL.." Kawada and his mother helped arouse favorable opinion for their cause by courting the press. Public outrage, as well as some rulings for the plaintiffs last October, may have helped cause the appointment of reformer Kan to the Health Ministry. Kan, a patent attorney with a long history of civic activism, ignored objections that key documents had been "lost" and launched his investigation. Says Toshihiro Suzuki, one of the plaintiffs' leading lawyers: "This case is very special because we rarely have proof that the influence of drug companies on public policy had a negative effect on patients."
Yet the plaintiffs still feel that some stonewalling is taking place. In testimony before the Diet, former ministry officials have been vague about the events of a decade ago, often claiming memory loss. "I trust Kan personally, but I cannot trust the ministry," Kawada says. "The whole system should be overhauled, and every member of the ministry must change." That's a tall order. But Kawada and his fellow plaintiffs have already dealt a blow to the image of the Japanese Establishment.By Edith Hill Updike in Tokyo, with bureau reportsReturn to top