Nearly 200 babies are born in South Africa with HIV every day, and studies indicate that the drug nevirapine could reduce that number by nearly half.
AIDS activists and hundreds of South Africa's pediatricians have sued to force the state to make nevirapine available through the public health system.
The German-based pharmaceutical company Boehringer Ingelheim has offered to distribute the drug for free, but the government says its safety has yet to be proven and has restricted its distribution to a handful of pilot sites.
Gilbert Marcus, the AIDS activists' advocate, called the state's position arbitrary, unreasonable and irrational, and said it amounted to a decision that could cause "potentially thousands of predicable but avoidable deaths of children."
Quoting government figures, Marcus said nearly 23 percent of pregnant women were HIV positive, yet only 10 percent had access to nevirapine.
"The impact of the policy is nothing short of tragic," he said in opening arguments at Pretoria High Court on Monday.
Nevirapine, which has the backing of the World Health Organization, has been used effectively to stop mother-to-child transmission of HIV in a number of countries.
But Marumo Moerane, a lawyer for the state, argued that the government must adopt a cautious approach in issuing the drug and ensure recipients that are adequately educated.
Despite being administered nevirapine, women were still transmitting HIV to their children through their breast milk, Moerane said.
"In order to give maximum benefits to pregnant women and children, you have to have phased implementation," he said. "We are trying to be responsible."
Judge Chris Botha asked why the state had not set targets and timelines for distributing the drug nationwide.
"It seems to me it (nevirapine distribution) has to be extended across the country as soon as is practically possible," Botha said, calling AIDS a national tragedy.
Earlier Monday about 300 activists marched to the Ministry of Health, where they presented a memorandum demanding the government drop its objections to the antiretroviral drugs.
They then marched to the High Court in Pretoria. The case has been launched by the Treatment Action Campaign (TAC).
The marchers waved placards which read "Give Women a Choice Give Women a Chance" and "Let's Make Life Worth Living."
South Africa has balked at the use of nevirapine and other antiretroviral drugs such as AZT at public hospitals, saying the drugs are too expensive and toxic.
But the activists say President Thabo Mbeki's government should stop spending billions of dollars on a new arms package and divert some of the money to AIDS drugs.
"Mbeki must stop giving money for weapons. We want the drugs for our kids," said Clarina Segolodi, a 33-year-old activis who has lost a brother and sister to AIDS.
Mbeki, who has yet to acknowledge a causal link between HIV and AIDS, has branded antiretrovirals as dangerous as the disease they treat.
Protesters laid white crosses etched with names of children who died of AIDS on the steps of the building before marching to the courthouse.
"People have lost their children because they didn't have the medicine," said Julia Matimulale, a 27-year-old AIDS activist from Soweto, a township near Johannesburg. "I don't want there to be any more children lost."
South Africa has more people living with HIV and AIDS than any other country. Official statistics indicate that one in nine South Africans -- more than four million people -- already live with HIV-AIDS.
The TAC and other groups lobbying on behalf of people living with HIV-AIDS are taking the National Department of Health and health ministers from eight of the country's nine provinces to court on grounds they are violating the sufferers' constitutional right to life and to health care.
The groups have settled with the government of the Western Cape Province, which includes Cape Town, where all pregnant women are offered nevirapine during childbirth.
The South African Health Department has set up pilot projects in 200 hospitals and clinics to assess the value of nevirapine in reducing risks of mothers passing the virus on to their unborn children.
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