Brazil breaks patent on HIV drug
Posted by pozlife on May 4, 2007
published Friday, May 4, 2007
President Luiz Inacio Lula da Silva took steps Friday to let Brazil buy an inexpensive generic version of an AIDS drug made by Merck & Co. despite the U.S. drug company’s patent.
Silva issued a “compulsory license” that would bypass Merck’s patent on the AIDS drug efavirenz, a day after the Brazilian government rejected Merck’s offer to sell the drug at a 30 percent discount, or $1.10 per pill, down from $1.57.
The country was seeking to purchase the drug at 65 cents a pill, the same price Thailand pays.
It was the first time Brazil has bypassed a patent, but Silva said Brazil would consider doing so again on any drug sold at unfair prices. “Between our business and our health, we are going to take care of our health,” he said after signing the decree.
Amy Rose, a spokeswoman for Whitehouse Station, N.J.-based Merck, said earlier that the company would be “profoundly disappointed if Brazil goes ahead with a compulsory license.”
“As the world’s 12th largest economy, Brazil has a greater capacity to pay for HIV medicines than countries that are poorer or harder hit by the disease,” Merck said in a statement after Silva’s announcement.
A compulsory license is a legal mechanism that allows a country to manufacture or buy generic versions of patented drugs while paying the patent holder only a small royalty.
Brazilian law and rules established under the World Trade Organization allow compulsory licenses in a health emergency or if the pharmaceutical industry uses abusive pricing.
After Thailand moved to override patents on three anti-AIDS drugs, including those made by Abbott Laboratories and Merck, the United States placed Thailand on a list of copyright violators.
In Thailand’s capital of Bangkok, AIDS activists rallied outside the U.S. Embassy on Thursday to protest that decision, calling the Thai government’s move to slash the cost of pricey U.S.-made AIDS drugs a “lifesaver.”
The president of the U.S.-based AIDS Healthcare Foundation, Michael Weinstein, called Brazil’s action a “victory,” saying in a statement, “We salute the courage of countries such as Brazil, Thailand and Mexico who are fighting to ensure drug access for AIDS patients the world over.
“Drug companies will go down in defeat every time they place themselves in the way of justice for AIDS patients,” he said.
But the U.S.-Brazil Business Council said the decision was a “major step backward” in intellectual property law and warned it could harm development.
“Brazil is working to attract investment in innovative industries … and this move will likely cause investments to go elsewhere,” the council said in a statement.
Although Brazil had threatened to bypass drug patents in the past, the country had always reached a last-minute agreement with drug manufacturers.
Brazil provides free AIDS drugs to anyone who needs them and manufactures generic versions of several drugs that were in production before Brazil enacted an intellectual property law in 1997 to join the WTO.
But as newer drugs have emerged, costs ballooned and health officials warned that without deep discounts, they would be forced to issue compulsory licenses.
Efavirenz is used by 75,000 of the 180,000 Brazilians who receive free AIDS drugs from the government. The drug currently costs about the government about $580 per patient per year.
“The price is 136 percent higher than this lab (Merck) offers to Thailand,” Health Minister Jose Gomes Temporao said, and the price “threatened the viability of the anti-AIDS program.”
Brazil’s Health Ministry says a generic version of efavirenz would save the government some $240 million between now and 2012, when Merck’s patent expires. (Vivian Sequera, Michael Astor and Wallace Witkowski, AP)