[A2k] Brazil Bypasses Patent on U.S. AIDS Drug

[Gaëlle Krikorian]

Brazil Bypasses Patent on U.S. AIDS Drug
May 4, 2007 - 12:55pm
By VIVIAN SEQUERA
Associated Press Writer

BRASILIA, Brazil (AP) - 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."

The Health Ministry says a generic version of efavirenz would save
the government some $240 million between now and 2012, when Merck's
patent expires.

___

Associated Press Writer Michael Astor in Rio de Janeiro and AP
Business Writer Wallace Witkowski in New York contributed to this
report.

(Copyright 2007 The Associated Press. All rights reserved. This
material may not be published, broadcast, rewritten or redistributed.)

By VIVIAN SEQUERA
Associated Press Writer

BRASILIA, Brazil (AP) - 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.