[Ip-health] Brazil AIDS Drug Dispute Courtbound

[James Love]

Pretty detailed report on Brazil/Merck dispute, that is directly tied
to the current negotiations in Brazil over compulsory licenses.  Jamie

http://dailynews.yahoo.com/h/po/20010326/co/brazil_aids_drug_dispute_courtbo
und_1.html
Tuesday March 27 02:22 AM EST
Brazil AIDS Drug Dispute Courtbound 
By Shasta Darlington, Reuters 
SUMMARY: The battle over AIDS drug patents has moved to Brazil, where the
government says Merck has threatened legal action over importation of a
knockoff drug. 
U.S. drug maker Merck and Co Inc. has threatened to take Brazil's
state-owned pharmaceutical firm to court for allegedly violating the patent
on an AIDS drug, Brazilian officials said on Monday. 
Merck says Brazil's Far-Manguinhos laboratory violated its patent on Stocrin
by importing a generic form of the drug known as Efavirenz from India. The
company sent an informal letter to Far-Manguinhos requesting the purchase be
stopped. 
Far-Manguinhos, which is part of the government's Oswaldo Cruz research
foundation, said it imported only a small amount of the drug for research
purposes, which is permitted under Brazilian law. It does not use the
imported version of the drug commercially. 
"They are demanding that we cancel the purchase and halt our studies and if
we don't they say they are going to take us to court," said Eloan dos Santos
Pinheiro, director of drug technology at Far-Manguinhos. 
The Brazilian laboratory and research firm said the letter was sent at the
beginning of the month and must be responded to by April 3. 
"We did send a letter ... asking them to reconsider that activity because
from our view it would be a violation of the patent in Brazil," said Merck
spokesman Gregory Reaves. Reaves declined to comment on whether Merck would
take Far-Manguinhos to court if it does not stop purchasing the
Indian-manufactured drug. 
Still, the latest standoff is just part of an ongoing feud between Brazil
and U.S. pharmaceutical companies. 
Brazil openly admits that it is researching the make-up of Efavirenz so that
it can violate Merck's patent starting in June if the company does not agree
to lower its prices. 
"If they negotiate a lower price, we are not going to manufacture it, but if
they don't, we want to be prepared," Pinheiro said. 
Model in AIDS Fight 
Brazil's controversial law allowing it to violate patents under certain
conditions has helped make the country a model in the global AIDS fight. But
it has also sparked criticism from the international pharmaceutical
industry. 
U.S. drugs makers pushed the U.S. government to submit a request to the
World Trade Organization (WTO) to establish a dispute panel to examine
charges that Brazil's patent law discriminates against imports. 
Under Brazilian law, foreign firms are required to start manufacturing drugs
locally within three years of winning a patent concession or they lose
exclusive rights in Brazil. 
Local industry can also violate patents in emergency situations in "the
interest of the public." 
"It would be in the interest of the public to manufacture Efavirenz if
Brazil didn't have the capital to meet the high costs," said Maria Fernanda
Macedo, one of Pinheiro's advisors at Far-Manguinhos. 
Starting in 1996, Brazil's government started making drugs to treat AIDS as
part of its policy of free treatment for all patients. Brazil now legally
makes eight of the 12 drugs used in the so-called AIDS cocktails. 
As a result, AIDS drug prices have plummeted more than 70 percent -- a
typical treatment for an AIDS patient in Brazil costs about $4,400 a year
compared with up to $15,000 in the United States -- but prices on those like
Efavirenz that do not face competition from locally produced versions have
remained high. 
Efavirenz, which is only used in a relatively small number of cases,
consumes more than 10 percent of Brazil's $305 million AIDS drugs budget. 
Still, Merck plans to offer Brazil "an extremely aggressive discount" on the
drug in the very near future, Reaves said. "We believe that patent
protection and affordable prices are compatible." 
At the beginning of the month, Merck said it would offer AIDS drugs at no
profit to the poorest of the world's developing countries and to those where
AIDS is infecting more than 1 percent of the population, although Brazil
does not fall into those categories. 
In absolute numbers, Brazil suffers from a high rate of AIDS infection with
190,000 HIV cases registered, and 500,000 suspected cases. But only 0.6
percent of the adult population is infected compared to 35.8 percent in
Botswana.