[Ip-health] Reuters: Brazil says close to deal with Abbott on AIDS drug

[Mike Palmedo]

http://www.alertnet.org/thenews/newsdesk/N03583132.htm

Brazil says close to deal with Abbott on AIDS drug
03 Oct 2005 19:33:46 GMT

By Todd Benson
Reuters

SAO PAULO, Brazil  - Brazil is close to reaching a deal with the U.S.
pharmaceutical company Abbott Laboratories that would nearly halve the
price it pays for an important AIDS drug, the health minister said on
Monday.

"We've reached an agreement on price," Jose Saraiva Felipe, who took
over as health minister in July, told reporters at an AIDS seminar in
Sao Paulo.

"There are just a few differences in the text of the accord that still
need to be ironed out," he said, adding that he expected the deal 1to be
signed within "48 hours."

Brazil, which provides free AIDS treatment to all who need it, currently
pays $1.17 a pill for the drug, called Kaletra. That works out to about
$107 million a year, or nearly a third of Brazil's annual budget for
antiretroviral medicines.

After months of negotiations, Saraiva Felipe said, Abbott <ABT.N> agreed
to sell the drug for just 63 cents a pill. The deal, which would take
effect in February, also includes other benefits for Brazil that would
ultimately lower the price to 59 cents, he added.

Brian Kyhos, a spokesman for Abbott, declined to confirm the price
reduction, saying "There is nothing signed yet, so there isn't anything
to provide details on."

Brazil had threatened to break Abbott's patent if it did not lower its
price, insisting that a discount was necessary to ensure the
sustainability of an AIDS treatment program that has been praised by the
United Nations as a model for other developing nations.

The government claimed it could produce a generic version of Kaletra for
just 68 cents a pill, saving about $55 million a year. Abbott countered
by arguing that Brazil already received the drug at the lowest price in
the world outside of humanitarian programs in Africa.

It appeared that the standoff would end in early July when Saraiva
Felipe's predecessor, Humberto Costa, announced on his last day on the
job that he had reached a deal with Abbott, which is based in Abbott
Park, Illinois.

But shortly after being sworn in, Saraiva Felipe said he would not
endorse the deal, calling Abbott's offer inadequate.

The showdown is not the first time Brazil has clashed with large
pharmaceutical companies. It has successfully forced drug companies to
lower prices on AIDS medicines several times in recent years by
threatening to break their patents and produce copycat versions locally.

Brazil is also in talks with Merck & Co. <MRK.N> and Gilead Sciences
Inc. <GILD.O> aimed at reducing prices on two other widely used
antiretroviral drugs that they produce.

Saraiva Felipe said the government is trying to persuade Merck to allow
it to produce a generic version of the drug Tenofovir. It is seeking a
discount from Gilead on a medicine called Efavirenz, which costs about
$7 a pill -- a far cry from the less than $1 a pill it would pay for a
knockoff version made in India.

"That price is absolutely abusive," said Pedro Chequer, the head of the
government's AIDS treatment program, referring to Gilead's charges for
Efavirenz.