[Ip-health] Financial Times: Cut-price HIV drugs drive may spur patents clash

[Thiru Balasubramaniam]

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Cut-price HIV drugs drive may spur patents clash

By Andrew Jack in London

Published: August 10 2006 23:14 | Last updated: August 10 2006 23:14

A French-led international medicines programme will soon begin buying
recently developed Aids drugs from low-cost generic manufacturers in a
move that may trigger clashes with western pharmaceutical companies
holding the patents.

Countries supporting Unit-aid, the drugs purchasing facility for the
developing world proposed by President Jacques Chirac, have agreed to
give top priority to purchasing paediatric and second-line
anti-retroviral medicines for HIV patients.

That will include cut-price deals to be finalised later this year with
Indian generic drugmakers, which could sharply cut prices on
=93second-line=94 therapies for patients who have developed resistance to
older HIV drugs.

Unitaid, which plans to raise more than $400m (=80312m, =A3210m) from donor=
s
during 2007, will also fund the pre-qualification work of the World
Health Organisation, designed to verify the quality of generic
manufacturers in the developing world, as well as buy modern drugs for
malaria and tuberculosis.

Details of Unitaid, which will operate under the auspices of the WHO
with a small secretariat and governing board, are due to be unveiled at
the United Nations general assembly in New York in September.

The purchasing moves may spark fresh clashes with manufacturers, because
the effort will benefit not only low-income countries but also
middle-income ones with a high incidence of HIV such as Brazil.

Under current world trade rules, countries have the legal right to
override normal patent protection in the event of health emergencies and
issue compulsory licences to alternative low-cost producers, although
the US government and pharmaceutical companies have lobbied to
discourage them from doing so.

Brazil threatened to issue a compulsory licence last year against Abbott
of the US, which produces the second-line therapy Kaletra, but agreed to
a negotiated settlement that provided the drugs at a lower price in
exchange for bulk purchases over six years.

One official advising Unit-aid said he believed generic deals would more
than halve the price of Kaletra, and would go a long way towards
providing second-line drugs to those who needed them in the developing
world.

Unitaid representatives from Brazil, France, Chile, Norway and the UK
met in London last month to finalise spending priorities and will gather
again in Toronto next Monday.

The French are expected to raise $250m a year from an airline levy
ranging between =801 per economy ticket within Europe and =8040 ($51, =A327=
)
for a long-distance business ticket. Brazil, Chile and Norway have
pledged a further $100m, while the size of UK funding is still under
discussion.

Eighteen countries have expressed support in principle.