[Ip-health] Associated Press: Brazil Says May Break AIDS Drug Patent

[Thiru Balasubramaniam]

http://www.forbes.com/feeds/ap/2007/04/25/ap3653230.html

Associated Press
Brazil Says May Break AIDS Drug Patent
By VIVIAN SEQUERA 04.25.07, 6:42 PM ET

Brazil said Wednesday it would buy an Indian-made generic version of a
Merck and Co. anti-AIDS drug if the U.S. company does not offer Latin
America's largest country a deeper discount on the medicine.

Health Minister Jose Gomes Temporao signed a decree declaring Merck
(nyse: MRK - news - people )'s efavirenz anti-retroviral drug a "public
interest" medicine - the first step in a process that could lead Brazil
to break Merck's patent.

"Brazil is not doing this as a threat, nor to lower the price of other
medicines, but to guarantee its program of attending (AIDS) patients,"
Temporao said at news conference.

Whitehouse Station, New Jersey-based Merck now has seven days to
negotiate lower prices with the government, Temporao said. If the two
sides do not reach a deal, Brazil could issue a compulsory license that
would allow the country to produce or buy a generic version of the
drug, paying Merck only a small royalty.

Merck said it was committed to reaching a negotiated agreement with the
Health Ministry.

"The company does not believe compulsory licensing is in the best
interest of patients," spokeswoman Amy Rose said.

Brazilian law and rules established under the World Trade Organization
allow for the issuance of compulsory licenses in cases of a health
emergency or if the pharmaceutical industry is deemed to be engaged in
abusive pricing.

Efavirenz is the most widely used medication by Brazil's anti-AIDS
program, which provides free medicines for anyone who needs them.

Currently 75,000 of the 180,000 Brazilians with HIV who receive the
free cocktail of anti-AIDS drug, use efavirenz. When Brazil began
buying efavirenz in 1999, only 2,500 patients used the drug.

In 2005, Brazil threatened to break the patent on Kaletra, an anti-AIDS
drug produced by Abbott Laboratories (nyse: ABT - news - people ) Inc.,
but the two sides reached an agreement and the company's patent was not
broken.

In November, Brazil began price-reduction negotiations with Merck,
demanding the same 65 cents per 600 milligram pill of efavirenz the
company charges the Thai government. Brazil at the time was paying
$1.59 per pill, the statement said.

Merck proposed a 2 percent reduction, which the government turned down.

Brazil has repeatedly managed to win price reductions in recent years
from big pharmaceutical companies by threatening to break patents but
has never actually done so.

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Thiru Balasubramaniam
Geneva Representative
Knowledge Ecology International (KEI)
voice +41.22.791.6727
fax +41.22.723.2988
mobile +41 76 508 0997
thiru@keionline.org