[Ip-health] Boston Globe: Drug costs imperil Brazil AIDS fight

[Mike Palmedo]

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[ Picked text/plain from multipart/alternative ]
http://www.boston.com/news/world/latinamerica/articles/2007/01/03/drug_cost=
s_imperil_brazil_aids_fight/

Drug costs imperil Brazil AIDS fight

By Indira A.R. Lakshmanan
Boston Globe
January 3, 2007

RIO DE JANEIRO -- A decade after Brazil became the first developing country=
 to guarantee free AIDS treatment to every citizen, the spiraling cost of n=
ew drugs is threatening to bankrupt the highly effective program.

Tens of thousands of patients who have survived for years have become resis=
tant to old antiretroviral drugs that are widely available in cheap generic=
 form. High prices for the new medicines have driven the country's spending=
 on AIDS drugs up 75 percent over the past two years.

The government has negotiated hard with pharmaceutical companies, receiving=
 the lowest prices outside of Africa for many brand-name antiretrovirals. B=
ut even with discounts, new antiretrovirals cost as much as $17,000 per pat=
ient per year in Brazil. Old generic drugs cost hundreds of dollars per pat=
ient annually.

The soaring prices have sparked a national debate over the sustainability o=
f the taxpayer-funded program and over Brazil's right to begin making gener=
ic copies of critically needed medicines. A battle is brewing among activis=
ts, health officials, and pharmaceutical companies that will have global im=
plications for intellectual property rights and the future of AIDS treatmen=
t in rich and poor nations alike.

AIDS activists say that ballooning drug prices must not be allowed to under=
mine a free, universal drug program that inspired Thailand, Uganda, and oth=
er nations to provide free antiretrovirals. Coupled with aggressive prevent=
ion efforts, including condom distribution to prostitutes and needle hand o=
uts to drug addicts, Brazil's program slashed annual AIDS deaths in half to=
 11,000 in 2005, the latest year for which government figures were availabl=
e.

It was a dramatic turnaround from the early 1990s, when Brazil's epidemic r=
ivaled South Africa's, where 20 percent of adults now have the disease. Tod=
ay, only 0.6 percent of the adult population is infected in Brazil -- a pre=
valence rate lower than in the United States. Through universal drug treatm=
ent, Brazil cut HIV-related hospitalizations by 80 percent in 2006, when co=
mpared with 1996, and saved a cumulative $1.7 billion in hospital costs ove=
r the past decade, officials say.

Activists and leaders of Brazil's pharmaceutical industry are pushing the g=
overnment to cut burgeoning drug costs by making generics of drugs that are=
 still under patent. Under a 2001 World Trade Organization declaration, any=
 country may copy patented drugs if its government deems it necessary to pr=
otect public health.

Big multinational drug makers have fought to avoid "licensing," under which=
 a government pays royalties to the makers to copy a drug. African nations =
have issued licenses, but pharmaceutical giants argue that Brazil is a midd=
le-income country and should pay its fair share.

As the most populous nation in Latin America, "Brazil is so big that if the=
y take a stand . . . others like Venezuela, Argentina, and Bolivia might fo=
llow," said Guillaume Corpart-Muller, an analyst for InfoAmericas, a busine=
ss intelligence firm with headquarters in Miami.

"They could lead a movement," he added. "And that's pretty scary for manufa=
cturers of branded drugs."

The Brazilian government has resisted licensing, fearing reprisals not only=
 from pharmaceutical companies whose drugs they may not have the know-how t=
o replicate but also from the countries in which the companies are based. T=
he United States has trade regulations allowing it to retaliate against any=
 country imperiling the business of a US company. If Brazil produced generi=
cs of patented US drugs, Washington could conceivably block Brazilian impor=
ts or suspend tariff waivers to the tune of billions of dollars.

The result has been an uneasy truce between Brazil and the pharmaceutical i=
ndustry. Companies say they have given Brazil the best prices they can whil=
e making a return for investors. But advocacy groups are pressuring the gov=
ernment to skip the bargaining and follow India, China, and South Africa in=
 making generics before treatment becomes unaffordable.

For most patients here, the government program is a critical lifeline.

Lucas Castro Santana contracted HIV when he was 13, he believes, from a dir=
ty needle used to etch his initials onto his arm in a cheap tattoo. Now 18,=
 Santana depends on four daily medicines for survival, including a patented=
 drug. With a monthly income of $118 for six people, his family could never=
 afford the $455 monthly cost of his pills.

"If I had to pay for it, I'd be dead already," the bone-thin youth said rec=
ently while waiting for prescriptions at a north Rio hospital.

Veriano Terto Jr., executive director of the Brazilian Interdisciplinary AI=
DS Association, said he worries that unless Brazil starts making its own dr=
ugs, rising prices could put the government program out of business and sen=
d patients like Santana back into hospitals.

Activists are fighting to block new patents for minor changes to formulas -=
- a process known as "evergreening" that allows drugmakers to renew expirin=
g patents -- and are calling for parallel imports from countries that pay l=
ess for AIDS drugs or make generics. They have filed a lawsuit against Braz=
il's government and US pharmaceutical giant Abbott Laboratories, which slas=
hed prices of its antiretroviral Kaletra in 2005 -- just as Brazil was on t=
he verge of issuing a license to copy it.

Abbott intends to increase Kaletra's price in Brazil by 10 percent in 2007,=
 because the drug will be offered in two daily tablets rather than three ca=
psules -- and thus is considered a new product. The government complains th=
at Kaletra already costs Brazil $16.3 million annually; Abbott counters tha=
t Kaletra is the cheapest effective drug of its class sold in Brazil.

Company spokeswoman Jennifer Smoter said Abbott fought Brazil's plans to li=
cense a generic copy because "we rely on what we get from the sale of our m=
edicines to help foster the inventions of the future." In order to give Afr=
ica the drug at the cost price of $500 a year, she explained, the company n=
eeds to charge a higher price elsewhere.

Just one new drug -- Enfurvitide, manufactured by Swiss pharmaceutical Roch=
e -- cost Brazil $17 million last year for just 1,000 of 175,000 patients i=
n the program, health officials say. With 15,000 more people beginning gene=
ral treatment every year, drug costs will only rise.

An hour's drive from downtown Rio, state-owned drugmaker Farmaguinhos has a=
 new factory. Director Eduardo de Azeredo Costa says the government has a d=
uty to taxpayers and patients to issue licenses to national laboratories to=
 produce generics and research new drugs that could save tens of millions o=
f dollars.

"People are fighting for their lives and are entitled to the best possible =
treatment," said Mari=E2ngela Sim=E3o, director of the National AIDS progra=
m. But she acknowledged the state "can be more selective in the future abou=
t new drugs, once there's evidence that they're better than other, older on=
es."

Lakshmanan can be reached at lakshmanan@globe.com