[Ip-health] Bloomberg: Brazil to Break Patent on Merck's Efavirenz AIDS Drug

[Thiru Balasubramaniam]

Brazil to Break Patent on Merck's Efavirenz AIDS Drug

By Katia Cortes

May 3 (Bloomberg) -- Brazilian President Luiz Inacio Lula da Silva is
set to break the patent on Merck & Co's AIDS drug Efavirenz after the
company's offer to cut prices failed to satisfy demands from the
country's health ministry.

Lula is scheduled to sign an act tomorrow at 11 a.m. New York time that
will allow the government to purchase the generic version of the drug
from laboratories certified by the World Health Organization, the
president's office said.

The decree would mark the first time Brazil by-passed a patent since
the country began recognizing patented drugs in 1996, said Michel
Lotrowska, Brazil representative of the access campaign for essential
medicines at Doctors Without Borders. The government is pushing for
lower drug prices to cut costs for the free treatment offered all
200,000 people in the country infected with AIDS and the HIV virus that
causes the disease, he said.

Merck, the third-largest U.S. drugmaker, offered to cut the price of
the drug to the government by 30 percent to $1.10 a pill from $1.59.
The government said the company must cut the price to 65 U.S. cents a
pill, the same price paid by Thailand.

Merck is ``disappointed'' by the decision and believes the offer of a
30 percent cut was ``fair,'' spokeswoman Amy Rose said in an e-mailed
statement. The company remains open to further negotiations, she added.

Last week, Lula declared the medication ``of public interest.'' The
declaration gives the president power to issue a compulsory license for
three years and allows the government to purchase the generic version
of Efavirenz from laboratories certified by the World Health
Organization. All three of the labs are in India.

Brazil will save $30 million this year from $42.9 million it would pay
to Merck and will save $237 million until 2012, when the patent right
would expire, the health ministry said.

To contact the reporter on this story: Katia Cortes in Brasilia at at
kcortes@bloomberg.net
Last Updated: May 3, 2007 20:32 EDT

---------------------------------
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