[Ip-health] AP: Brazil AIDS Drug Negotiations Break Down

Fri May 4 06:52:17 2007

http://www.guardian.co.uk/worldlatest/story/0,,-6606687,00.html

Brazil AIDS Drug Negotiations Break Down

Friday May 4, 2007 4:16 AM

By MICHAEL ASTOR

Associated Press Writer

RIO DE JANEIRO, Brazil (AP) - Brazil moved closer to breaking a patent
on a U.S.-manufactured anti-AIDS drug after negotiations with Merck &
Co. broke down Thursday.

The government last week declared Merck's efavirenz anti-retroviral
drug a ``public interest'' medicine - a move that effectively gave
Merck, based in Whitehouse Station, New Jersey, seven days to negotiate
lower prices with the government or have Brazil strip the patent by
issuing a compulsory license.

Negotiations began in November with Brazil demanding the same price for
efavirenz paid by the Thai government - 65 cents per 600 milligram
pill. Brazil at the time said it was paying US$1.59 per pill.

The United States has since placed Thailand on a list of copyright
violators after the Asian country moved to break patents on three
anti-AIDS drugs, including those made by Abbott Laboratories and Merck.

In Thailand's capital of Bangkok, AIDS activists rallied outside the
U.S. Embassy on Thursday to protest the decision, calling the Thai
government's move to break patents on pricey U.S.-made AIDS drugs a
``lifesaver.''

Brazilian officials turned down Merck's offer of a 30 percent discount
on the drug.

``We at Merck were disappointed to have had what we consider to be a
fair offer rejected by the government of Brazil,'' Merck spokeswoman
Amy Rose said by phone from New Jersey. ``We remain flexible, open and
committed to the negotiations.''

The matter now will be referred to President Luiz Inacio Lula da
Silva's chief of staff who will decide whether to issue the compulsory
license and allow Brazil to manufacture the drug or to buy generic
versions while paying Merck a small royalty.

Brazilian law and rules established under the World Trade Organization
allow for compulsory licenses in a health emergency or if the
pharmaceutical industry uses abusive pricing.

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

Currently 75,000 of the 180,000 Brazilians who receive the free
cocktail of anti-AIDS drug use efavirenz.

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.

In 2005, Brazil threatened to break the patent on Kaletra, an anti-AIDS
drug produced by Abbott Laboratories, but later reached an agreement.

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