[Ip-health] Financial Times: Brazil spurns patent on HIV drug

[Thiru Balasubramaniam]

Brazil spurns patent on HIV drug

By Andrew Jack in London and Richard Lapper in S=E3o Paulo

Published: May 5 2007 03:00 | Last updated: May 5 2007 03:00

Brazil yesterday overrode the patent on a pivotal HIV medicine,
becoming the second emerging economy aggressively to challenge the
pharmaceutical industry in seeking a sharp reduction in drug costs.

President Luiz In=E1cio Lula da Silva yesterday signed a "compulsory
licence" for Efavirenz, Merck's HIV drug, allowing the government to
purchase from rival generic suppliers under provisions permitted by
World Trade Organisation rules.

The move marks a sharp escalation in clashes over drug pricing between
developing countries and industry, following a recent decision by
Thailand to issue compulsory licences for several patented medicines
including Efavirenz.

Health activists welcomed Brazil's action in boosting affordable
medicines for patients with a life-threatening disease, but the
pharmaceutical industry warned it could severely harm supplies of cheap
drugs to the world's poorest countries.

Michael Weinstein, president of AIDS Healthcare Foundation, which
operates clinics in Latin America, said: "Today is a victory for Aids
activists and patients everywhere, and proof that drug companies will
go down in defeat every time they place themselves in the way of
justice for Aids patients."

However, Jeffrey Sturchio, a vice-president at Merck, said: "If Brazil
expropriates our intellectual property, it will have a chilling effect
on whether companies research diseases of the developing world and in
the long term will have an impact on the poorest countries."

The decision leaves a few days for discussion in Brazil, while Thailand
meets drug companies this month to avert the cheaper purchases from
rivals. Brazil has negotiated by brinkmanship over HIV drug pricing,
threatening in recent years to issue compulsory licences but stopping
short after winning deeper discounts from companies. Talks broke down
earlier in the week between the authorities and Merck, which resisted
Brazil's calls to reduce its price from $1.57 a patient a day to the 65
cents at which it is sold to Thailand.

Merck said the difference was that Thailand had a much higher
prevalence of HIV, which put it into its category of sales for
Efavirenz at cost price.

Mr Sturchio argued Merck continued to lower the price of the medicine,
but emerging economies such as Brazil had a role to play alongside the
developed world in helping not only cover production costs but also
funding future drug innovation.


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