Brazil to break drug patent


Summary

Brazil has decided to ignore US pharmaceutical giant Merck's patent on a key AIDS drug and will instead buy a cheaper generic alternative from India.

The Brazilian government and Merck have been negotiating for three years to bring down the price of Efavirenz, but Brasilia rejected the company's latest offer to cut the price by 30 per cent.

It is the first time Brazil decides to disregard a medication's patent.

Brazilian President Luiz Inacio Lula da Silva complained his country was paying more than double the price Thailand was being charged for Efavirenz.

"It is not possible for someone to get rich out of others' misery," Mr Lula said. "It is disrespectful, as if a sick Brazilian was inferior."

"Between commerce and health, we will take care of our health," he said, warning that this policy could apply to "other drugs if necessary".

Brazil to import the drug from India

Brazil, which has programs to distribute free AIDS medicine to patients, will import the generic medicine from three laboratories in India approved by the World Health Organisation, Health Minister Jose Gomes Temporao told newswire agency AFP.

The move will allow Brazil to buy the drug at US45 cents (A55 cents) per pill, saving $US15 million ($A18.2 million) per year.

Brazil had been paying Merck $US1.59 ($A1.93) per pill, whereas a country such as Thailand paid US65 cents (A79 cents) each.

Brasilia said the move is allowed under the World Trade Organisation's Trips agreement signed in 2001, which allows developing countries to put public health concerns above intellectual property rights.

Merck asks Brazil to reconsider its decision

Merck urged the government to reconsider its decision and said it remained "flexible and committed to exploring a mutually acceptable agreement with the Brazilian government".

The company defended its policy of pricing its drugs depending on a country's level of development and HIV burden, saying it ensures "equitable access as well as our ability to invest in future innovative medicines".

"Research and development-based pharmaceutical companies like Merck simply cannot sustain a situation in which the developed countries alone are expected to bear the cost for essential drugs in both least-developed countries and emerging markets," the New Jersey-based company said in a statement.

"As the world's 12th largest economy, Brazil has a greater capacity to pay for HIV medicines than countries that are poorer or harder hit by the disease."

But Temporao said Merck had "not taken into account that Brazil is the only country in the southern hemisphere that gives drugs to all Brazilians (with AIDS) in a universal, free and widespread manner."

The government said it would pay Merck a 1.5 per cent royalty over the price for the generic drug it imports from India.

Brazil's government had threatened to break the patent in the past but was holding out for the possibility of a last-minute agreement with the drug company.

Negotiations with Merck have been going on for three years, the health minister said.

Ten days ago, Temparao declared the medicine Efavirenz a public interest, the first step toward ending a patent, and gave Merck seven days to lower the price.

The company's lab in Brazil confirmed to AFP that it had offered a 30 per cent cut, which the government deemed insufficient.

The need for HIV drugs in Brazil

Brazil anti-retroviral programs supply a cocktail of 15 drugs free to 200,000 people who have tested positive for HIV in the country. Efavirenz is used by 75,000 of those people.

Seven of the 15 drugs are produced by state or privately owned labs in Brazil and are not protected by patents, the health minister said.


Brazil has decided to ignore US pharmaceutical giant Merck's patent on a key AIDS drug and will instead buy a cheaper generic alternative from India.

The Brazilian government and Merck have been negotiating for three years to bring down the price of Efavirenz, but Brasilia rejected the company's latest offer to cut the price by 30 per cent.

It is the first time Brazil decides to disregard a medication's patent.

Brazilian President Luiz Inacio Lula da Silva complained his country was paying more than double the price Thailand was being charged for Efavirenz.

"It is not possible for someone to get rich out of others' misery," Mr Lula said. "It is disrespectful, as if a sick Brazilian was inferior."

"Between commerce and health, we will take care of our health," he said, warning that this policy could apply to "other drugs if necessary".

Brazil to import the drug from India

Brazil, which has programs to distribute free AIDS medicine to patients, will import the generic medicine from three laboratories in India approved by the World Health Organisation, Health Minister Jose Gomes Temporao told newswire agency AFP.

The move will allow Brazil to buy the drug at US45 cents (A55 cents) per pill, saving $US15 million ($A18.2 million) per year.

Brazil had been paying Merck $US1.59 ($A1.93) per pill, whereas a country such as Thailand paid US65 cents (A79 cents) each.

Brasilia said the move is allowed under the World Trade Organisation's Trips agreement signed in 2001, which allows developing countries to put public health concerns above intellectual property rights.

Merck asks Brazil to reconsider its decision

Merck urged the government to reconsider its decision and said it remained "flexible and committed to exploring a mutually acceptable agreement with the Brazilian government".

The company defended its policy of pricing its drugs depending on a country's level of development and HIV burden, saying it ensures "equitable access as well as our ability to invest in future innovative medicines".

"Research and development-based pharmaceutical companies like Merck simply cannot sustain a situation in which the developed countries alone are expected to bear the cost for essential drugs in both least-developed countries and emerging markets," the New Jersey-based company said in a statement.

"As the world's 12th largest economy, Brazil has a greater capacity to pay for HIV medicines than countries that are poorer or harder hit by the disease."

But Temporao said Merck had "not taken into account that Brazil is the only country in the southern hemisphere that gives drugs to all Brazilians (with AIDS) in a universal, free and widespread manner."

The government said it would pay Merck a 1.5 per cent royalty over the price for the generic drug it imports from India.

Brazil's government had threatened to break the patent in the past but was holding out for the possibility of a last-minute agreement with the drug company.

Negotiations with Merck have been going on for three years, the health minister said.

Ten days ago, Temparao declared the medicine Efavirenz a public interest, the first step toward ending a patent, and gave Merck seven days to lower the price.

The company's lab in Brazil confirmed to AFP that it had offered a 30 per cent cut, which the government deemed insufficient.

The need for HIV drugs in Brazil

Brazil anti-retroviral programs supply a cocktail of 15 drugs free to 200,000 people who have tested positive for HIV in the country. Efavirenz is used by 75,000 of those people.

Seven of the 15 drugs are produced by state or privately owned labs in Brazil and are not protected by patents, the health minister said.