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May 11, 2007: To ensure the
affordability of a new generation anti-HIV drug,
Brazilian government has decided to break patents
of Merck’s efavirenz and decided to source the
drug from low-cost destinations like India.
This is the first time Brazil has bypassed a
patent to acquire cheaper drugs for its AIDS
prevention program after becoming a WTO signatory
guaranteeing patent protection 1n1996.
Brazil has decided to issue a compulsory license
for the import or manufacture of generic versions
of efavirenz after talks over the price of the
drug broke down. Under WTO rules, countries can
issue a compulsory license to manufacture or buy
generic versions of patented drugs deemed critical
to public health.
Recently, Thailand has taken a similar decision.
Other countries, including Canada and Italy, have
also used a clause in WTO rules to flout drug
patents in the name of public health.
Brazil's health ministry plans to import a generic
version of efavirenz from India, paying about 45
cents per pill, and may also start making its own
copy of the drug after rejecting the New
Jersey-based Merck& Co.’s offer to cut its $1.59
per pill price by 30 percent. Brazil wanted to pay
what Merck charges Thailand, or $0.65 per pill.
Brazil's government provides free universal access
to AIDS drugs and distributes condoms and syringes
free as part of a prevention program the United
Nations has lauded.
Brazilian President Luiz Inacio Lula da Silva
signed a law allowing the government to buy a
generic version of Efavirenz from laboratories
certified by the World Health Organization..."It
doesn't matter if it's a U.S., German, French,
Brazilian or Argentine company.''
The presidential decree marks the first time
Brazil has by-passed a patent since the country
recognized patent protection for drugs in 1996,
Lula said. The government is pushing for lower
drug prices to limit the cost of its program
providing free treatment to all 200,000 people in
the country infected with AIDS and the HIV virus,
he said.
The move highlights a debate among drug makers
over whether to cut prices, sometimes to below
cost, in certain countries.
Merck, the third-largest US pharmaceutical maker,
said Brazil's move may discourage companies from
investing the hundreds of millions of dollars
needed to find new treatments for disease in poor
nations. Merck doesn't report sales for the AIDS
drug in Brazil, which likely had an insignificant
impact on its $23 billion in sales last year.
"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 company said in a statement.
Merck cut the price of the drug in February to 65
cents a day at the 600 milligram dose, down from
76 cents, for patients and health-care providers
in many countries in Africa and Asia and others
where more than 1 percent of the population is
infected.
"We can't pay more for a medicine when the same
drug is sold at a much cheaper price in another
country,'' Lula said.
Brazil will save $30 million this year by
purchasing the generic, compared with $42.9
million it would otherwise pay Merck. It will cut
$237 million from its AIDS drug bill through 2012,
when the patent right would expire, the health
ministry said. Efavirenz is the principal
component in a 17-drug cocktail to treat AIDS and
is used by 38 percent of AIDS patients.
Brazil will spend 4.2 billion reais ($2.07
billion) on the purchase of all medicines this
year, which accounts for 12 percent of the
ministry's total budget.
Lower prices will free up funds to expand and
improve treatment for hepatitis, an illness common
among AIDS patients, government sources said.
BY OUR PHARMA CORRESPONDENT
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