Tuesday, November 30, 2004

Brazil to go to compulsory licensing of AIDS patents

Although Brazil will pay royalties to the patent holders of three to five foreign drugs used in an anti-AIDS cocktail central to its innovative program to fight AIDS, Brazil will violate the patents because Brazil will do so without permission from the drug manufacturers. "After technical analysis of the sustainability of the universal access to medication in this country, we determined that we have to move to a situation of self-sufficiency through compulsory licensing," said Pedro Chequer, head of the government's AIDS program.

Merely as an historical reference, recall the program of the United States for compulsory licensing of aircraft patents in the time period 1914-1918. Recall also the handling of radio patents in this time period. Recall also the history of CIPRO during the anthrax scare.

**UPDATE. August 25, 2005** from Chicago Tribune

A key question is whether the two countries [Brazil and Argentina] plan to break international patents, many of which are held by U.S. companies, and use the venture to produce their own versions of the most effective and expensive drugs to fight AIDS.

Gines Gonzalez Garcia, Argentina's minister of health and environment, said the accord was aimed at "guaranteeing our inhabitants access to these medicines."

"Without prejudice to our understanding of the international rules of the game," Gonzalez Garcia told the Buenos Aires daily Clarin, "what comes first are the interests of the citizens of each country."

His Brazilian counterpart, the newly appointed Jose Saraiva Felipe, was more assertive. He is under pressure from health experts and lawmakers to declare AIDS a medical emergency, which some Brazilian officials argue would allow the government to manufacture patented anti-HIV drugs without violating international trade agreements.

"We are going to conduct ourselves in accordance with the public interest," said Saraiva Felipe, who took over as health minister last month.

"There is no predisposition to gratuitously violate intellectual property, but if Brazil goes so far as to develop medicines, especially anti-retrovirals, we could come to adopt this attitude."

Anti-retroviral drugs, which kill or inhibit the growth of HIV, are key components in the so-called AIDS cocktail.

Brazil battles drugmaker

Brazil is locked in a battle with Abbott Laboratories over one such drug, Kaletra. Brazil, which provides free AIDS care to its citizens, wants the North Chicago company to further lower Kaletra's price. Abbott and other drugmakers say discounts to Brazil have gone far enough.

The two parties appeared to have reached a deal last month that would have dropped the Brazilian government's cost of Kaletra from its current $1.17 a pill while affirming Abbott's patent rights.

But after Saraiva Felipe took office, he said no agreement had been signed yet. He pressed Abbott for further discounts, saying Brazilian companies could produce a generic version of Kaletra for as little as 41 cents a pill.

Kaletra, also known as Lopinavir/Ritonavir, is a protease inhibitor. That means the drug blocks an enzyme, protease, that HIV needs to make more copies of itself. The drug is one of Abbott's biggest moneymakers, expected to produce $1 billion in sales this year.

Abbott submitted a revised pricing proposal to Brazil last week, the company said. In a statement, the company pledged "to negotiate in good faith . . . to finalize an agreement that Brazil will honor."

Like other major drug companies, Abbott charges different prices in different countries. It says Brazil, which boasts the world's ninth-largest economy, can afford the "fair price" Abbott is demanding. And it argues that without strong profits from Kaletra and other successful drugs, Abbott would be unable to fund the research that produces such breakthroughs.

But Brazilian officials say Kaletra itself eats up a third of the country's AIDS spending. Anti-HIV medicines account for a quarter of the Health Ministry's budget, Saraiva Felipe said.

"We say the price of drugs has to be based not on how rich the country is but how rich the person is," said Michael Weinstein, president of AIDS Healthcare Foundation, a Los Angeles medical and advocacy group.

"Brazil is one of the world leaders in AIDS prevention as well as in providing access to treatment and drugs," Weinstein said, praising Brazil's aggressive stance with drugmakers as well as its willingness to cooperate with other nations.

This month in Argentina, officials from 11 Latin American nations reached a deal with 26 drug and diagnostic companies to lower the prices governments pay for anti-HIV drugs and tests. Among the signatories were Brazil, Mexico and Argentina, Latin America's three biggest pharmaceutical markets.

Though AIDS activists complained that the reductions, which range from 15 percent to 55 percent, are still not enough, officials said they will help governments reach their goal of providing anti-retroviral therapy to everyone who needs it.

According to the World Health Organization, Latin America and the Caribbean are home to about 465,000 people under age 50 who need anti-retroviral therapy. Nearly two-thirds of them are now being treated, the WHO estimated.

Risk of trade sanctions

Brazil runs the risk of trade sanctions should it break the patents on Kaletra or other drugs. Some members of the U.S. Congress already are preparing retaliatory legislation, a real threat for Brazil's export-fueled economic recovery.

Yet Brazil has won price reductions from multinational companies in part by developing its own technology and capacity. Brazilian and Argentine officials say they must pursue alternatives in case drug shortages arise or the cost of drugs from abroad is deemed too high.

But this week's accord should not be viewed as merely another aspect of their negotiating strategy, Argentine officials said.

"It's downplaying this to say the agreement is only to negotiate prices," said Gabriela Hamilton, director of Argentina's AIDS and HIV program.

She also said the nations would work together on drugs to treat diseases other than AIDS.


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