Brazil's Bold Move

By Kelly Hearn, AlterNet. Posted March 25, 2005.

Bolstering its reputation as a world leader in price wars over AIDS medications, Brazil is threatening to break antiretroviral drug patents unless drug companies allow it to manufacture generic versions of four major AIDS drugs.

A spokesperson for the Brazilian health ministry offered no comment when reached by telephone Wednesday, but a recent report on the Dow Jones newswire said the government of President Ignacio Lula de Silva has given three U.S. drug companies – Abbott, Gilead and Merck – until April 4 to transfer technology that would let labs make generic versions of Abbott's Kaletra, a combination pill of Lopinavir and Ritonavir, Gilead Science's Tenofovir and Merck's Efavirenz. Brazilian health officials say the four drugs combined take up 67 percent of the government's funds for imported AIDS medicines.

A spokeswoman for Abbott, Michelle Johnson, confirmed in a telephone conversation that the company had received a letter from the government but added that it was too early to tell what its response will be. Merck and Gilead declined interview requests.

Approximately 600,000 Brazilian citizens are HIV-positive and more than one-third of the people living with HIV in Latin America are in Brazil, according to the United Nations.

Brazil's strategy is to ask for voluntary licensing but rely on "compulsory licensing" as a last resort, making generics without permission but paying royalties.

Dr. Jorge Bermudez, a former Brazilian health official now at the Pan American Health Organization, says the government's moves are completely legal under the World Trade Organization's Trade Related Aspects of Intellectual Property Rights agreement. The so-called TRIPS agreement lets poor countries break patents in health emergencies and is considered the developing world's primary tool for securing affordable medications.

"All of this is taking place within legal frameworks," Bermudez said in a telephone conversation from his office in Washington, D.C.. "It is the only way Brazil can sustain universal access to medication."

Bermudez, who has attended meeting with Brazil's ministers of health and foreign policy, said both officials regard the patent confrontations as a matter of domestic political will. "They recognized that Brazil has made a political decision to ensure universal care has been made and now the government must act."

Brazil's leftist government has one of the world's most progressive AIDS programs. Already the state makes generic retroviral drugs and distributes them for free.

"For the last few years, observers say Brazil has pushed drug makers to lower prices with threats of breaking patents but did not follow through until now. In January 2004, officials negotiated lower prices with Roche, Gilead and Abbott, reportedly landing discounts of up to 76 percent for the five most expensive antiretroviral medications. The deal was expected to extend treatment to 20,000 new patients in 2004. Abbott's Michelle Johnson did not offer statistics on the company's past pricing decisions, but said, "Brazil receives Kaletra for the lowest price in the world outside of Abbott's humanitarian programs for least developed countries as designated by the UN."

Patent laws required for entering the WTO are seen as putting costly medicines out of the reach of poor countries and patients. In a nod to WTO conformity, India's lawmakers on Tuesday passed a sweeping new patent law that critics believe will place clamps on the country's generic drugmakers, which supply AIDS medication to millions of poor people in and beyond India.

AIDS activists have taken issue with transnational agreements such as NAFTA, arguing that patent protections designed to benefit multinational corporations hamper the ability of poor countries to apply compulsory licensing under TRIPS. Bermudez said PAHO officials and some health ministers from other Latin American are concerned that the Central American Free Trade Act will do the same. The agency is also concerned that health ministers in signatory countries in some cases do not even participate in the negation of trade agreements.

Brazil's move, experts say, could embolden other countries in Latin America, where last year 1.7 million adults and children were living with HIV. In 2003, 10 countries bonded together to negotiate lower drug prices. Health ministers in Peru, Bolivia, Colombia, Ecuador, Venezuela, Chile, Argentina, Mexico, Paraguay and Uruguay negotiated an agreement in Lima, Peru that spelled a $120 million a year price reduction of drugs for HIV/AIDS.

At the time of the agreement, PAHO officials said antiretroviral drugs, which cost from $1,000 to $5,000, was a price impossible for the majority of developing countries to afford. After the Peru agreement, prices were slated to fall between $350 and $690, amounting to an increase of 150,000 annual treatments for the signatory countries.

Kelly Hearn is a former UPI staff writer who lives in Washington DC and Latin America. His work has appeared in several U.S. publications and websites including the Christian Science Monitor, American Prospect and High Country News.

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