Brazil ignores efavirenz patent

Brazil has broken a patent protection law for Merck, Sharpe and Dohme's (MSD) first-line HIV antiretroviral treatment, efavirenz, over price rebates conflicts for the medication.

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

The decision is the first time Brazil has decided to disregard an international patent. Thailand has already decided to ignore the efavirenz patent in order to keep down costs.

The President of Brazil, Luiz Inacio Lula da Silva, has already signed a law, guaranteeing a 72 per cent price cut, according to local media reports. Da Silva said in a speech: "It is not possible for anyone to get rich with the misery of others. In a choice between our trade and our health, we will take care of our health. We are taking an important step. That is valid for this drug, but also for as many others as are necessary."

According to local media reports, Brazil will initially purchase a similar, generic product from an Indian generic manufacturer. Until now, Brazil obtained efavirenz from Merck for a unit price of USD 1.59. Now it expects to pay USD 0.44 per unit. The reduction could make savings of at least USD 30m annually until 2012. Brazil will then incentivise local pharmaceutical companies to produce a efavirenz copy.

Brazilian healthcare policy provides free medication for HIV-infected patients. According to official figures, 75,000 patients receive free efavirenz. Brazil has the largest HIV positive population in the Latin American region and has wide-spread information and prevention campaigns.

According to the AFP news agency, health minister Jose Gomes Temporao said he did not think the decision would lead MSD to quit the Brazilian market, as the laboratory sold several other drugs in the market. However, a spokesperson from the Brazilian AIDS Association (ABIA) said that MSD may refuse to register new drugs in Brazil, as Abbott did in Thailand with its newer version of Kaletra (lopinavir/ritonavir).

MSD has been trying to persuade the Brazilian government to reconsider, while remaining flexible and committed to exploring a mutually acceptable agreement with the Brazilian government. The US company said it wanted to encourage "equitable access" as well as its ability to "invest in future innovative medicines".

MSD added in a press statement on its website: "R&D-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. 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."

The Brazilian government argues that MSD has not recognised that Brazil is the only country to provide HIV drugs in a universal, free and widespread manner." It added that would pay MSD a 1.5 per cent royalty for the generic drug it will buy from India.

Bill Clinton announces AIDS drug deals
Former US President, Bill Clinton, has revealed a number of agreements with pharmaceutical firms to lower the price of "second line" HIV drugs for patients infected with a virus resistant to initial treatments.

The Clinton Foundation has already negotiated agreements with Indian generic companies, Cipla and Matrix Laboratories. The agreements would generate average savings of 25 per cent in low-income and 50 per cent in middle-income countries. He also revealed a reduced price for a once-daily first-line HIV treatment which combines efavirenz, lamivudine and tenofovir in one pill.

Clinton explained that the new price of USD 339 per patient per year would be 45 per cent lower than the current rate available to low-income countries and 67 per cent less than the price available to many middle-income countries.

The Clinton Foundation is financed by UNITAID, which will provide the foundation with more than USD 100m from tax-derived sources to buy second-line medicines for 27 countries to 2008.

Clinton said Cipla and Matrix collaborated with the foundation to lower production costs in part by securing lower prices for raw materials.