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Brazil Pact on AIDS Drugs Kaletra
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By MICHAEL ASTOR
The Associated Press
RIO DE JANEIRO, Brazil (AP) - The agreement between Brazil and a U.S. drug maker that avoided breaking the patent of an important AIDS medicine made everyone a winner, experts said Monday.
The agreement was reached on Friday night, two weeks after Brazil issued an ultimatum threatening to break the patent on the AIDS drug Kaletra if Abbott Laboratories Inc. did not significantly reduce the price.
While details of the final deal were not divulged, both sides claimed victory.
Brazil said Abbott had agreed to price reductions that would save the country $260 million over six years.
Abbott denied it had granted a ``significant'' price reduction, saying only that the agreement accomplished the ``objectives of helping Brazil expand patient access to Kaletra while preserving the company's intellectual property rights.''
The satisfaction on both sides is an auspicious resolution of an issue that could soon resurface with other foreign pharmaceutical companies, said Trevor Neilson of the Global Business Coalition on AIDS.
``Of course, the goal is that everybody wins. If anyone feels like they lost in a negotiation it will come back to haunt us all,'' Neilson said in a telephone interview. ``This means the next time it happens, people come to the table with a sense that there's a way to reach an agreement for both sides without a war.''
The standoff began when Brazil demanded that Abbott sell Kaletra for 68 cents per pill, instead of the original price of $1.17 per pill.
Abbott said ``the agreement allows the Brazilian government to expand the number of patients treated with Kaletra without increasing the government's annual cost for Kaletra. The agreement doesn't specify a per-capsule price.''
As part of the agreement, Abbott also agreed to Brazilian production of a generic drug after 2015, the company said in a statement.
``It's probably a face-saving gesture on both parties' parts,'' said Bob Goldberg, director of the Manhattan Institute's Center for Medical Progress. ``I still question whether a country of Brazil's size and economic strength should be using these tactics to get those drugs in that fashion.''
It wasn't the first time Brazil has threatened to break a patent on an AIDS drugs to negotiate discounts.
In 2001, Swiss pharmaceutical giant Roche Holding AG bowed to similar pressure from the Brazilian government and cut the price of its AIDS drug, Nelfinavir.
Brazil argues that it needs these discounts in order to fund its anti-AIDS program, which provides AIDS drugs free to anyone who needs them.
But Brazil says that Kaletra, together with Merck & Co.'s Efavirenz and Gilead Sciences Inc's Tenofovir, consumes 67 percent of its annual budget for imported AIDS drugs, which constitutes a ``health emergency.'' Brazil is negotiating with Merck and Gilead over the price of their respective drugs.
Under the World Trade Organization's rules, countries suffering a public health crisis may issue ``compulsory licenses'' for patented medicines, allowing them to produce or import generic versions while paying only a small royalty.
Brazil is currently treating 170,000 AIDS patients but expects the number to increase to 180,000 this year and 215,000 in 2008.
07/11/05 15:49 EDT
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