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Brazil says it is close to deal with Abbott on AIDS drug
  Last Updated: 2005-10-04 14:26:01 -0400 (Reuters Health)
By Todd Benson
SAO PAULO (Reuters) - Brazil is close to reaching a deal with the U.S. pharmaceutical company Abbott Laboratories that would nearly halve the price it pays for Kaletra, the health minister said on Monday.
"We've reached an agreement on price," Jose Saraiva Felipe, who took over as health minister in July, told reporters at an AIDS seminar in Sao Paulo.
"There are just a few differences in the text of the accord that still need to be ironed out," he said, adding that he expected the deal to be signed within "48 hours."
Brazil, which provides free AIDS treatment to all who need it, currently pays $1.17 a pill for Kaletra, a combination of the protease inhibitors ritonavir and lopinavir. That works out to about $107 million a year, or nearly one third of Brazil's annual budget for antiretroviral medicines.
After months of negotiations, Saraiva Felipe said, Abbott agreed to sell the drug for just 63 cents a pill. The deal, which would take effect in February, also includes other benefits for Brazil that would ultimately lower the price to 59 cents, he added.
Brian Kyhos, a spokesman for Abbott, declined to confirm the price reduction, saying "There is nothing signed yet, so there isn't anything to provide details on."
Brazil had threatened to break Abbott's patent if it did not lower its price, insisting that a discount is necessary to ensure the sustainability of an AIDS treatment program that has been praised by the United Nations as a model for other developing nations.
The government claimed it could produce a generic version of Kaletra for just 68 cents a pill, saving about $55 million a year. Abbott countered by arguing that Brazil already received the drug at the lowest price in the world outside of humanitarian programs in Africa.
It appeared that the standoff would end in early July when Saraiva Felipe's predecessor, Humberto Costa, announced on his last day on the job that he had reached a deal with Abbott, based in Abbott Park, Illinois.
But shortly after being sworn in, Saraiva Felipe said he would not endorse the deal, calling Abbott's offer inadequate.
The showdown is not the first time Brazil has clashed with large pharmaceutical companies. It successfully forced drug companies to lower prices on antiretrovirals several times in recent years by threatening to break their patents and produce copycat versions locally.
Brazil is also in talks with Merck & Co. and Gilead Sciences Inc. aimed at reducing prices on efavirenz and tenofovir.
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