June 25, 2005

Brazil to Compulsorily License AIDS Drug

Link: Brazil to Copy AIDS Drug Made by Abbott - New York Times.

Brazil announced late Friday that it would start copying an AIDS drug made by the American pharmaceutical company Abbott Laboratories to provide a cheaper version for its AIDS treatment program, becoming the first country to break the patent of an antiretroviral medicine. The Brazilian government, which provides free AIDS treatment to all who need it, estimates that it will save about 130 million reais a year, or about $55 million, by making a generic version of the drug, called Kaletra.

The government contends that it can make the drug for 68 cents a pill, almost half the $1.17 that it is paying Abbott for the medication.

The country's health minister, Humberto Costa, said late Friday that the government decided to break the patent after Abbott refused to lower its price voluntarily or allow Brazil to make a cheaper version of the drug.

Abbott, which is based in Abbott Park, Ill., now has 10 days to present a counteroffer before Brazil officially breaks the patent. If it does not, Mr. Costa said Brazil would pay the company a 3 percent royalty on the generic version of the drug, as required by the World Trade Organization.

Article 31 of TRIPs permits compulsory licenses "in the case of a national emergency or other circumstances of extreme urgency," but requires the licensor to compensate the patent holder: "the right holder shall be paid adequate remuneration in the circumstances of each case, taking into account the economic value of the authorization."

Posted by Anupam Chander on June 25, 2005 at 10:35 AM in Globalization | Permalink