Health

Brazil breaks patent on Merck’s AIDS drug

By Dweep Chanana ⋅ May 7, 2007 ⋅  Email this post ⋅ Post a comment

On Friday May 4, Brazil decided to break off negotiations with Merck on the pricing of its AIDS drug Efavirenz, instead issuing a compulsory license to import the drug from India (reported on BBC, Reuters, WSJ Health Blog). Brazil was presently paying $1.6 per pill, and had offered a reduced price of $1.10. Brazil, however, wanted the drug priced the same as for Thailand - $0.65 per pill.

This is significant. This is the first time Brazil has invoked its rights to compulsory licensing. However, it follows a trend in which developing countries are willing to assert their rights under the Doha Declaration on Public Health. Thailand had previously also broken the same patent, resulting in the country being placed on the US’ list of copyright violators. India too is defending its patent law, in its own courts from Novartis. Clearly, the developing world is willing to push the envelope, to force drug majors to lower their prices to near-generic levels. And they are willing to suffer US and European sanctions in the process.

Brazil will now import a generic version of Efavirenz from India, for as little as $0.45 per pill. That is expected to save Brazil’s taxpayers “$30 million this year and $236.8 million by 2012″ according to the health ministry.

The pharmaceutical industry is, of course, crying foul, saying “Brazil’s decision could discourage pharmaceutical firms from investing in treatments for illnesses prevalent in the developing world.”

Brazil’s move, Merck said, sent “a chilling signal to research-based companies about the attractiveness of undertaking risky research on diseases that affect the developing world.”

On the contrary, this decision will have no impact on research on diseases that affect the developing world. Why? Because such research does not exist. The pharmaceutical industry has long neglected such diseases because they never were, and are not likely to be, a major market.