Info Service on Health Issues (May 07/02)
BRAZIL SANCTIONS COMPULSORY LICENSE ON EFAVIRENZ
The Brazilian President, Luiz Inacio Lula da Silva, on 4 May signed
a decree sanctioning the compulsory licensing of the antiretroviral
drug Efavirenz. The drug was declared to be of "public interest"
in an ordinance issued by the Minister of Health on 24 April 2007. Brazil
has stated that its decision is in "absolute compliance with international
requirements and with Brazilian legislation."
The patent holder, Merck, was given time in which to make a new proposal
on the price it would charge for the drug. Merck offered the drug to
Brazil at a 30% discount on the current price of US$1.59 per tablet
(i.e. at US$1.11 per tablet) but Brazil MOH reports that it could obtain
the product elsewhere for US$0.45 per tablet.
The antiretroviral drug Efavirenz is the most used imported drug in
AIDS treatment in Brazil. Currently, 38% of AIDS patients take Efavirenz
as part of their treatment scheme. It is estimated that by the end of
this year, 75,000 of Brazil's 200,000 AIDS patients will be taking the
At the current prices charged by Merck in Brazil, the annual cost per
patient is equivalent to US$ 580, representing budgeted expenditure
of US$ 42.9 million for the year 2007. The prices charged for the generic
product result in an annual cost per patient that varies between US$
163.22 and US$166.36. Based on these amounts, under compulsory licensing,
expenditure reduction in 2007 will be around US$ 30 million. Savings
of US$ 236.8 million are estimated to be made by the year 2012, when
the Efavirenz patent expires.
Compulsory licensing is a flexibility provided for by Article 31 of
the TRIPS Agreement. This practice is used by developed countries, such
as Italy and Canada in relation to pharmaceutical products and also
by developing countries. In the case of antiretroviral drugs, Mozambique,
Malaysia, Indonesia and Thailand have already made use of this provision
to either import generic versions from India or to locally manufacture
News posted on 4/5/2007 on the website of the Brazil National STD and
AIDS programme (at www.aids.gov.br)
gives the following background on the negotiations with drug companies
on other drugs.
"In August 2001, the then Minister of Health, José Serra, requested
the compulsory licensing of the Nelfinavir patent (made by Roche). The
decision was taken following nine months of negotiations with the laboratory.
However, on the same day as the announcement was made, the Minister
further announced that the process had been interrupted. This happened
because Roche agreed to reduce the price of the drug by 40%."
"In December 2003, Health Minister Humberto Costa announced that
compulsory licensing could be adopted for the production of Nelfinavir
in Brazil. On that occasion, Humberto Costa explained that he expected
to negotiate with Roche, but that compulsory licensing would be decreed
if necessary. In January 2004 the Health Minister was successful in
obtaining a price reduction for five drugs: Nelfinavir, Lopinavir, Efavirenz,
Tenofovir and Atazanavir. The agreement resulted in a 37% reduction
in the prices
previously paid for these antiretroviral drugs."
"In June 2005, the President of the Republic, Luiz Inácio Lula
da Silva, and the Minister of Health, Humberto Costa, signed a declaration
of public interest in relation to the antiretroviral drug Kaletra (Lopinavir
+ Ritonavir), made by Abbott Laboratories. In July of the same year,
the Minister of Health issued a statement on the conclusion of the negotiations
with Abbott, which ensured a reduced price for the drug for six years,
access to the new Kaletra formulation (known as Meltrex) and the transfer
of the technology for the formulation of Lopinavir + Ritonavir. The
laboratory agreed to reduce the unit price of Kaletra capsules from
US$ 1.17 to US$ 0.63 each, with effect from March 2006, representing
a saving of US$ 339.5 million between 2006 and 2011."
Please find below an Interview with the Brazil Minister of Health JOSÉ
Sangeeta Shashikant & Riaz Tayob
Third World Network
Tel: +41 908 3550
Fax: +41 908 3551
(Posted on IP Health list serv on 7/5/2007 and translated by Michel
Lotrowska (MSF, Brazil)
07/05/20 - FOLHA DE SAO PAULO
LEILA SUWWAN OF BRASILIA FILIAL
FOLHA - The director of the Chamber of Commerce of the US, Mark Smith,
considered Brazil and the Military government (of Thailand) as being
equal. What do you think of this declaration?
JOSÉ GOMES TEMPORÃO - It was a "rude" and "out of place"
declaration revealing inclusive a profound lack of knowledge in relation
to the whole process in which the compulsory license took place. He
would need to think about the following question: Which Ministry decides
to sell this product 60 % cheaper to a military leaded government than
to a strong democracy like the one in Brazil?
FOLHA - He also sustains that the government should not have interrupted
TEMPORÃO - This is not true. In reality, the company showed that it
never wanted to negotiate with the Brazilian Government. In seven meetings,
the only discount offered was of 2%. After I published the decree of
public interest in preparation of the compulsory license, then yes,
there was a proposal of 30 % discount. The ministry considered that
proposal not satisfactory and answered that we had no more interest
in sitting to discuss, but that we were waiting for a serious and consistent
FOLHA - Was the laboratory thinking that the government was bluffing?
TEMPORÃO - Brazil has changed. The government is serious, puts public
interest and health above any other question. If the laboratory made
that evaluation, it made a huge mistake. From Merck side, there were
always very intransigent, little serious and little professional. Inclusive,
there was the problem of the lack of quality of the Brazilian executives
of Merck, that never took seriously our proposal and never treated us
seriousness that Brazil deserves.
FOLHA - Will investments run away?
TEMPORÃO - All our data show the opposite. The Brazilian market is within
the ten higher in the world; it reaches US$ 10 billions per year and
is still growing.
FOLHA - Brazil wants investments but not exploitation?
TEMPORÃO - Exactly. We want fair rules, fair prices and a transparent
FOLHA - What about the negative impact of investment in R&D?
TEMPORÃO - I have demolishing data. Merck uses 20% of its world sales
in R&D, nearly US$ 5 billion per year. In Brazil, it spends only
FOLHA - The Chamber of Commerce also said that Brazil might possibly
get out of the General Preferential System, a program of fiscal benefits
(through which the country exports US$ 3,5 billions to the US.
TEMPORÃO - This is a specific view of this man, he doesn't speak in
the name of the American government. There is no indication that this
might take place. There is an attempt to disqualify and to make the
decision of the Brazilian government look like piracy and like a break
(violation) of patent. Brazilian decision is totally legal. His arguments
are highly ideological, a political posture of retaliation.
FOLHA - Interfarma (Association of Pharmaceutical Industry in R&D)
said that the generic from India has no quality and can shorten the
life of patients with Aids by up to two years.
TEMPORÃO - This is a lie. We have documents of the World Health Organization
that guarantee the quality of generics. This is one more of irresponsible
declaration that creates an atmosphere of insecurity for the patients.
FOLHA - Any chance to come back to discussion with Merck?
TEMPORÃO - At this moment, total silence. We are already in the process
of purchasing generic versions.
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