BRAZIL: Brazil Threatens to Break Patent on Merck AIDS Drug

Important note: Information in this article was accurate in 2007. The state of the art may have changed since the publication date.

BRAZIL: Brazil Threatens to Break Patent on Merck AIDS Drug

Associated Press (04.25.07) - Thursday, April 26, 2007
Vivian Sequera

Brazil on Wednesday took the first step in a process that could lead to breaking a patent on Merck & Co.'s AIDS drug efavirenz, with Health Minister Jose Gomes Temporao signing a decree declaring it a "public interest" medicine. "Brazil is not doing this as a threat, nor to lower the price of other medicines, but to guarantee its program of attending [AIDS] patients," the minister said at a news conference.

Under both rules established by the World Trade Organization and Brazilian law, issuing a compulsory license for a drug is permitted in cases of a public health emergency or if the pharmaceutical industry is determined to be engaging in abusive pricing.

Efavirenz is the most widely used drug in Brazil's free AIDS treatment program: 75,000 of the 180,000 Brazilians in the program are currently taking the medicine. When the country began importing efavirenz in 1999, just 2,500 patients were on the drug.

Temporao said Merck now has seven days to negotiate a lower price for efavirenz. If a deal cannot be reached, Brazil could issue a compulsory license that would allow it to produce efavirenz or buy an Indian-made generic version of the drug. Merck would receive just a small royalty.

Whitehouse Station, N.J.-based Merck said it is committed to reaching a deal with the Health Ministry. "The company does not believe compulsory licensing is in the best interest of patients," said spokesperson Amy Rose.

In November, Brazil initiated price-reduction negotiations with Merck, asking to pay the same 65 cents per 600-mg efavirenz pill that Thailand does. At the time, Brazil was paying $1.59 per pill. Merck offered a 2 percent reduction, which the Health Ministry turned down.
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