Bay Area Reporter - July 6, 2001
Liz Highleyman

In May 2000, the U.S. lodged a complaint with the World Trade Organization concerning Brazil's 1996 industrial property law, which requires that a foreign company forfeit its patent rights if it does not begin to manufacture a product in Brazil within three years. This past January, the U.S. requested that a WTO dispute settlement panel review the law. The U.S. contends that the local production provision is protectionist, while Brazil maintains that the law adheres to the WTO's Trade-Related Aspects of International Property Rights (TRIPS) agreement.

Brazil, which has the most advanced HIV/AIDS treatment and prevention program of any developing country, provides free anti-HIV drugs to all people with AIDS. A state lab produces generic versions of eight AIDS drugs and the country imports four more, decreasing the annual cost of treatment from about $10,000-$15,000 to about $3,000-$5,000 per person per year; Brazil's program has reduced AIDS deaths by half.

Last week, U.S. Trade Representative Robert Zoellick said that the U.S. would not pursue its case before the WTO, but would instead "hash out the dispute directly with Brazil." The two countries agreed to set up a bilateral consultative mechanism to discuss patent issues, and Brazil agreed to give the U.S. 10 days' notice before it applies its patent forfeiture provision. The U.S. retained the right to revive the case if direct negotiations fail.

Said Zoellick, "The United States has been supportive of Brazil's bold and effective program to combat the HIV/AIDS crisis. With this positive step, we will be able to harness our common energy toward our shared goal of combating the spread of this dangerous virus."

Brazilian Trade Representative Jose Alfredo Graca Lima called the U.S. announcement "a victory for both sides, a victory for common sense." Zoellick said the agreement was "another step in the administration's flexible approach to health and intellectual property issues that we affirmed earlier this year." In February, the Bush administration announced that it would uphold former President Clinton's executive order allowing poor countries to use TRIPS provisions to produce or import essential medicines.

In the wake of the April withdrawal of a pharmaceutical company lawsuit against a similar South African law allowing the local production or import of generic drugs, several treatment advocates, international organizations, and media outlets called on the U.S. to withdraw its complaint against Brazil. In April, 52 of the 53 members of the U.N. Human Rights Commission voted in favor of a Brazilian resolution calling on all nations to refrain from taking measures "to deny or limit equal access for all persons to preventive, curative or palliative pharmaceutical or medical technologies used to treat pandemics such as HIV/AIDS"; the U.S. representative abstained from the vote.

In early May, Zoellick released a report criticizing Brazil's patent law, provoking a harsh rebuttal from Brazilian President Fernando Henrique Cardoso, who stated, "We're not here to challenge and break patents at any price. But I want to affirm that if it is for the health of our people, we won't hesitate."

Later in the month at the World Health Organization's annual assembly in Geneva, Brazil's health minister offered a resolution opposing the use of international trade agreements to restrict poor countries' access to drugs, but the assembly did not approve the proposal. Brazilian representatives had also planned to raise the issue of affordable drug access at last week's U.N. special session.

The announcement was generally well received. "This is a tremendous victory for the Brazilian people and for people with AIDS worldwide," said Paul Davis, of ACT UP/Philadelphia and the HealthGAP Coalition, a group that has spearheaded the fight for affordable drug access worldwide. "It will serve as an important precedent for other nations desperate for ways to make treatment more affordable to their populations."

According to GlaxoSmithKline spokeswoman Nancy Pekarek, "We certainly like the fact that the U.S. and Brazilian governments are going to be talking about this and hope that by doing it this way, in a bilateral process, that it can actually get resolved more quickly."

But James Love, of the Consumer Project on Technology, was less enthusiastic. "The U.S. government should not insist on supervising a nation's day-to-day administration of its patent laws," he said. "At some point, we have to respect national sovereignty, and in the case of Brazil, let Brazil continue its difficult and costly efforts to treat poor AIDS patients."
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