Chicago Tribune - June 28, 2005
Bruce Japsen, bjapsen@tribune.com

Brazil's health minister, Humberto Costa, encouraged other countries to use the World Trade Organization's rules on intellectual property to challenge pharmaceutical companies in their pricing policy on drugs to treat AIDS.

"I think that we can stimulate with this decision that other countries use this legal mechanism," Costa said.

Brazil's top health official last week threatened to break Abbott's patent on Kaletra and manufacture it in its state-owned Farma Manguinhos drug plant in Rio de Janeiro if it didn't get a price break from the North Chicago-based company.

He said Brazil was able to act on its own because it has legislation that allows the government to break drug patents in cases of a health emergency or if it rules the pharmaceutical industry is engaged in abusive pricing.

But he said other countries could take similar bold steps to fight AIDS by using world trade mechanisms. The World Trade Organization's intellectual property agreement allows governments to manufacture generic versions of patented drugs under certain circumstances, including a public health crisis.

Critics, however, said Brazil was hardly a country in crisis, citing its fast-growing economy and low AIDS infection rate.

Brazil said Kaletra's price was so high it created a public health threat. Costa said Kaletra costs $2,630 per patient per year and that Brazil could cut that by about 50 percent by making a generic version of the drug. Brazil said it would save $54 million by creating a generic version of Kaletra.

Costa said Brazil is ready to take action: "In 10 days' time, we will be issuing the compulsory license order."

He added that a ministry lawyer would deliver the order to Abbott's Sao Paolo offices later Monday.

In recent years, Brazil has repeatedly managed to get price reductions on drugs from pharmaceutical companies by threatening to break patents. Costa said Brazil was in negotiations with two other AIDS drugmakers, Merck & Co. and Gilead Sciences Inc.

But Abbott officials say they have to have a reasonable return on their products if they are to be able to continue developing life-saving treatments. Kaletra is one of the company's best-selling medicines and on pace to generate more than $1 billion in worldwide sales this year.

Abbott said Kaletra's price in Brazil is already lower than anywhere else in the world accept for Africa and other underdeveloped countries that participate in its "humanitarian access program for Africa and the Least Developed Countries, as designated by the United Nations," the company said in a statement. "Through that program, Abbott Access, the company offers its tests and treatments at a price that represents a financial loss to the company."

In the U.S., Kaletra costs about $7,000 a year--prices not lost on supporters of free trade who are expressing outrage at Brazil's moves to break AIDS drug patents in recent years.

The country, some observers say, said U.S. lawmakers should move to stop Brazil from what amounts to stealing U.S. drug patents.

"Brazil is a much-better-off country than African nations," Robert Goldberg, director for the Manhattan Institute's Center for Medical Progress said in an interview Monday. "They are the eighth-largest economy in the world [in GDP]."

Goldberg said the country has also been known to pirate everything from software to DVDs.

Abbott, for its part, said the Brazilian government does not have a legal basis to issue a compulsory license for Kaletra on the grounds of "public interest or national emergency."

"A compulsory license is not in the best interest of Brazilian patients because it puts the government's desire to cut health-care spending ahead of patients' need for new and better treatments," Abbott said in a statement. "The discovery and development of innovative new treatments depends on the reasonable return on investment for existing treatments."

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