Important note: Information in this article was accurate in 2005. The state of the art may have changed since the publication date.
The New York Times - Saturday, June 25, 2005
Todd Benson
The Brazilian government, which provides free AIDS treatment to all who need it, estimates that it will save about 130 million reais a year, or about $55 million, by making a generic version of the drug, called Kaletra.
The government contends that it can make the drug for 68 cents a pill, almost half the $1.17 that it is paying Abbott for the medication.
The country's health minister, Humberto Costa, said late Friday that the government decided to break the patent after Abbott refused to lower its price voluntarily or allow Brazil to make a cheaper version of the drug.
Abbott, which is based in Abbott Park, Ill., now has 10 days to present a counteroffer before Brazil officially breaks the patent.
If it does not, Mr. Costa said Brazil would pay the company a 3 percent royalty on the generic version of the drug, as required by the World Trade Organization.
Abbott criticized the move, arguing that Brazil already receives the drug at the lowest price in the world outside of humanitarian programs in Africa.
"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," it said. Still, the company did not say how it would respond to Brazil's decision, saying only that it remained willing to work with the government to find a "mutually agreeable solution."
The decision could strain relations between the left-leaning government of President Luiz In cio Lula da Silva and the Bush administration, which has been pressing Brazil in trade talks to step up its protection of intellectual property rights. Several members of Congress have already asked the United States trade representative, Rob Portman, to retaliate by applying trade sanctions.
Brazil is also negotiating with two other pharmaceutical giants, Gilead Sciences and Merck, to get them to lower the price on two widely used antiretroviral drugs, Tenofovir and Efavirenz.
Brazil already legally makes copycat versions of several AIDS drugs, and has successfully forced international pharmaceutical companies to lower prices in the past by threatening to break patents.
But the government argues that the high cost of newer antiretroviral medicines like those made by Abbott threatens to jeopardize its widely praised AIDS program.
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