The New York Times - October 4, 2005
Paulo Prada

RIO DE JANEIRO - Brazil said on Tuesday that it was close to completing an agreement with Abbott Laboratories that would almost halve the price it pays for Kaletra, a drug used to treat AIDS patients.

The pending agreement, which would lower the drug's price to 63 cents a pill from $1.17, comes after months of negotiations and stern warnings from Brazil that it would disregard Abbott's patent and make a generic version of Kaletra domestically if the company did not lower the price to a level it deemed affordable.

A drop in the price of Kaletra, Brazilian officials argued, was essential for the government to sustain and expand the scale of its AIDS program, which provides free medicine and treatment to H.I.V.-positive patients.

Coupled with $3 million worth of other pharmaceuticals that Abbott has offered to donate as part of the agreement, the prospective savings would be $339.5 million from 2006 to 2011, the government said.

Karla Mendes, a spokeswoman for Health Minister José Saraiva Felipe, said, "The new price meets Brazil's demands and will enable the government to apply the savings to other areas of treatment."

The minister, who announced the pending contract at an AIDS conference in São Paulo late Monday, said officials were assessing the final terms but expected to complete it by Thursday. The agreement would take effect in March.

Abbott said it was prepared to close the deal and was waiting to receive a signed copy of it from the Brazilians.

An accord would end a standoff that began in July, when the departing health minister, Humberto Costa, announced an agreement with Abbott at an undisclosed price. But when Mr. Felipe took office, he dismissed the agreement and said he would seek further price reductions.

Kaletra is one of 17 medications that doctors use to treat 170,000 Brazilians covered by the AIDS program and that account for nearly a third of its costs.

To help control future expenses in the program, which is expected to exceed $400 million this year, the Health Ministry said it was also negotiating price reductions for other AIDS drugs, including those made by Merck and Gilead Sciences.

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