Important note: Information in this article was accurate in 2006. The state of the art may have changed since the publication date.

Reuters NewMedia - November 30, 2006
Darren Schuettler

The action drew a swift riposte from U.S. drug maker Merck & Co Inc, which holds the patent on Efavirenz. The firm denounced the Health Ministry decision to issue a five-year licence for domestic production and imports of a generic version of the anti-retroviral drug.

But AIDS activists and health experts cheered loudly.

"This is both a brave and a progressive step by the Royal Thai Government to place the interests of people living with HIV in Thailand front and centre," UNAIDS country coordinator Patrick Brenny told Reuters on Thursday.

Under World Trade Organisation rules, governments may declare a "national emergency" and issue compulsory licences, allowing production of a patented drug without consent from a foreign patent owner.

Merck will receive a 0.5 percent royalty on sales of the locally produced drug, expected to cost half the 1,400 baht ($38.8) per month charged by the company.

Thailand, where 580,000 people are living with HIV/AIDS, has won international praise for its swift roll-out of a national drug programme that now treats more than 82,000 patients.

But as people live longer and treatment gets more expensive, the government's commitment to provide universal access to care is facing serious challenges and costs.

"The prices are very high, making it a big hurdle for patients to access them and the government cannot afford them," Thawat Suntrajarn, head of the ministry's Department of Disease Control, said in the statement.

"In the long run they need this anti-retroviral drug to live a normal life like others", he said, and supply shortages had also prompted the government to act.

SURPRISE MOVE

Merck said the government, appointed by the military after a Sept. 19 coup ousted billionaire prime minister Thaksin Shinawatra, had made no attempt to consult the company.

"Issuing a compulsory licence is a serious decision that should be taken as a last resort when no other means exist to access essential patented technology," Merck said in a statement. The company said it made no profit on the drug in Thailand.

Foreign drug firms say many patented drugs are already available at cost or even free in developing countries, and the root of the problem is inadequate infrastructure.

But health campaigners argue that not enough poor people have gained access to life-saving drugs since the WTO granted the special patent exemption in 2001.

They accuse the United States and other rich nations of bullying developing countries to impose stricter patent rules in order to save drug monopolies.

Paul Cawthorne, head of Doctors Without Borders in Thailand, expected stiff lobbying by the U.S. government on behalf of Merck and urged Bangkok to issue more licences for cheaper versions of other costly drugs.

"For sure, people are taking this seriously," he said. The decision may have been intended to strengthen Thailand's hand in negotiating prices with other drug firms, he added.

The Government Pharmaceutical Organisation, Thailand's state-owned drug maker, said it would import generic Efavirenz until the GPO made its own version in June 2007.

The GPO would charge 700-800 baht per month for its Efavirenz, a "second-line" drug used by people who suffer side-effects or develop resistance to initial treatments.

Thawat said the government would save 4 billion baht over the next five years and would be able to afford to treat 100,000 people, up from 17,000 who have access to the drug now.

A World Bank study of Thailand's drug programme projected that second-line therapy would account for more than half of spending on it by 2010 and could reach $500 million a decade later, up from a 2006 budget of $70 million.

It said overriding drug patents required "high-level political resolve" because it could carry trade repercussions.

AIDS activists worried last year that Thailand would give up its override rights in free-trade talks with the United States, but negotiations are in limbo until a new civilian government is elected in Thailand late next year. ($1 = 36.04 baht)

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