Brazil to Break Roche's Patent on AIDS Medication Nelfinavir

Wall Street Journal - August 23, 2001
Miriam Jordan, Staff Reporter of The Wall Street Journal

SAO PAULO, Brazil -- Brazil announced that it plans to copy an AIDS medication patented by Roche Holding Ltd., signaling its determination to keep pressure on multinational companies to lower drug prices.

Health Minister Jose Serra said a state-owned laboratory will begin production of Roche's Viracept, the generic of which is nelfinavir, because the Swiss pharmaceutical company hadn't offered the drug at a price acceptable to Brazil, despite six months of negotiations. "We are in favor of patents, but not the abuse of patents," he said, referring to high prices of patented drugs.

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Brazil Makes a Name for Itself Pumping Out Cheap AIDS Drugs (April 27)

A Health Ministry spokesman said that final laboratory tests are being conducted on a generic copy of Viracept with a view to start full-scale distribution next February. "We already have the technology to produce the drug," he said.

Roche said in a statement that it "is surprised by the news because negotiations between the company and the health ministry have been friendly." It added, "Roche already conceded discounts close to those requested by the ministry."

Mr. Serra said that Roche's offer wasn't fair, but he didn't rule out further negotiations. Roche had offered to reduce the price of the drug by one-third; Brazil demanded a 40% reduction.

Viracept is the most expensive drug distributed among Brazil's 100,000 AIDS patients. Last year, it accounted for 28% of Brazil's $303 million expenditure on AIDS medications. In late March, Brazil proclaimed a major victory when Merck & Co. cut the price of two AIDS-fighting drugs by about two-thirds after Mr. Serra threatened to produce them locally.

Mr. Serra said Wednesday that Brazil will issue a "compulsory license" paving the way for breaking the patent on Roche's drug. Brazil's patent legislation entitles the government, in a national emergency, to issue such a license for a local firm to make a product if the patent holder hasn't started manufacturing it locally.

Brazil's successful AIDS program is anchored in the local production and free distribution of cheap generic versions of expensive brand-name drugs. Brazil believes it has saved about $500 million in AIDS medication in the past four years thanks to local manufacturing. It produces eight out of 14 drugs that constitute the AIDS cocktail, but it hasn't broken any international patents thus far.

Brazil's AIDS program is considered a model for prevention and treatment in the developing world. The number of AIDS-related deaths in the country has fallen 50% in four years. Last year, there were about 540,000 Brazilians infected with HIV -- the virus that causes AIDS -- half the number projected by the World Health Organization six years ago.

But Brazilian officials say the country will need to import even more patented medications in the future because the number of people with AIDS is likely to grow and patients sometimes develop resistance to existing drugs.

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