AEGiS-WSJ: Brazil Issues AIDS-Drug Ultimatum: Generic Production to Begin If Abbott Won't Lower Price; Bristol's African Initiative

Important note: Information in this article was accurate in 2005. The state of the art may have changed since the publication date.

Brazil Issues AIDS-Drug Ultimatum: Generic Production to Begin If Abbott Won't Lower Price; Bristol's African Initiative

Wall Street Journal - June 27, 2005
Matt Moffett, matthew.moffett@wsj.com and Heather Won Tesoriero, heather.tesoriero@wsj.com

Amid growing friction between Brazil and the U.S. over trade and AIDS policy, Brazil said Friday it was giving Abbott Laboratories 10 days to lower its price for the AIDS drug Kaletra. If Abbott refuses, Brazil said it would authorize a state-run laboratory to produce a version of Kaletra for a price 58% that charged by Abbott.

Brazil said its action would be based on national and international trade legislation allowing the issuance of compulsory licenses for drug production in emergencies or as a matter of public interest.

Abbott strongly contested the Brazilian ultimatum. "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," the Abbott Park, Ill., company said. "The discovery and development of innovative new treatments depends on the reasonable return on investment for existing treatments."

Abbott noted that it was already selling Kaletra to Brazil at a lower price than anywhere outside of Africa and other less-developed countries participating in a humanitarian-access program.

Kaletra had $896 million in world-wide sales last year, making it Abbott's third-biggest drug.

In recent years, Brazil has threatened several times to break AIDS drug patents in order to obtain lower prices. But the dispute with Abbott is the most serious standoff to date. Brazil said that almost one-third of the $394 million it has budgeted for antiretroviral drugs this year will be used to purchase Kaletra. While the price the government pays for Kaletra has come down to $1.17 per pill from $1.60 in 2002, Brazilian Health Minister Humberto Costa said Brazil can manufacture the drug for 68 cents, saving $54 million a year.

Brazilian AIDS activists said the country urgently needs to lower drug prices, as the number of people receiving free AIDS drugs is projected to increase to 215,000 in 2008 from 170,000 currently. "We don't have anything against the drug companies, but with thousands of new drug recipients every year, this is a question of survival," says Roberto Pereira, coordinator of the Center for Sexual Education, an AIDS awareness group in Rio de Janeiro.

Brazil said it is continuing negotiations with Gilead Sciences Inc. and Merck & Co. that are aimed at reducing prices on the AIDS drugs they produce.

Separately, Bristol-Myers Squibb Co. and Baylor College of Medicine will send as many as 250 pediatricians from around the world to Africa over the next five years to help care for the burgeoning population of children with AIDS, the organizations plan to announce today. Bristol-Myers, of New York, and Baylor, of Houston, also plan to build four children's HIV/AIDS treatment centers. The drug maker is also set to announce price reductions to its pediatric HIV medicines in some of the least-developed countries.

Pediatricians in the program will commit to one- or two-year stints in the centers and get relief of as much as $40,000 a year in school loans, plus living expenses. The program is meant as an interim measure until there are more Africans trained to provide pediatric HIV/AIDS care, and the corps will train medical professionals as part of its work. Two of the centers will be built in collaboration with local governments in Kampala, Uganda, and Bobo-Dioulasso, Burkina Faso. The developing-world locations of the other two centers haven't been chosen.

According to Unicef, last year about 640,000 children under age 15 became infected with HIV, and about 510,000 children died of AIDS. Since 1999, Bristol-Myers has awarded $120 million in grants for pediatric AIDS work. As part of the latest efforts, it's committing an additional $30 million, and Baylor is donating $10 million.

---- Leila Abboud and Marilyn Chase contributed to this article

Write to Matt Moffett at and Heather Won Tesoriero at

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