As I mentioned previously, compulsory licensing is a perfectly legal option underlined by TRIPs (Agreement on Trade-Related Aspects of Intellectual Property Rights) in response to national emergencies for governments to authororize the bypassing of drug patents. Thailand threatened to do it recently, Brazil goes one better.
President Luiz Inacio Lula da Silva took steps Friday to let Brazil buy an inexpensive generic version of an AIDS drug made by Merck & Co. despite the U.S. drug company’s patent.
Silva issued a “compulsory license” that would bypass Merck’s patent on the AIDS drug efavirenz, a day after the Brazilian government rejected Merck’s offer to sell the drug at a 30 percent discount, or $1.10 per pill, down from $1.57.
The country was seeking to purchase the drug at 65 cents a pill, the same price Thailand pays.
This story fits the script in every possible way. Here’s the drug company’s “disappointed” response:
Amy Rose, a spokeswoman for Whitehouse Station, N.J.-based Merck, said earlier that the company would be “profoundly disappointed if Brazil goes ahead with a compulsory license.”
“As the world’s 12th largest economy, Brazil has a greater capacity to pay for HIV medicines than countries that are poorer or harder hit by the disease,” Merck said in a statement after Silva’s announcement.
Ah, the irony of a large pharma company appealing to Brazil’s sense of fairness!
The usual US government/chamber of commerce type’s scold and threat to withold further foreign investment:
But the U.S.-Brazil Business Council said the decision was a “major step backward” in intellectual property law and warned it could harm development.
“Brazil is working to attract investment in innovative industries … and this move will likely cause investments to go elsewhere,” the council said in a statement.
Who are the US-Brazil Business Council? It is an affiliate of the U.S Chamber of Commerce. Its website reveals it to be a lobbying and networking group of high powered U.S executives “fostering” U.S-Brazil trade relations. Hmm, I wonder who’s side they will take!
But, we forget what this is about, the health of thousands of AIDs patients (and the money it costs to treat them).
Brazil provides free AIDS drugs to anyone who needs them and manufactures generic versions of several drugs that were in production before Brazil enacted an intellectual property law in 1997 to join the WTO.
But as newer drugs have emerged, costs ballooned and health officials warned that without deep discounts, they would be forced to issue compulsory licenses.
Efavirenz is used by 75,000 of the 180,000 Brazilians who receive free AIDS drugs from the government. The drug currently costs about the government about $580 per patient per year.
Brazil is doing absolutely the right thing by bargaining and playing hardball. it wants to pay the same prices Thailand pays, and should continue to bargain till it gets there. There’s no sense in being a sovereign powerful nation if you can’t shakedown a pharma company, is there!