From Alec van Gelder of the International Policy Network:

Surprise, surprise... Brazil will issue a compulsory licence on Efavirenz in seven days unless Merck offers the price Thailand has now "negotiated".

Below is the Brazilian government agitprop.

Brazil declares Efavirenz to be of public interest

The Brazilian Minister of Health, José Gomes Temporão, has signed a decree published today in the Federal Official Gazette declaring the antiretroviral drug Efavirenz to be of public interest. It is the most used imported drug for AIDS treatment. Currently, 38% of people with AIDS use the drug as part of their treatment schemes. It is estimated that by the end of this year, 75,000 of the 200,000 National Health System AIDS patients will be using Efavirenz.

The declaration is the first step towards the compulsory licensing of the patent for public non-commercial use – this flexibility is provided for in article 31 of the Trade-Related Aspects of Intellectual Property Rights Agreement (TRIPS Agreement), and may be implemented in several situations provided for by the Brazilian Industrial Property Law (Law No. 9279/96).

The measure has been taken because the Merck laboratory, owner of the Efavirenz patent, did not accept a price reduction proposal that was satisfactory for Brazil, one of the world’s biggest buyers of the drug.

In November 2006, the federal government began negotiations aimed at reducing the price of the drug for this year’s contract. It was proposed that the laboratory should charge the same price as that paid by Thailand, which is US$ 0.65 per 600mg tablet, whilst Brazil pays US$ 1.59. The difference between the price of the drug charged to the two countries is 136%.

The proposal for an equal price to be charged was not accepted by the company, which in turn proposed a reduction of just 2%. The Ministry of Health considered the laboratory’s counterproposal to be unacceptable, since there has been a reduction in production costs, as recently announced by Merck itself; in addition to the existence of offers of lower prices from other producers.

Proposals by international organisms exist to purchase the generic version of Efavirenz, produced by World Health Organization (WHO) prequalified laboratories, at a cost varying between US$ 163.22 and US$ 166.36 per patient per annum. The price that Brazil currently pays for the drug is equivalent to US$ 580 per patient per annum, so that the expected cost of purchases of the drug would reach the figure of US$ 42.9 millions this year alone. These proposals therefore represent a possible reduction in expenditure in 2007 of around US$ 30 million. The estimated savings by the year 2012, when the patent expires, are expected to be US$ 236.8 million.

However, the generic version of the drug can only be purchased once the patent has been compulsorily licensed.

As such, in absolute compliance with the internationally required precepts, and with prevailing national legislation, the compulsory licensing of Efavirenz in the public interest is a legitimate and necessary measure to guarantee access to it by all those patients who are provided with it through the Ministry of Health’s National STD and AIDS Programme.

Definition – Compulsory licensing is a flexibility provided for in article
31 of the Trade-Related Aspects of Intellectual Property Rights Agreement (TRIPS Agreement). This practice is adopted by developed countries, such as Italy and Canada in relation to pharmaceutical products, as well as by developing countries. In the case of antiretroviral drugs, Mozambique, Malaysia, Indonesia and Thailand have already made use of this provision. Furthermore, Thailand recently decreed the compulsory licensing of Efavirenz.

In Brazil, compulsory licensing can implemented in the event of several circumstances provided for in the Brazilian Industrial Property Law, such as such as the abusive exercising of such rights, the abuse of economic power, absence of local production, unsatisfactory commercialization, national emergency and public interest.

Compulsory licensing based on the public interest must be granted for non-commercial use, non-exclusive production, and temporarily or, in other words, the period of its validity must be defined, although it may be extended and remain in force for as long as the public interest exists. It must be emphasized that independently of this the remuneration due to the patent’s owner remains ensured.

Further Information
Press Office – National STD and AIDS Programme
Tel.: +55 61 3448-8100 / 3448-8088
E-mail: imprensa@aids.gov.br
Portal: www.aids.gov.br

posted by James DeLong @ 9:25 AM | International, Patents

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