president Luiz Inacio Lula da Silva took steps Friday to
make an inexpensive generic version of an AIDS drug
made by Merck & Co. available in Brazil 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% discount.
license is a legal mechanism that allows a country to
manufacture or buy generic versions of patented drugs while
paying the patent holder only a small royalty.
Brazilian law and
rules established under the World Trade Organization
allow for compulsory licenses in a health emergency or if
the pharmaceutical industry uses abusive pricing.
Merck had offered
to sell the drug for $1.10 per pill, down from $1.57,
while Brazil was seeking to purchase the drug at 65 cents a
pill, the same price Thailand pays.
Earlier in the
day Amy Rose, a spokeswoman for Whitehouse Station,
N.J.-based Merck, said the company would be
''profoundly disappointed if Brazil goes ahead with a
It was the first
time Brazil has bypassed a patent.
moved to override patents on three anti-AIDS drugs,
including those made by Abbott Laboratories Inc. and Merck,
the United States placed Thailand on a list of
''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.
activists applauded the move, the U.S.-Brazil Business
Council denounced the move as a step backward.
''Just days after
Brazil was recognized for improving its enforcement of
intellectual property rights, this is a major step backward
for the country's development. Brazil is working to
attract investment in innovative industries that rely
on IP [intellectual property], and this move will
likely cause investments to go elsewhere,'' the council said
in a statement.
had threatened to bypass drug patents in the past, the
country had always reached a last-minute agreement with drug
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 the
government about $580 per patient per year.
ministry says a generic version of efavirenz would save the
government about $240 million between now and 2012,
when Merck's patent expires. (AP)