Brazil patent threat takes Roche by surprise

Roche said an accord was within reach when Brazil threatened to break the patent swissinfo.ch

The Swiss pharmaceutical giant, Roche, is downplaying a threat by Brazil to break a patent on one of the company's Aids drugs. The dispute is the latest attempt by a developing country to challenge drug companies over patented Aids drugs.

The Brazilian government made the move on Wednesday, saying the medication was urgently needed by sufferers and that it did not have the funds to pay for it.

The drug, called Viracept or Nelfinavir, is a vital ingredient in the drugs cocktail which Brazil supplies to thousands of people with Aids. The compound is designed to inhibit an enzyme, which plays an essential role in the replication of HIV.

“We were extremely surprised to hear the news of this government announcement because our discussions and negotiations with the Brazilian government were ongoing and have always been on good terms,” said Roche spokeswoman, Katja Prowald.

“We have agreed with the Brazilian ministry of health a price for the supply of Viracept during 2001 at a significantly reduced price, which is more than 50 per cent lower than the US wholesale acquisition cost. This discount was very close to the government’s expectations.

“We have been continuing these discussions for the supply of Viracept during 2002 and we were close to reaching an agreement based on further additional discounts.”

Abusive pricing policies

Brazil’s health minister, Jose Serra, said on Wednesday that he would employ a clause in the country’s 1997 intellectual property law which allows patents to be broken in cases of national emergency or when companies employ abusive pricing policies.

“After six month of negotiation and after exhausting all the possibilities for an agreement with Roche Laboratories, Brazil’s Health Minister, Jose Serra, decided to break the patent on Nelfinavir, used to treat people with AIDS,” the ministry said in an official statement.

It added that Roche would “continue to supply the drug until December 2001, when the contract with the Health Ministry ends”.

The Brazilian government did indicate, though, that Roche could still make an offer which met Brazil’s needs.

The latest spat over Aids drugs pricing comes in the wake of a legal battle between big pharmaceutical companies and the South African government. The companies sued South Africa over its cheap imports of generic drugs, which the firms said violated their patents.

They eventually dropped the suit, but only after intense criticism that they were putting their profits before people’s lives.

Free Aids drugs

It’s the first time Brazil has stripped the patent on an anti-Aids medication, despite previous threats to do so. Brazil has the highest number of Aids victims in Latin America and distributes a “cocktail” of anti-Aids drugs free to sufferers. Last year, some 90,000 people received the drugs, which would have cost them up to $15,000 each.

Brazil says its drug handout programme has driven down the number of Aids deaths each year from 11,024 to 4,136 in just four years. The programme has been hailed by doctors as a model for other developing countries, where few can afford expensive treatment.

With new anti-AIDS drugs coming to market, the government said it might be necessary to employ compulsory licensing if drug companies did not move to lower costs.

Brazil spends about $88 million, or 28 percent of its $303 million anti-Aids budget, on Nelfinavir every year. About a quarter of Brazilian Aids patients use the drug.

Last week, scientists at the government’s Farmanguinhos lab said they had successfully copied Nelfinavir and were subjecting it to equivalency tests expected to last three months.

According to the Health Ministry, the government will realize a 40 percent saving by making the drug at Farmanguinhos.

by Vincent Landon