Boston Globe

23 AUGUST 2001

Brazil to break AIDS drug patent

By John Donnelly, Globe Staff

The announcement makes Brazil the first country in the developing world to say it would break international trade laws to protect the health of its citizens.

The decision, which was announced by Health Minister Jose Serra in Brasilia, came after talks collapsed with Swiss pharmaceutical giant Roche over price cuts for the drug nelfinavir. The move may encourage other countries to break patents and issue licenses for copycat anti-AIDS drugs, activists said.

''This is a crack in the dam,'' said Paul Davis of ACT UP-Philadelphia, a leader in the drive to provide greater access to medicine in the developing world. ''Brazil has served as a crowbar to put a crack in the dam of enforcing international patent agreements.''

Serra told reporters that he started the process of issuing a compulsory license to produce nelfinavir, now made by Roche and marketed as Viracept.

''The government isn't against patents, it's against the abuse of prices,'' Serra said outside Brazil's Congress. The Health Ministry and AIDS activists said it was the first time a developing country had broken a patent agreement in the battle against AIDS.

Roche offered earlier this year to cut the price of nelfinavir by 13 percent, but Brazil rejected the proposal and the two have been in negotiations ever since.

''Roche is surprised by the news because negotiations between the company and the Health Ministry have been friendly,'' the drugmaker said in a press release. ''Roche already conceded discounts close to those that the ministry is requesting and has donated medication for the treatment of children with AIDS.''

Jeff Trewhitt, spokesman for the Pharmaceutical Research and Manufacturers of America in Washington, a lobbying group that represents the largest drug makers, said last night that ''there is going to be a major concern'' over Brazil's action.

Brazil is widely regarded as having a model anti-AIDS program among developing countries, and already produces generic versions of eight drugs for AIDS cocktails. Those drugs, distributed free to people with HIV/AIDS, are not covered by patents in Brazil.

The decision yesterday is the latest of several groundbreaking actions this year aimed at providing anti-AIDS medication to some of the estimated 30 million people with HIV/AIDS in the developing world.

First, prices tumbled to a low of $350 annually per person for an AIDS cocktail, compared to a cost of more than $10,000 in the United States. Then, United Nations Secretary General Kofi Annan created a global health fund to raise $7 billion to $10 billion annually to fight AIDS, tuberculosis, and malaria. So far, slightly more than $1 billion has been pledged.

But Brazil's move is expected to meet stiff opposition from pharmaceutical companies, and they may be joined in their fight by the US trade representative's office. A spokesman for the office last night declined to comment.

In Brazil, Serra said Roche could still try to come up with an offer ''to meet our needs, but we aren't going to wait anymore. We are starting production,'' he said, adding that more than a quarter of Brazil's AIDS program budget was spent on nelfinavir alone.

The United States filed a complaint against Brazil's patent laws with the World Trade Organization earlier this year, but withdrew the complaint under pressure from world health officials and activists. When the complaint was withdrawn, the US trade representative's office said if Brazil planned to break patent laws by issuing a compulsory license, it wanted to be notified first. It was not clear last night whether Brazil had given that notice.

Under international trade law, governments can issue a compulsory license to make a patented drug when they invoke a ''national emergency'' or say it is in the health interests of their citizens.

The issue of intellectual property rights colliding with health emergencies in the developing world will be the main topic at a World Trade Organization meeting Sept. 19 in Geneva. Current world trade regulations give countries such as Brazil, India, and Uganda until 2005 to abide by patent laws or risk losing export markets for their own goods.

Brazil, which has 203,000 cases of AIDS, the most in Latin America, began producing copies of anti-AIDS drugs not under patent in 1998. Serra said yesterday that a state laboratory in Rio de Janeiro will be ready to produce nelfinavir by next February.

''If Brazil survives any challenges, it's a whole new world,'' said ACT UP's Davis. ''But if Brazil gets its skull crushed from the US trade representative, it can be very damaging.''