E-DRUG: Brazil declares Efavirenz to be of public interest
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[This message illustrates many of the very important steps in the process of determining the need for a compulsory license and implementing TRIPS flexibilities. BS }
25.04.2007 - Press Office National STD and AIDS Programme
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 worlds biggest buyers of the drug.
In November 2006, the federal government began negotiations aimed at reducing
the price of the drug for this years 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 laboratorys 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
Healths 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 patents
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
gabriela@abiaids.org.br