E-drug: NYT: Roche Reaches Accord on Drug With Brazil
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[Cross posted from Pharm-policy. Thanks. HH]
September 1, 2001
Roche Reaches Accord on Drug With Brazil
By JENNIFER L. RICH
S�O PAULO, Brazil, Aug. 31 - The Swiss drug giant Roche Holding
(news/quote) reached an agreement with Brazilian health authorities
today to cut the price of the AIDS drug Viracept by a further 40
percent, putting an end to threats by the government to break the
patent and produce the drug locally.
The new discount reduces the price of Viracept in Brazil to about
30 percent of what Roche charges in the United States.
The agreement comes as a relief to the pharmaceutical industry. If
Brazil had carried out its threat to ignore Roche's patent on
Viracept, drug companies believed, a host of other developing
countries might have followed its lead and begun manufacturing
patented drugs for AIDS and other diseases. Poor countries have
complained loudly that international drug companies charge far
more for many medicines than they can afford to pay.
Last week, Brazil's health minister, Jos� Serra, said that he had
begun the process of issuing a license to produce nelfinavir, as
Viracept is known generically, at a state- owned laboratory called
Far-Manguinhos, after saying the talks with Roche over the price of
the drug had ended in deadlock. Under Brazilian law, patents can be
broken in emergency situations when the government deems that a
manufacturer's prices are abusive.
Viracept, an AIDS drug make by Roche Holding of Switzerland, is
stacked in a hospital pharmacy in Bras�lia. Brazil pays for the drug
treatments of about 100,000 AIDS patents in the country.
The decision to declare a deadlock took Roche by surprise. The
company said last week that its current contract with the Brazilian
government did not expire until the end of the year and that it had
never left the negotiating table.
Roche's price for Viracept in Brazil was already reduced to about
half the United States price, Roche said, adding that it had plans to
begin producing the drug in Brazil as soon as next year, which
would probably have made it even cheaper.
Mr. Serra announced the new agreement at a news conference
today in Rio de Janeiro. Roche officials declined to comment on the
agreement.
Viracept is one of 12 drugs used in combinations called cocktails to
treat AIDS. In an effort to reduce AIDS-related deaths, Brazil's
health service provides the drug cocktails free to patients, at a cost
of $303 million last year for about 100,000 patients.
Patent-breaking threats by the Brazilian government last March
prompted Merck & Company (news/quote) to reduce the price of
two other AIDS drugs, indinavir and efavirenz, by around 60
percent in Brazil.
James Love, director of the Consumer Project for Technology, a
nonprofit group in Washington, said he was disappointed by Brazil's
decision not to issue what is often called a compulsory license.
Under a compulsory license, the government allows other
companies, or in Brazil's case, the government itself, to make
generic copies of brand name drugs that are protected by valid
patents. The owner of the patent is paid a small licensing fee by the
generic drug maker.
Mr. Love said that if Brazil would have issued a compulsory license
on Viracept, other developing countries with high numbers of
people suffering from AIDS might have followed.
Many developing countries have held back from issuing the
licenses, which are allowed under international law, for fear that
companies may stop doing business within their borders or that
they would suffer other business ramifications.
"These countries are being portrayed very negatively if they try to
move ahead," Mr. Love said.
Mr. Love has been working with people in developing countries like
South Africa who want governments to issue compulsory licenses
so that generic AIDS drugs can be made, which could cause the
price of the drugs to fall sharply.