E-DRUG: Roche response to Brazil CL
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[crossposted from Pharm-Policy with thanks.
Copied as fair use. NN]
http://biz.yahoo.com/rf/010823/l2389015.html
Thursday August 23, 8:18 am Eastern Time
Roche says near Brazil accord on AIDS drug price
By Michael Shields
ZURICH, Aug 23 (Reuters) - Swiss healthcare group Roche Holding AG
sought to head off a fresh debate over the pricing of AIDS drugs in
the
developing world by insisting on Thursday it was close to a cut-price
deal with Brazil.
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Stunned by Brazil's threat to break a patent on a drug Roche sells
there
and to make the medicine in a state factory at a fraction of the cost,
Roche said an accord was within reach to cut its discounted Brazil
price
for Viracept even more in 2002.
``We were extremely surprised to hear the news ... because we have
been
in a long-standing relationship with the Brazilian government, which
has
been particularly committed to active programmes to handle AIDS in
Brazil,'' a Roche spokesman said.
Roche now sells Viracept, whose patent is held by U.S. firm Pfizer Inc
(NYSE:PFE - news), at less than half the U.S. wholesale price in
Brazil
and has offered a steeper discount in 2002, he said.
``We are very close to reaching an agreement which is based upon a
further, additional discount,'' spokesman Daniel Piller said. He said
Basel-based Roche also intended to start manufacturing Viracept
tablets
in Brazil next year.
The company will also continue to provide Viracept syrup free of
charge
to Brazilian children with AIDS.
The spat over AIDS drug pricing resurrects a dispute that grabbed
headlines when big pharmaceutical companies sued South Africa over its
cheap imports of generic AIDS drugs that the firms said violated their
patents.
The companies eventually dropped the suit, but only after facing
intense
criticism that they were putting their profits before people's lives.
The issue remains alive in emerging markets around the world
struggling
to cope with the AIDS epidemic.
AIDS PATENT BROKEN?
Brazil's health minister, Jose Serra, said on Wednesday he had started
the process of issuing a compulsory licence to make nelfinavir, the
drug
marketed as Viracept, at a Brazilian factory after failing to wring
sufficient price concessions from Roche.
Under Brazilian law the government can issue a compulsory licence to
make a patented drug when a ``national emergency'' is invoked.
If the plan proceeds, it may be the first patent violation of an AIDS
drug in the world and make the medicine available at lower prices in
Brazil early next year. Brazil has the highest number of AIDS patients
in Latin America with 203,000 cases.
The Brazilian dispute could eventually spread to include U.S.
officials,
who filed a complaint against Brazil's patent law with the World Trade
Organisation earlier this year but then withdrew it under pressure
from
world leaders and health organisations who praise Brazil's aggressive
response to AIDS.
``We understand that any decision to declare a compulsory licence
requires the communication of this decision to the U.S. Trade
Representative. This was something which was agreed between the
Brazilian and U.S. governments in July 2001 and that is also a reason
why we were surprised,'' Piller said.
Roche's non-voting certificates, its most widely traded form of
equity,
shrugged off the news. They were down 0.2 percent to 121,75 Swiss
francs
by 1130 GMT, outperforming the blue-chip Swiss Market Index.
ISSUE IS IMAGE
Financial analysts said the dispute was of more concern to Roche as a
public relations issue rather than a financial one. Roche's overall
sales of Viracept rose five percent in the first half of this year to
221 million Swiss francs ($132.6 million).
``It should not have a huge impact on the sales of the drug,'' said
Denise Anderson at Bank Julius Baer in Zurich. She is less concerned
about the impact of the AIDS pricing debate on Roche and overall the
drugs sector than are some other analysts. Some fear the pricing issue
could have a knock-on effect in developed countries as patients and
health activists question how much they have to pay to get life-saving
treatment. ``But our feeling is people in the western countries are
not
going to let it go so far that they don't have drugs, and that is what
it would mean,'' Anderson said.
She thought it was wise of big pharmaceuticals groups that make AIDS
drugs like GlaxoSmithKline Plc (quote from Yahoo! UK & Ireland:
GSK.L),
Merck and Co Inc (NYSE:MRK - news), Bristol-Myers Squibb (NYSE:BMY -
news), Roche and Boehringer Ingelheim to have dropped their suit
against
South Africa.
``Now the public relations will probably be on their side. Now the
(developing) countries will have to own up to the fact that they don't
have the distribution systems in place to get even really cheap drugs
out to the people who really need them.''
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