Brazil Presses AIDS Drug Makers to Cut Prices

Brazil's president issues a license allowing the country to purchase a generic version of an AIDS drug, despite a U.S. company's patent. Thailand has taken similar steps. Both countries say they're simply taking advantage of the legal options available to them. The drug companies say their intellectual property rights are being violated.

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STEVE INSKEEP, host:

Now, the World Bank focuses on the developing world and one huge factor in many developing economies is the financial and human cost of AIDS. Drug manufacturers are being pressured again to reduce the price of anti-AIDS drugs. And the pressure this time is coming from middle-income countries like Thailand and Brazil. They are invoking international agreements that allow countries to purchase generic copies of brand-name drugs in a health care emergency.

NPR's Brenda Wilson reports.

BRENDA WILSON: Brazil has always offered treatment to anyone with AIDS, and Thailand is making more of an effort to do so. Both say that's getting harder to do because AIDS drugs cost too much. Thailand's health minister, Dr. Mongkol Na Songkhla, says it's a life or death issue.

Dr. MONGKOL NA SONGKHLA (Health Minister, Thailand): Some very high-priced medicine that not exist for our people. We have to let our people die without any treatment.

WILSON: Both countries are dusting off tactics that were used to get medicine for people in the poorest countries, and forced the prices down by seeking generic copies of patented drugs.

Brazil's ambassador to the U.S., Antonio Patriota, says if they don't, they can't keep treating everybody for free.

Ambassador ANTONIO PATRIOTA (Brazilian Ambassador to the U.S.): There are about 200,000 that benefit from this program of free access to medicine. So the objective here is to keep the program going and ensure its sustainability over the coming years.

WILSON: But the longer a program goes on, the more treatment is likely to fill, the greater the need for new drugs, which costs more.

Mr. BILL TAUZIN (President and CEO, Pharmaceutical Research Manufacturers Association): And it's going to be worse.

WILSON: That's Bill Tauzin, the head of the Pharmaceutical Research Manufactures Association. He says companies won't produce new drugs if countries don't honor patents.

Mr. TAUZIN: This disease continues to shift, and if my companies are not incentivized to continue to spend a billion dollars per new drug to keep those new drugs coming, then this epidemic is going to get worse.

WILSON: Both Brazil and Thailand have tried to negotiate lower prices from the manufacturers. When that fails, countries have a recourse under international trade laws. Faced with a healthy emergency, they have a right to produce or buy generic drugs. That's what Thailand has now threatened to do with the AIDS drug Kaletra, which is particularly favored by developing countries because it doesn't have to be refrigerated.

Talks between Thailand and Kaletra maker Abbott Laboratories broke down last week. But when Thailand threatened to circumvent Merck's patent on one of its most effective first-line AIDS drugs, Efavirenz, Merck gave Thailand a 70 percent discount late last year. Brazil also wanted the discount. But Jeffrey Sturchio, Merck's vice-president for corporate responsibility, says Thailand and Brazil may be both middle-income countries, but there are differences.

Mr. JEFFREY STURCHIO (Vice President for Corporate Responsibility, Merck): The reasons that Brazil pays more than Thailand does has to do with our pricing policy in which we reserve the lowest prices for those countries that are poorest and hardest hit by HIV.

WILSON: Ironically, Brazil may be paying more for AIDS medicines because it's been effective in keeping rates of HIV infection relatively low. And Sturchio argues that it has the 12th largest economy in the world. Brazil's Ambassador Patriota doesn't disagree with either point.

Ambassador PATRIOTA: We are in the same category as Thailand in terms of the internationally recognized human development index. The number of patients in Brazil is similar to the one in Thailand.

WILSON: But Merck was willing to cut Brazil's prices by only 30 percent, not enough to keep Brazil from buying generics. PhRMA's Tauzin concluded that both countries are motivated more by economics than health.

Mr. TAUZIN: We're talking about a developing countries like Brazil, a developing country like Thailand that has a huge economy growing like popcorn - to say that they are going to steal patents because they don't like the effect on their health care budget, and that Americans have to put up all the costs for research and development. Now, if that's what this is all about, yeah, we're in for a fight.

WILSON: Merck and Brazil are still talking.

Brenda Wilson, NPR news.

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