Brazil invokes compulsory license for AIDS drug

Here is a news item of interest to Indian pharma companies

President Lula issued a "compulsory license" on 4 may 2007 that would bypass Merck's patent on the AIDS drug efavirenz, a day after the Brazilian government rejected Merck's offer to sell the drug at a 30 percent discount, or $1.10 per pill, down from $1.57.

The country was seeking to purchase the drug at 65 cents a pill, the same price Thailand pays.
It was the first time Brazil has bypassed a patent, but Lula da Silva said Brazil would consider doing so again on any drug sold at unfair prices. "Between our business and our health, we are going to take care of our health," he said after signing the decree.

After Thailand moved to override patents on three anti-AIDS drugs, including those made by Abbott Laboratories and Merck, the United States placed Thailand on a list of copyright violators.

Brazil had threatened several times to bypass drug patents, but the country had always reached a last-minute agreement with drug manufacturers.

Brazil provides free AIDS drugs to anyone who needs them and manufactures generic versions of several drugs that were in production before Brazil enacted an intellectual property law in 1997 to join the WTO.
But as newer drugs have emerged, costs ballooned and health officials warned that without deep discounts, they would be forced to issue compulsory licenses.

Efavirenz is used by 75,000 of the 180,000 Brazilians who receive free AIDS drugs from the government. The drug currently costs the government about $580 per patient per year.
The Health Ministry says that a generic version of efavirenz would save the government some $240 million between now and 2012, when Merck's patent expires.