Brazil’s deal with Abbott is challenged in courts

On 11 October, Brazil reached an agreement with Abbott Laboratories to lower the price of Kaletra, according to a report by Associated Press, although this story changed several times over the previous few months and did so again as we went to press.

Originally Brazil proposed manufacturing lopinavir/r without recognizing the paten – unless Abbott negotiated a price closer to the estimated production costs for the generic formulation. This was due to the strain on its healthcare system relating to the cost of ARV treatment and the large numbers of people requiring treatment. The Brazilian government and Abbott have been a logerheads on this issue. A deal agreed in June was undermined by a change of heath minister in Brazi a few weeks later.

Many community advocates see Brazil as one of the few countries that would be able to use the exceptions outlined in the TRIPS agreement to enable a country to manufacture patent medications due to national emergency, even though Brazil is not technically a low-income country.

In a statement, the health ministry reported that the deal would reduce the price of Kaletra to 63 cents a pill down from its current price of $1.17, saving the government $339 million over six years.

However on 1 December, as this issue of HTB went to press, less than two months after the agreement, Brazilian public prosecutors have asked a federal judge to void Abbott Laboratories patent on the Kaletra. The lawsuit, supported by seven non-governmental organisations representing AIDS patients and 40 international non-governmental organizations such as Doctors Without Borders means that this case may still not be settled.

The Brazilian governments response to HIV is considered a model AIDS programme and provides free ARV treatment currently to around 160,000 patients, cutting mortality to similar levels as Western countries. Progressive and open approaches to HIV prevention ensure that health education starts when children are in primary school, well before they are expected to be sexually active.

Comment

The new Brazilian price for Kaletra (USD 0.63) was proposed to start in March 2006 and may only last until the meltrex formulation is launched. The meltrex formulation is likely to be be priced with an 8-10% increase in Brazil. Brazilian government laboratories had committed to produce Kaletra locally for USD 0.41 if compulsory licensing was implemented.

The technology transfer discussed in earlier negotiations was dropped from the new deal. This deal will also send a signal to other companies including Gilead and Merck who are currently negotiating voluntary licensing for tenofovir and efavirenz with the Brazilian government.