Brazil today is expected to issue a decree that authorizes the importation of generic versions of patented antiretroviral drugs, after failing to come to come to an agreement with pharmaceutical companies over price reductions, the Wall Street Journal reports (Jordan, Wall Street Journal, 9/5). Brazil has been negotiating with Abbott Laboratories, Merck and Roche in order to obtain a 40% reduction in the price of three antiretroviral drugs. However, the government so far has succeeded in obtaining only a 6.7% reduction in current prices, according to a Ministry of Health release (Ministry of Health release, 9/5). Brazil's National STD/AIDS Programme is rooted in the local manufacture and free distribution of generic antiretroviral drugs, and the country produces seven of the 14 drugs it distributes. The cost of three of the patented drugs that the country does not produce -- lopinavir, made by Abbot; nelfinavir, produced by Roche; and efavirenz, made by Merck -- represents 63% of Brazil's $200 million annual budget for antiretroviral drugs and threatens its free drug policy, health officials say (Wall Street Journal, 9/5). Although the companies have said that they already offer Brazil reduced prices on the drugs, the government says that they can produce or obtain the drugs at a much lower cost (Kaiser Daily HIV/AIDS Report, 8/29). The decree, signed by President Luiz Inacio Lula da Silva, enables the country to import generic medicines that Brazil does not produce itself (Wall Street Journal, 9/5). The decree does not rule out continued negotiations with the three companies, according to the health ministry release (Ministry of Health release, 9/5).

Impact on WTO Agreement
Critics of the move said that the decree could "reopen an extremely sensitive issue" resolved last week in a World Trade Organization agreement allowing developing countries without drug industries to import generic versions of patented medicines from countries that produce the generic drugs, the Journal reports (Wall Street Journal, 9/5). WTO talks on generic drug access for poor nations had been stalled since Dec. 31, 2002, when members missed a deadline to reach an agreement. However, negotiators on Saturday reached an agreement allowing countries to issue a "compulsory license" to import generic drugs if it confirms that it "has insufficient or no manufacturing capacities in the pharmaceutical sector for the product(s) in question" (Kaiser Daily HIV/AIDS Report, 9/2). The agreement is seen by many experts as a way to help countries without domestic drug manufacturing capabilities obtain much-needed medicines. However, Brazil has an active drug industry and has already reverse-engineered the three drugs in question. But the government said that it is unable to produce sufficient quantities of the drugs in time to relieve the "immediate financial burden" of their antiretroviral drug program, the Journal reports. In addition, Brazil said that the new policy does not fall under the recent WTO agreement, as it enables the country to buy drugs that it does not produce itself from countries that are not required to comply with international patent laws until 2005, such as China and India.

Reaction
Critics said that Brazil's decree could "provoke retaliation" from the United States or the pharmaceutical industry, according to the Journal. "They're playing with fire," Jon Huenemann, a former assistant U.S. trade representative who currently works for Fleishman-Hillard consulting firm, said, adding, "The sensitivities of this are obvious and we're right on the edge here." Brazil AIDS Programme Chief Alexandre Grangeiro said that although the country would prefer to negotiate, "we have to change our legislation so that we can produce (these drugs) locally or import them from countries that can sell them for a lower price." Analysts on both sides of the issue say that the new policy "take[s] advantage of a climate of flexibility sparked by" the recent WTO talks, according to the Journal. "Brazil is taking the lead again in ensuring universal access to antiretroviral drugs," Ellen 't Hoen of Doctors Without Borders said, adding, "It is showing the political will to implement WTO flexibility. This is extremely good news" (Wall Street Journal, 9/5).

A kaisernetwork.org interview with Dr. Paulo Teixeira, former director of Brazil's National STD/AIDS Programme, who is now HIV/AIDS program director for the World Health Organization, is available online. In the interview, which was conducted in June, Teixeira speaks about Brazil's prevention and treatment strategies and his work helping WHO develop an AIDS strategy.

Additional information on AIDS in Brazil is available online through kaisernetwork.org's Issue Spotlight on AIDS.

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