Brazil to Ignore Patent on AIDS Drug

Declaring an AIDS "national emergency," the Brazilian government announced Wednesday that it will activate a law allowing domestic production of a cheaper, generic version of nelfinavir, an AIDS drug. Health Minister Joe Serra, speaking by telephone from the capital Brasilia, said the government made the decision after price negotiations with nelfinavir manufacturer Hoffman-La Roche broke down.

Although India, South Africa and other nations are also developing generic AIDS drugs, Brazil is emerging as the world leader in breaking down what Serra called "the AIDS monopolies" held by large, foreign pharmaceutical companies. By producing a generic version of nelfinavir, a key ingredient in the AIDS cocktail, Serra said the $88 million the government spends on importing the drug would be cut in half. "We will pay [the companies] some royalties, but we must insist that lives come before profits," he said. "On that, there can be no compromise."

Last February, the United States claimed Brazil was in violation of World Trade Organization (WTO) patent laws. Washington's complaint centered mainly on a controversial Brazilian law that allowed Brazil to produce generics if companies do not begin producing their drugs in Brazil within three years of patent. The United States later withdrew the claim under heavy international criticism.

The action announced on Wednesday is being taken under different legislation that allows domestic production of internationally patented drugs during national emergencies. The United States has not taken issue with that Brazilian law. "We have not consulted with the United States on this, but we believe their past position indicates to us they will not now be against our decision," Serra said. A US official said Brazil's decision would have to be studied before official comment would be issued.

Observers, however, said the decision might be a ploy to bring Hoffman-La Roche back to the negotiating table to consider further price cuts. A previous Hoffman-La Roche offer to discount nelfinavir by 13 percent was dismissed by one Brazilian official as "price gouging with lives at stake." La Roche officials could not be reached for comment. Brazil has the largest number of AIDS patients in Latin America. Its AIDS program, considered one of the most progressive in the world, distributes drugs to patients free of charge.

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