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International News

New Brazilian Health Minister Says "No Deal" Reached With Abbott on Price Reduction for Antiretroviral Kaletra

July 15, 2005

New Brazilian Health Minister Jose Saraiva Felipe on Thursday said that no agreement has been reached with Abbott Laboratories in negotiations to lower the price of the pharmaceutical company's antiretroviral drug Kaletra in the country, the AP/Yahoo! News reports. "When I took office, I saw that no deal had been sanctioned," Felipe, who replaced Humberto Costa as health minister on July 8, said in an interview in Thursday's Correio Brazilense newspaper, adding, "There was no document signed by the government. I thought that the question was closed, and I saw it was still open" (AP/Yahoo! News, 7/14). Brazil's Ministry of Health and Abbott on July 8 said they had reached an agreement for Abbott to keep the government's annual expenses on Kaletra at current levels for the next six years and that Brazil would not break Abbott's patent to produce a generic equivalent of the drug. The Brazilian government last month announced that it would break Abbott's patent on Kaletra unless the company lowered the drug's price 42% to 68 cents per pill from its current price of $1.17 per pill. Costa on June 24 informed Abbott of the ultimatum regarding Kaletra, saying that under the World Trade Organization's intellectual property agreement, governments can approve the domestic production of generic versions of patented drugs during emergency public health situations if they fail to reach an agreement with the patent holder. When the price reduction agreement was announced earlier this month, Brazil's health ministry in a statement said 23,400 HIV-positive people in the country are taking Kaletra under its National STD/AIDS Programme but that about 60,000 could be taking the drug in six years, which would save the government $18 million in 2006 and up to $259 million over the next six years (Kaiser Daily HIV/AIDS Report, 7/11).

Pending Issues
Felipe said Abbott's current proposal would immediately reduce Kaletra's price to 99 cents per pill, with further reductions to 72 cents per pill by 2010, a reduction he said was inadequate, according to the AP/Yahoo! News. He also said negotiations are continuing over the transfer of technology to make the drug (AP/Yahoo! News, 7/14). Abbott's patent on Kaletra expires in 2015, and Abbott spokesperson Melissa Brotz last week said that the technology transfer would be completed before the expiration (Kaiser Daily HIV/AIDS Report, 7/11). Abbott spokesperson Michelle Johnson said that company officials are continuing to meet with the Brazilian government to finalize an agreement, Dow Jones MarketWatch reports (Dow Jones MarketWatch, 7/14).

Opinion Pieces
The San Francisco Chronicle on Thursday published two opinion pieces on the situation in its "Open Forum" section. The pieces are summarized below.


  • John Iversen: "Brazil's exemplary model for fighting AIDS in the developing world is being threatened by pricing practices" of U.S.-based pharmaceutical companies Merck, Abbott and Gilead, Iversen, co-founder of ACT UP/East Bay and the Berkeley Needle-Exchange Emergency Distribution, writes in a Chronicle opinion piece. The companies should "set examples of corporate responsibility" by issuing voluntary licenses to allow Brazil to produce inexpensive generic versions of their antiretrovirals, Iversen says, adding, "Such precedents must be taken by the most profitable industry in world history, in the richest country in world history to treat one of the deadliest epidemics in world history." Iversen concludes, "Because the drug companies refuse to sell high volumes of AIDS treatments at low prices, they should get out of the way so that generic companies can do so" (Iversen, San Francisco Chronicle, 7/14).

  • Robert Shapiro: Brazil's threat to break Abbott's patent on Kaletra is "nothing short of industrial blackmail," Shapiro, who served as undersecretary of Commerce in the Clinton administration and is chair of the economic advisory firm Sonecon, LLC, writes in a Chronicle opinion piece. The threat also is not the "desperate act of an impoverished nation struggling to contain an epidemic," Shapiro writes, adding that the country has a gross domestic product of about $500 billion and one of the "most advanced" industrial sectors in Latin America. "Intellectual property rights are not a form of foreign aid," Shapiro writes, concluding, "[T]hey are the animating force of productivity and growth. The United States cannot allow other countries to illegally siphon the lifeblood of American prosperity" (Shapiro, San Francisco Chronicle, 7/14).

Back to other news for July 15, 2005

Reprinted with permission from You can view the entire Kaiser Daily HIV/AIDS Report, search the archives, or sign up for email delivery at The Kaiser Daily HIV/AIDS Report is published for, a free service of the Kaiser Family Foundation, by The Advisory Board Company. © 2004 by The Advisory Board Company and Kaiser Family Foundation. All rights reserved.

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This article was provided by Henry J. Kaiser Family Foundation. It is a part of the publication Kaiser Daily HIV/AIDS Report. Visit the Kaiser Family Foundation's website to find out more about their activities, publications and services.
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