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Abbott Lowers Price of Antiretroviral Kaletra in Brazil; Government Drops Threat to Break Patent

July 11, 2005

Abbott Laboratories on Friday agreed to lower the price of its antiretroviral drug Kaletra in Brazil, and the Brazilian government dropped its threat to break the patent on the drug to begin producing a low-cost, generic version of the medication, Reuters reports (Khalip, Reuters, 7/8). The agreement between Abbott and Brazil's Ministry of Health will keep the government's annual expenses on Kaletra at current levels for the next six years, even though the government expects to provide the drug to as many as three times the number of patients now receiving the drug under the country's National STD/AIDS Programme (Abboud, Wall Street Journal, 7/11). However, Abbott said no per-capsule price of Kaletra is specified in the deal (Reuters, 7/8). The agreement also guarantees the Brazilian government access to a new version of Kaletra, called Meltrex, if the drug is approved by FDA (Benson, New York Times, 7/9). 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 $1.17 per pill. Outgoing Brazilian Health Minister Humberto Costa on June 24 informed Abbott of the country's 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 (Kaiser Daily HIV/AIDS Report, 7/8). The National STD/AIDS Programme provides antiretrovirals at no cost to all HIV-positive people in the country who need them. The program ignores all patents issued before 1997. The government over the past three years repeatedly has said it might break patents in order to negotiate price reductions with pharmaceutical companies (Kaiser Daily HIV/AIDS Report, 6/27).

Abbott, Brazilian Officials' Comments
Abbott spokesperson Melissa Brotz said, "We're pleased to have reached an agreement that expanded access to Kaletra for Brazilian patients and preserved our intellectual property rights, which Abbott was not willing to negotiate" (Reuters, 7/8). She added, "Throughout this process, we were mindful of the importance of the outcome of this issue, which has implications beyond our company and our industry for all innovators" (Japsen, Chicago Tribune, 7/9). Brazil's health ministry in a statement said the price reduction will save the government $18 million in 2006 and up to $259 million over the next six years. The ministry said 23,400 HIV-positive people in the country are taking Kaletra but that about 60,000 could be taking the drug in six years. The ministry statement also said Abbott will start transferring technology to make the drug at the Brazilian laboratory FarManguinhos in 2009. However, Brotz said, "Abbott will not start transferring technology in 2009. We will begin the transfer prior to 2015, which is when the patent expires, but Brazil will not be able to manufacture the drug before the patent expires" (Reuters, 7/8).

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