Roche Reaches Accord on Drug with Brazil

Roche reached an agreement with Brazilian health authorities on Saturday to cut the price of the AIDS drug Viracept by a further 40 percent, ending threats by the government to break the patent and produce the drug locally. The new discount reduces the price of Viracept in Brazil to about 30 percent of what Roche charges in the United States. Viracept is one of 12 drugs used in cocktail combinations to treat AIDS. Last week, Brazilian Health Minister Jose Serra said that he had begun the process of issuing a license to produce nelfinavir, as Viracept is known generically, at a state-owned laboratory, after saying the price talks with Roche had ended in deadlock. Under Brazilian law, patents can be broken in emergency situations when the government deems that a manufacturer's prices are abusive. Patent-breaking threats by the Brazilian government last March prompted Merck & Co. to reduce the price of two other AIDS drugs, indinavir and efavirenz, by around 60 percent in Brazil.

In an effort to reduce AIDS-related deaths, Brazil's health service provides the drug cocktails free to patients, at a cost of $303 million last year for about 100,000 patients. James Love, director of the Consumer Project for Technology, a nonprofit group in Washington, said he was disappointed by Brazil's decision not to issue a compulsory license. A compulsory license allows other companies, or in Brazil's case, the government itself, to make generic copies of brand name drugs that are protected by valid patents. Many developing countries have held back from issuing licenses, which are allowed under international law, for fear that companies may stop doing business within their borders or that they would suffer other business ramifications. The agreement comes as a relief to the pharmaceutical industry, which had feared that if Brazil carried out its threat to ignore Roche's patent, a host of developing countries might have followed suit and begun manufacturing patented drugs for AIDS and other diseases.

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