Brazil's HIV-drug talks break down

Brazil moved closer to breaking a patent on a U.S.-manufactured anti-AIDS drug after negotiations with Merck & Co. broke down Thursday.

The government last week declared Merck's efavirenz anti-retroviral drug a "public interest" medicine -- a move that effectively gave Merck, based in Whitehouse Station, N.J., seven days to negotiate lower prices with the government or have Brazil strip the patent by issuing a compulsory license.
Negotiations began in November with Brazil demanding the same price for efavirenz paid by the Thai government -- 65 cents per 600 milligram pill. Brazil at the time said it was paying US$1.59 per pill.

The United States has since placed Thailand on a list of copyright violators after the Asian country moved to break patents on three anti-AIDS drugs, including those made by Abbott Laboratories and Merck.

In Thailand's capital of Bangkok, AIDS activists rallied outside the U.S. Embassy on Thursday to protest the decision, calling the Thai government's move to break patents on pricey U.S.-made AIDS drugs a "lifesaver."

Brazilian officials turned down Merck's offer of a 30 percent discount on the drug.

''We at Merck were disappointed to have had what we consider to be a fair offer rejected by the government of Brazil,'' Merck spokeswoman Amy Rose said by phone from New Jersey. ''We remain flexible, open and committed to the negotiations.''

The matter now will be referred to President Luiz Inacio Lula da Silva's chief of staff who will decide whether to issue the compulsory license and allow Brazil to manufacture the drug or to buy generic versions while paying Merck a small royalty.

Brazilian law and rules established under the
World Trade Organization allow for compulsory licenses in a health emergency or if the pharmaceutical industry uses abusive pricing.

Efavirenz is the drug most widely used by Brazil's anti-AIDS program, which provides free medication for anyone who needs it.

Currently, 75,000 of the 180,000 Brazilians who receive the free cocktail of anti-AIDS drug use efavirenz.

Brazil has repeatedly managed to win price reductions in recent years from big pharmaceutical companies by threatening to break patents, but has never actually done so.

In 2005, Brazil threatened to break the patent on Kaletra, an anti-AIDS drug produced by Abbott Laboratories, but later reached an agreement. (Michael Astor, AP)