Right after signing the decree breaking the patent of Merck's anti-AIDS drug Efavirenz, Brazilian President Luiz Inácio Lula da Silva said that the same may happen to other medications, in the future. "Today it's being used for this medication, tomorrow it might be used for another one," threatened the president.
The compulsory licensing, as the Brazilian government calls the patent breaking, might occur every time prices are "far from the Brazilian reality…. If the prices are not fair; not only for us, but for every human being infected on this planet we will have to make this decision."
Lula was warmly applauded when he declared to a crowd of AIDS patients and employees from the Health Ministry: "It is not right that anyone gets rich with the misfortune of others."
"Not only this is something rude from the ethical point of view, but it's also a disrespect from the political-economical point of view." And he completed by saying: "Having to choose between our trade and our health, we will take care of our health… We will not give up taking care of our people and we wish to take care of our companions with AIDS."
Lula has authorized Brazil to break the patent on Efavirenz importing a generic version from India instead. It's the first time Brazil has bypassed a patent to acquire cheaper drugs for its AIDS prevention program.
Merck said it was "profoundly disappointed" after talks over the drug's price broke down. Merck had offered a 30% cut on its 1.59 per pill price. Brazil's health ministry wanted to pay what Merck charges Thailand 65 US cents per pill, another country to negate World Health Organization rules on drug patents in the name of public health.
Brazil's government offers free access to AIDS' drugs condoms and syringes, a move that has helped stabilize infection rates at around 0.6% in adults – the same level as in the United States.
"Merck is profoundly disappointed by the decision of the Government of Brazil to issue a compulsory license for Stocrin (Efavirenz), which would break Merck & Co Inc.'s patent and make it possible for Efavirenz to be produced by a generic manufacturer", said the company in an official release.
"Merck has attempted to negotiate in good faith with Brazil, but a fair offer on Stocrin has been rejected. While we remain flexible and committed to exploring a mutually acceptable agreement with the Brazilian government to help the country achieve its objective of universal access to treatment, we believe their action is not in the best interests of patients in Brazil and around the world."
Further on it states that "this expropriation of intellectual property sends a chilling signal to research-based companies about the attractiveness of undertaking risky research on diseases that affect the developing world, potentially hurting patients who may require new and innovative life-saving therapies."
Brazil will not proceed to import the generic version from three laboratories in India, certified by WHO, saving an estimated US$ 30 million annually, said Health minister José Gomes Temporão.
"We will be paying Merck 1.5% royalty on the price of the generic version imported from India".
Brazil argues its decision is protected by the 2001 Trips agreement in the framework of the World Trade Organization which enables developing countries to privilege public health over intellectual property.