Patent Baristas

Brazil has threatened to break a patent for Kaletra, one of three anti-retrovirals made by Abbott Laboratories Inc. Brazil said the price of Abbott’s combination Lopinavir and Ritonavir pill is so high it created a public health threat. Brazil is encouraging other countries to use the World Trade Organization‘s rules on patents to challenge pharmaceutical giants in their pricing policy on AIDS drugs

The threat is credible and appears to be legal under the World Trade Organization’s Doha Declaration (an amendment to the WTO’s TRIPS agreement on trade-related intellectual property rights).

The Doha Declaration on the TRIPS Agreement and Public Health, adopted by the WTO Ministerial Conference in November 2001, affirms that the TRIPS Agreement should be interpreted and implemented so as to protect public health and promote access to medicines for all. The Declaration gives the right of WTO Members to make full use of the safeguard provisions of the TRIPS Agreement to protect public health and enhance access to medicines.

The WTO Declaration explicitly states that “intellectual property protection is important for the development of new medicines” and member countries made an unequivocal point of “reiterating our commitment to the TRIPS Agreement.” Furthermore, the WTO members agreed to address the HIV/AIDS pandemic while “maintaining our commitments in the TRIPS Agreement.” Article 31 (f) of the TRIPS Agreement stipulates that a compulsory license must be issued predominantly for the supply of the domestic market of the Member granting the license. Anti-retroviral virus treatment for HIV was the main impetus for this initiative.

Health Minister Humberto Costa said his country’s actions were not primarily intended to set an example but to save the government millions on health costs. Oh, is that right? So the drug is available and Brazil could pay for it — they would just like to choose not to do so. This isn’t really a public health threat, only a government that would like to get out of paying for healthcare for its citizens. I wish I could choose my own payments for my bills.

In recent years, Brazil has repeatedly managed to get price reductions on drugs from big pharmaceutical makers by threatening to break patents. Brazil now says it would save US$54 million (euro44.4 million) annually by creating a generic equivalent of the pill.

Brazil is also in negotiations with two other makers of AIDS drugs, Merck & Co. and Gilead Sciences Inc. Brazil is seeking permission from the two companies either to produce generic equivalents or buy the drugs at discounted prices.

Abbott’s combination Lopinavir and Ritonavir pill, Merck’s Efavirenz and Gilead’s Tenofavir are essential to Brazil’s AIDS program, Costa said. The drugs would cost Brazil US$169 million (euro140 million) this year, or 67 percent of its annual budget for imported AIDS drugs. Not taken into account is that Abbott is already supplying drugs to Brazil at a loss.

On its face, this seems like a good outcome for people to access to cheap or free medicines. However, nothing in life is ever free and trying to kill the goose that laid the golden eggs will only bring short-term gain with long-term pain.

Pharmaceutical companies rely on government-granted patents to protect their huge investments in researching and developing new drugs. It takes 10-15 years and costs $800 million on average to bring a new medicine to market. If some countries try to break patents to get out of paying, guess who’s going to foot the bill?

Without patents to protect all the inventions necessary to develop a drug for a limited time, others could simply copy the drugs immediately, offering their versions at a reduced price since they did not incur the high costs to develop the drug. This would seriously impact the pharmaceutical companies’ ability to recoup their costs and reinvest in other research projects.

Brazil already legally makes copycat versions of several AIDS drugs, and has successfully forced international pharmaceutical companies to lower prices in the past by threatening to break patents. And for a country so concerns for it’s citizens health, Brazil doesn’t seem to mind adding a 9.6% import tariff for completed medicines and essential medical products. Apparently, it’s not a public health threat unless the government is footing the bill.

Granted, it’s the right of any nation to raise revenue but don’t try to cloak yourself in some type of do-gooder image when you’re really out to just save a buck. While the leaders of these countries are happy to lobby for more aid and demand that pharmaceutical companies offer their drugs at cost, they routinely tax medicines until they are unaffordable for the poor. These domestic taxes and tariffs directly prevent millions of their own citizens from receiving treatment.

Attacking patents and keeping high import tariffs only serves to hurt the sickest and poorest citizens in already poor nations. Let’s hope that the Brazilian government understands that it must pay it’s fair share.