RIO DE JANEIRO, Brazil, March 7 (Reuters) - U.S. drugmaker
Merck and Co Inc. said on Wednesday that it is not yet
extending to Brazil the deep discounts on two AIDS drugs that
it announced earlier for countries in sub-Saharan Africa.
Merck said it would offer the drugs at no profit to "developing
countries," fueling hopes that the discounts would be extended
to Brazil, which plans to violate Merck's patent and start
producing at least one of those drugs by June if the price does
not come down.
"Those prices that were released today are not applicable to
Brazil as they are not (applicable) to quite a few other
countries," said Marcos Levy, director of corporate affairs at
Merck's Brazil unit. He said they are being extended to some,
but not necessarily all, countries in sub-Saharan Africa.
"We are in the process of trying to negotiate a price with the
government of Brazil that would be good for them and good for
us," he said, adding that Merck hoped to announce the new price
by the beginning of next week.
Brazil, with a controversial law allowing it to manufacture
AIDS drugs under certain conditions, has made it a model in the
global AIDS fight, but has also earned it the ire of the
pharmaceutical industry which is trying to punish Brazil at the
World Trade Organization (WTO).
Merck said for sub-Saharan Africa, it will cut the price of
Crixivan to $600 per patient per year -- the first protease
inhibitor to be offered at such deep discounts -- while Stocrin
will be offered at $500.
After meeting with Merck representatives in Brasilia, the
director of the state-owned Brazilian laboratory producing AIDS
drugs said she urged the company to extend the same prices to
Latin America's largest country.
"The price is fantastic, it's half of what we pay for generics
from India," said Eloan dos Santos Pinheiro. "If we could get
that price there would be no need to produce the drugs here."
PATENTS AT RISK
After months of stalled negotiations, Brazil threatened to
start producing the generic version of Stocrin, known as
Efavirenz, and another drug in June if pharmaceutical companies
don't drop prices.
Brazil would be allowed to violate the patents under a local
law that requires foreign firms to manufacture drugs -- or any
other patented product -- withing Brazil or lose exclusive
rights to a local competitor after three years.
Still, Levy warned that Brazil will not likely see the same
discount as sub-Saharan Africa. "You have countries that have
no resources at all and countries that have some appreciable
degree of resources. Brazil is in the category of countries
that have some very appreciable resources," he said.
In absolute numbers, Brazil suffers from a high rate of AIDS
infection with 190,000 cases of registered HIV cases, and
500,000 suspected cases. But it has become a model in the AIDS
fight with only 0.6 percent of the adult population infected.
In sub-Saharan Africa, 25.3 million people are living with
HIV-AIDS, according to the United Nations and in Botswana, 35.8
percent of the population is infected.
Merck's decision comes as the pharmaceutical industry is
embroiled in a fierce battle with the government of South
Africa over access to cheap drugs, but could also be a result
of pressure from Indian generics and threats from countries
like Brazil to violate patents.
Starting in 1996, Brazil's government started making drugs to
treat AIDS as part of its policy of free treatment for all
patients. Brazil now legally makes eight of the 12 drugs used
in the so-called AIDS cocktail.
As a result, AIDS drug prices have plummeted more than 70
percent, but prices on those like Efavirenz that do not face
competition from locally produced versions have remained high.
A typical treatment in Brazil costs about $4,400 compared to
between $12,000 and $15,000 in the United States.
But as Brazil stepped up pressure on remaining drugs, the
United States submitted a request to the WTO to set up a
dispute panel to examine charges that Brazil's patent law
discriminates against imports.