In a bid to shave burgeoning drug budgets the Brazilian government this week issued a final ultimatum to Abbott Laboratories, manufacturer of Kaletra (lopinavir/ritonavir) yesterday: either cut the price of the drug in Brazil by 50%, or we will issue a compulsory license in ten days time so that the drug can be manufactured in Brazil more cheaply.
The Brazilian government says that unless a price reduction can be achieved, the country’s free treatment programme will be spending US$170 million by 2008 on Kaletra alone. According to Datamonitor, global sales of Kaletra approached $900 million in 2004.
The Brazilian Ministry of Health has been in negotiations with Abbott, Merck and Gilead, manufacturers of lopinavir, efavirenz (Sustiva) and tenofovir (Viread) respectively to reduce drug prices, since the three drugs consume two-thirds of the country’s antiretroviral drug budget. According to a Ministry of Health press release, Abbott was the only company to oppose the alternative options of price reduction or voluntary compulsory licensing.
Abbott says that it has already reduced the price of the drug in Brazil by 25% since 2002, and that the country enjoys a cheaper price than any other market outside sub-Saharan Africa. It challenges the Brazilian Ministry of Health's view that there is a `public interest` justification for over-riding Abbott’s patent rights.
A 2003 World Trade Organisation agreement gave developing world countries the right to issue compulsory licenses for drugs to treat HIV, TB and malaria if a public health crisis was deemed to exist.
"A compulsory license is not in the best interest of Brazilian patients because it puts the government's desire to cut health-care spending ahead of patients' need for new and better treatments," Abbott said in a statement. "The discovery and development of innovative new treatments depends on the reasonable return on investment for existing treatments."
The Brazilian Health Minister, Humberto Costa, said yesterday that he expected a compulsory license would save Brazil around $50 million a year.
Brazil expects to spend $393 million on antiretrovirals in 2005 to treat around 170,000 patients, rising to $520 million in 2008, when 215,000 people will need treatment. Brazil is estimated to have a total of 600,000 HIV-infected citizens.