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May 24, 2007

Would the Real Brazil Please Stand Up


Thailand has decided to “compulsory license” the AIDS drug Kaletra, made by the pharmaceutical manufacturer Abbott Laboratories. That means the country will ignore Abbott’s patent for Kaletra and buy the drug from a generic manufacturer, paying Abbott a tiny royalty on the product.

Trade agreements under the World Trade Organization give Thailand the right to compulsory license a drug for a humanitarian crisis. While there is some disagreement over whether Thailand—and Abbott, for that matter—acted appropriately in the events leading up to Thailand’s decision to compulsory license the drug last January, clearly AIDS is a health crisis in many countries, and especially Thailand.

Thailand’s primary defense for its action is that Abbott was charging too much for a lower-income developing country that has made a commitment to provide AIDS medication free of charge to the vast majority of its AIDS patients. Thailand had already broken the patent on Efavirenz, an AIDS drug made by Merck, and more recently—and more questionably—on the blood-thinner known as Plavix, made by Sanofi-Aventis.

Now Brazil has essentially said “me too,” because it wants the same price that Thailand is getting on Efavirenz. Not getting that price, Brazil decided to issue a compulsory license on Efavirenz.

Herein lies Brazil’s split personality. It’s the tenth largest economy in the world and clearly a middle-income country. According to the International Monetary Fund, Brazil has a per-person gross domestic product of $5,717 (2005), a little shy of twice the $3,136 for Thailand.

Go to Brazil’s website, and here’s what you’ll see:
Furthermore, Brazil has the largest and most diversified system of science, technology and innovation in Latin America, a result of the accrual of accomplishments in the last 50 years, which include the capacity for oil prospection in deep waters and the ability to build aircrafts. Furthermore, the country invests in space and nuclear programs, as well as in new areas currently at the border of knowledge, such as nanoscience, nanotechnology and biotechnology.
Hmmm, does that sound like a poor, struggling, backwater country that needs to steal patents? Certainly, Brazil’s per-person income would argue for a discount in patented drugs. And as far as we are aware, most of the brand name pharmaceutical manufacturers are willing to do that.

But can Brazil simultaneously claim to need some of the deepest prescription drug price discounts at the same time that it boasts of being a thriving economy with a significant technology sector?

Will the real Brazil please stand up?


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