Brazil, Abbott Close to Deal To Lower Price on Antiretroviral Drug Kaletra

Brazil on Tuesday said it has almost reached an agreement with Abbott Laboratories that would lower the price of the company's antiretroviral drug Kaletra and Brazilian manufacturers would not break the drug's patent and domestically produce a generic version of the drug, the New York Times reports. Final terms of the agreement could be agreed to by Thursday and take effect in March, Brazilian Health Minister Jose Saraiva Felipe said (Prada, New York Times, 10/5). Under the proposed agreement, Abbott would lower the price of each Kaletra pill to 63 cents from $1.17, which the Brazilian Health Ministry said would save the government $339 million over six years (Jelmayer, Dow Jones, 10/4). The government said Abbott also has agreed to donate $3 million worth of other pharmaceuticals to Brazil (New York Times, 10/5). Abbott neither confirms, nor denies the details of the agreement publicized by the Brazilian government, Brian Kyhos, the company's director of public affairs, said (Dow Jones Commodities Service, 10/4). In July, Brazil's health ministry and Abbott said they had reached an agreement for Abbott to keep the government's annual expenses on Kaletra at current levels for the next six years and that Brazil would not break Abbott's patent. However, less than a week after the agreement was announced, Felipe dismissed the agreement and said the country would continue to negotiate for a lower price or manufacturers would break its patent and produce the drug for 41 cents per pill (Kaiser Daily HIV/AIDS Report, 8/26).

Editorial
"Circumventing the patent ... would have a very limited impact on the overall cost of treating HIV/AIDS" in Brazil because drugs account for only one-quarter of the total cost, Alec Van Gelder, a research fellow at the International Policy Network in London, writes in a Wall Street Journal opinion piece. Although new antiretroviral drugs are needed because HIV quickly develops resistance to existing therapies, pharmaceutical companies will not have economic incentive to develop new drugs if they are "unable to reap some profits on new ARVs in countries outside Africa," Van Gelder says. Countries claiming to promote international development by circumventing patent laws and increasing access to ARVs are, in fact, "directly harm[ing] development by weakening the ability of entrepreneurs to profit from their investments," Van Gelder writes. "The tide will turn in the battle against the global AIDS pandemic and other diseases of poverty only when the poor enjoy the fruits of sustainable economic development," Van Gelder says, adding, "But for that development to take place, the poor must be empowered through private property rights, free trade and equality before the law" (Van Gelder, Wall Street Journal, 10/5).