Brazilian Health Ministry Rejects Merck’s Offer To Sell Antiretroviral at Discounted Price; Government To Decide About Compulsory License

Officials from the Brazilian Ministry of Health have rejected Merck's offer to sell its antiretroviral Efavirenz at a 30% discount in the country, an unnamed spokesperson with the ministry said on Thursday, the AP/Forbes reports (Astor, AP/Forbes, 5/3). Health Minister Jose Gomes Temporao last week signed a decree declaring that the country would purchase from an India-based drug maker a generic version of Efavirenz if the company does not offer the drug at a lower price. According to the decree, Efavirenz is a "public interest" medicine. Temporao at a news conference last week said the country did not issue the decree "as a threat, nor to lower the price of other medicines, but to guarantee its program of attending (AIDS) patients." Brazil gave Merck seven days to negotiate a lower price for the drug (Kaiser Daily HIV/AIDS Report, 4/26). According to Reuters, Brazil asked Merck to reduce the cost of Efavirenz to 65 cents per dose from $1.57 per dose. An unnamed source said that Merck offered to sell the drug for $1.10 per patient daily, but Brazil rejected the offer. Merck sells Efavirenz for $1.80 per daily dose in most middle-income countries, Reuters reports.

Temporao on Thursday said that Merck's offer is "insufficient" and that he expects a new proposal from Merck "at any moment." He added that the decision to issue a compulsory license to produce or purchase a lower-cost version of the drug is "now being analyzed" by Brazilian President Luiz Inacio Lula da Silva. Silva is expected to announce the decision on Friday, Reuters reports (Nery, Reuters, 5/3). World Trade Organization regulations allow governments to declare a "national emergency" and issue compulsory licenses on any grounds without consulting the foreign patent owner (Kaiser Daily HIV/AIDS Report, 4/26). The health ministry has said issuing a compulsory license would save the country $30 million annually (Reuters, 5/3).

Merck spokesperson Amy Rose confirmed that Brazil has rejected the 30% discount offer. According to Rose, the company is "disappointed to have had" what it considers to be a "fair offer rejected by the government of Brazil." She added that Merck has "requested a face-to-face meeting where" the company could "explore a mutually acceptable agreement" and that it "remain[s] flexible, open and committed to the negotiations." The government news agency Radiobras on Thursday reported that a government laboratory could produce Efavirenz for 40% less than Merck's offer on a large scale by the end of 2007, the AP/Forbes reports (AP/Forbes, 5/3). About 75,000 of the 180,000 HIV-positive Brazilians who receive access to no-cost antiretrovirals from the government use Efavirenz. Brazil in 2005 reached an agreement with Abbott Laboratories over the price of its antiretroviral Kaletra after the country said it would break the drug's patent if its price were not lowered (Kaiser Daily HIV/AIDS Report, 4/26).