Foreign Drugmakers Sidelined in Brazil ARV Production Drive

Brazil's government has reportedly allowed a three-day extension to negotiations for voluntary licensing of the HIV/AIDS drugs Tenofovir, Efavirenz and the Lopinavir/Ritonavir combination therapy. If further talks with Abbott Laboratories, Merck & Co. and Gilead Sciences fail, the Brazilian authorities are likely to compulsorily license the drugs.

Local media reports have claimed that one of the three drugmakers has opted to allow voluntary licensing on condition of payment of royalties, while another opposes it and one has asked for more time to continue discussions. The reports do not indicate which companies have chosen each course of action, although all three will be aware of the likely implications of the government's long-stated pledges to break international patents on antiretroviral (ARV) drugs to support its free-of-charge BRL900mn (US$327.01mn) treatment programme for the disease.

Meanwhile, Brazil is pressing ahead with production of raw materials for ARVs scheduled to come off patent this year, which include AZT, D4T and 3TC. The materials are currently imported for domestic production, and the government now also claims that it has acquired the technology to produce active principles for the three patented drugs under threat of compulsory licensing. Assuming the government succeeds with its plans, production of all 16 drugs used in the treatment programme will be under the control of domestic companies.

Officials have indicated that the plans will better protect Brazil from price fluctuations on drug raw material imports, although the country's state-owned and private drugmakers are likely to benefit even more from the ability to avoid inconvenient international patent regulations.