BRAZILIAN CLIMBDOWN ON KALETRA LICENSING THREAT

The Brazilian government has withdrawn its threat to compulsorily licence Abbott Laboratories' Kaletra HIV/AIDS therapy, after the US firm agreed to phase in a significant price reduction. Brazil had previously threatened to break the patent unless Abbott reduced the price from US$1.17 to US$0.68 per dose.

The drugmaker countered with the offer of a five-year price freeze on the drug, which local reports claim will now include Abbott's forthcoming single daily dose formulation, to be known as Meltrex.

Health Ministry officials estimate the present cost of the drug to Brazil's free HIV/AIDS treatment programme at US$107mn per year, representing the lowest price outside Africa. However, state-owned drug firm Farmanguinhos had estimated the annual cost of a planned copy version at US$54mn.

Despite earlier official claims that Abbott's offer did not match health ministry projections for infection rates, the latest decision is a major victory for the US firm. Brazilian health minister Humberto Costa has now lost his position in a cabinet reshuffle, although it remains unclear whether the government's retreat was due to external pressure or fear of heavy international trade sanctions.

Meanwhile, industry sources have claimed that the deal will allow firms to recoup investment from research with less fear of intellectual property violations in future. Negotiations between the government and HIV/AIDS drugmakers Merck & Co and Gilead Sciences are also understood to be still ongoing.