NEW BRAZILIAN HEALTH MINISTER REOPENS KALETRA CONTROVERSY

In a dramatic reversal, new Brazilian Health Minister Saraiva Felipe has said that no agreement has been signed with US drugmaker Abbott over its HIV/AIDS drug Kaletra, and that negotiations would continue. According to local reports, Felipe claims to have had "no idea" that "the question was not closed" when he took office.

When the new Minister took office on July 8, it appeared that a deal had been agreed. However, Felipe denies that any accord has been signed, and fresh negotiations could last another week. Under the proposal agreed last week, Abbott is understood to have pledged to reduce prices for Kaletra to US$0.99 per pill with the price falling to US$0.72 per pill by 2010, a reduction now apparently thought insufficient by the Health Ministry.

On 24 June, former Health Minister Humberto Costa gave Abbott 10 days to deepen discounts or face compulsory licensing. WHO rules allow compulsory licensing during a public health emergency. Felipe has reportedly now not ruled out taking similar action unless a settlement is reached. Meanwhile, local NGOs also allege that Abbott recently unilaterally terminated a local donated ARVs programme.

The dispute originally arose from the Brazilian government's threats to break patents on Kaletra, which is used in the country's free HIV/AIDS treatment programme. The authorities had threatened compulsory licensing if Abbott failed to reduces prices from US$1.17 to US$0.68 per dose. Currently, Kaletra costs the Brazilian government US$107mn per year. A proposed generic version of the drug -- to be manufactured by a state-owned drugmaker -- would have reduced annual government expenditure on the drug to US$54mn.