Brazilian Health Minister Jose Gomes Temporao on Wednesday signed a decree declaring that the country would purchase from an India-based drug maker a generic version of Merck's antiretroviral 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 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 has given Merck seven days to negotiate a lower price for the drug.
According to the AP/Forbes, if the two sides do not agree on a lower price, Brazil could break Merck's patent of the drug by issuing a compulsory license to produce or purchase a lower-cost version of the drug.
World Trade Organization regulations allow governments to declare a "national emergency" and issue compulsory licenses on any grounds without consulting the foreign patent owner.
Merck spokesperson Amy Rose said the company "does not believe compulsory licensing is in the best interest of patients," adding that Merck is committed to reaching an agreement with Brazil. Brazil and Merck in November 2006 began negotiations over Efavirenz.
According to the AP/Forbes, Brazil called on Merck to provide the drug at 65 cents per 600 mg dose -- the same price the company charges the Thai government. At the time, Brazil was paying $1.59 per dose, according to the decree.
Merck offered to reduce the price of Efavirenz in Brazil by 2%, but the country rejected the offer. About 75,000 of the 180,000 HIV-positive Brazilians who receive access to no-cost antiretrovirals from the government use Efavirenz, according to the AP/Forbes.
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.
Source: Kaiser Family Foundation