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Brazil bypasses American drug patent

Written by Jane Coyle on 12 May 2007

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Brazil has decided to buy a cheap generic version of the anti-AIDS drug Efavirenz from India rather than from the holder of the patent, the American company Merck.

Indian law allows drugs to be copied so long as the process is different from the original. It is suggested that although India can provide cheap and effective drugs, exports are conspicuously lower than they could be because poorer countries are scared of sanctions being applied by the US Government. Brazil had been offered a discounted rate of $1.10 a pill instead of the current price of $1.59, but was seeking a price of $0.65. Now they will buy from India at $0.45 a pill. There are procedures provided by the World Health Organization for taking such action under crisis conditions, to be found under the Doha Declaration, and Brazil’s decision has the backing of the Nobel Peace Prize-winning ‘Medicins Sans Frontieres’.

The view of the drugs companies is understandably different. Although Merck will receive a small royalty for each Indian drug sold, this is considerably less than otherwise. They have issued a warning that companies will be deterred from spending money on vital research and development if their returns are undermined in this way.

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