Brazil Breaks Patent to Make AIDS Drug

Andy Tai writes: "In this CNN story, Brazil decides to break a patent over an AIDS drug for public benefits. Brazil will produce the drug domestically without agreements with patent holder, the Swiss pharmaceutical company Roche. Brazil's efforts to fight AIDS have been praised internationally, and it successfully prevented the US Government from bringing complaints in the WTO on behalf of the drugs industry. This may set an important example that public needs justify the disregard of patent protection." There's another article in the Boston Globe about the decision.

Comments

No pharmacudical company is an island

[SirSlud]

The points regarding that this action will discourage R&D are probably true, to the extent that this move may cause companies to reduce their R&D budgets. But what good is R&D and new drugs and technologies if only x% of the world can take advantage of developments supposedly in the name of 'humanity'?

There are countries out there that could have many, many, many more people and companies working on the same solutions, thus spreading the R&D costs across more organizations and making information and research sharing more cost effective. Unfortunately, those countries are having a tough time, in various capacities, keeping their population alive, let alone wealthy enough to invest in new companies, research facilities, etc. Of course, neo-liberalism preaches the 'more for me, less for you' mantra, so the existing companies don't really warm to the idea of more 'competition'. If they could have their way, everyone in said countries would buy their drugs, but not get well enough to spur technological development in that country. Poor people are always a companies favorite customer .. no leverage, no money management skills (when you don't have money, you don't learn how to manage it); and less education increases the likelihood that you will repeat the act that caused you to require the product in the first place somewhere down the road.

For an industry that was caught redhanded not so long ago in an industry-wide price fixing scam (yes, Roche participated), I think they have alot of nerve complaining about losing patent fees in areas where their cure could stop an epidemic of life-threatening deseises, in addition to helping set the stage for opportunities, development, research and growth in the countries that need it.

Law Or Lawlessness?

[Artagel]

How Brazil handles itself *after* its decision to go ahead and manufacture the drug will define whether Brazil is a country that stands for the rule of law or for the rule of lawlessness.

Brazil is exercising one of the undisputed powers of a sovereign -- to take what it needs. A lawful sovereign pays reasonable compensation for what it takes. Thus, in civilized countries, when land is taken to build a road, the landowner does not get to veto the road, does not get to extort an unreasonably high price for being the last piece of land needed to build the road, etc. He gets reasonable, just compensation, and such a right is guaranteed by the courts of the country.

In common law countries the "rule of necessity" is not limited to sovereigns. For example, you are permitted to tresspass in certain conditions because of necessity. A classic example is a ship docking to avoid a killer storm. That does not mean not having to pay afterwards for what you take, or what you damage, however. "Necessity" defines conditions where you can "take it and pay a reasonable amount."

Brazil had a contract with Roche to provide drug that it is going to honor. Brazil is gearing up to provide its own generic version of the drug after the contract expires because it has been unable to reach agreement with Roche as to a price at which Roche will continue providing it. Brazil is taking. If it decides to take for free, it stands as an example of lawlessness. In such a case, it should be punished heavily by international trade organizations.

If it taking because of the impending necessity, with the intent to pay an agreed amount afterward, then it really is a tempest in a teapot. "Reasonable" in this case is certainly *not* what the generic would cost on the generic market. Reasonably prices are not negotiated under the threat of imminent death -- that's why courts often settle the "take and pay" price assigned to necessity situations.

nice try, but...

[tewwetruggur]

...you have unfortunately replied to someone who works in the pharmaceutical industry.

I do wish people would stop it with the "how are they going to fund research?" crap. If you look at the big picture of drug research, and where the costs really are, you would see that a lot of it is inflated numbers caused by "economic factors" and other such nonsense. That is how a lot of universities are able to continue to do excellent pharma research. The companies are hindered for less noble reasons than academia.

Re:Example?

[cpt kangarooski]

It is difficult to discuss foreign patent systems unless you're quite familiar with them. I
hesitate to do so.

However, let's say, hypothetically, that it was the US that decided to do this, instead of
Brazil. In that case, they'd be perfectly justified in that action. It would decidedly not,
repeat NOT, be stealing. The patent holder was GRANTED that patent by the US because it was
felt that doing so would have a public benefit. But ultimately, if there is a greater public
benefit to be had in not granting, revoking, ignoring, etc. a patent, then THAT is the
appropriate course of action.

Yes, there is a danger that this sort of thing could remove incentives for the research to
be done. That has to be weighed when making the decision: would the greatest public benefit
come about by this course of action, even in the long run? Again though, the interests of
the patent holder itself are not particularly important. No one can say with certainty what
the result will be. The argument that patents are necessary is belied by the limited term of
a patent; all patent holders lose the exclusivity of the rights to their invention, it's
just a matter of time. Why? Because it is beneficial to the public that this be the case.
It's highly unlikely that an everlasting patent (and the corresponding powerful, long-lived
and dangerous monopolies that would arise) would really spur the inventor on. Or at least,
that's the decision that's been made, and has been stuck with for centuries.

Don't go around thinking that this is a bad thing. If Brazil fulfills its duty to its
people, that's the most that can be hoped for. This type of decision does not prevent
innovation, at worst (and its unknown if this will be the case) it merely slows it.

You also make the mistake of believing that there is such a thing as "Intellectual
Property." There is not. Any examination of the nature of property and the nature of
information such as ideas will reveal the truth. Brazil cannot steal what is unstealable.
And if they choose not to grant any rights to the inventor, there is no external authority
from which the inventor might gain those rights. They do not come about as a consequence of
his labors, they are a grant made by the government, at the direction of its citizens, and
for some particular public aim.

Re:Way to fucking GO!!

[Bobo the Space Chimp]

> These pharmaceutical companies are turning over
> _billions_ every year, making bucketloads of cash
> out of other people's misery.

Making bucketloads of cash ENDING other people's misery, which is more than you, or Hillary, or others are doing.

Funny how greedily searching for solutions to others' miseries, miseries that those suffering pray for a solution to, solves those problems all the while people stand on rocks pontificating how evil that process is. Yet when you look in their socialist bag, you don't see too much at all.

Re:Example?

[Erasmus Darwin]

"for example, it's taken for granted that people *will* work without compensation on many things, e.g. Open Source software."

Announcing the release of OpenAntiHystX 0.2b:

BECAUSE THE DRUG IS LICENSED FREE OF CHARGE, THERE IS NO WARRANTY FOR THE DRUG, TO THE EXTENT PERMITTED BY APPLICABLE LAW. EXCEPT WHEN OTHERWISE STATED IN WRITING THE COPYRIGHT HOLDERS AND/OR OTHER PARTIES PROVIDE THE DRUG "AS IS" WITHOUT WARRANTY OF ANY KIND, EITHER EXPRESSED OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. THE ENTIRE RISK AS TO THE QUALITY AND PERFORMANCE OF THE DRUG IS WITH YOU. SHOULD THE DRUG PROVE DEFECTIVE, YOU ASSUME THE COST OF ALL NECESSARY MEDICAL TREATMENT OR FUNERAL COSTS.

What's new in 0.2b:

• Removed a protein group that caused some people who're allergic to peanuts to enter anaphylactic shock, with potentially lethal consequences. Thanks to the widow of Jerry Henderson for reporting this.
• The specified manufacturing process was resulting in residual benzene being left in approximately 4% of the pills in each batch. Temporary workaround applied (testing each pill) until we can come up with a permanent fix.
• I've set up a paypal account so people can contribute to the FDA approval cost fund. It's still a long way off, but we should probably start saving up now.
• I've had several people mail me about abdominal cramps. MAKE SURE YOU'RE USING THE LATEST VERSION. The abdominal cramp issue was fixed, along with several other bugs, back in release 0.2a.
• After several round-table discussions with both RMS and the FDA, we've been able to agree that the licensing clause requiring development forks to use a substantially different name (so as to avoid consumer confusion) is acceptable within the Free Drug tenets.

2 Billion R&D == 5 Billion profit

[slashkitty]

Just take a look at their profit statement:


http://www.roche.com/home/investor/inv-finance/i nv -sales-key-figures-hy-2001.htm

They are pulling in cash hand over fist. Now, why couldn't they negotiate a lower price w/ Brazil so that wouldn't send half their budget to Roche?

Sometimes I just can't believe...

[under_score]

how fucked up the world is these days.

Come on, the fact that this had to happen is a result of the worst possible combination of MORAL decision making. The Brazilian government is making a bad decision, but it is still the best decision under the circumstances. International law and patents are important yes, but human lives are infinitely more important. Does anyone here get that?

And don't go thinking about any "long-term" crap about saving lives by maintaining corporate profits on research through patents. That's BS too. Governments have a very direct responsibility for the quality of their constituents lives. That's why we support (through taxation usually) research on environmentally friendly technologies, basic reasearch on health, etc. That is the long-term stuff.

By breaking the patent on AIDS drugs, Brazil is definately keeping their long-term interests in mind:

1. healthier population leads to more human resources
2. healthier population leads to more grateful constituents who then focus on proactive behavior rather than complaining about their govt
3. corporations learn that there are limits to how far they can push their greed - will start to strategize in a new conceptual framework and will certainly still be "successful" in creating value for shareholders
4. good example set of human lives before profits for the rest of the world - allows Brazil to have an excellent international reputation allowing their citizens more access to international facilities, governments, and other processes

This is an excellent thing to cheer

[FreeUser]

There are a few reasons this is a bad trend. Now they are using a public health problem as an excuse to void a valid international patent because they did not get the agreement they wanted. This plays very well in the press, "bad evil company would rather see people die than sell their stuff cheaper" instead of saying "country refuses to pay a fair price for drugs to save its own people"

Except that three assumptions here are inaccurate:

1) Monopolies do not yield anything remotely approaching "fair prices" without serious government intervention (e.g power companies and baby bells) and often not even then.
2) Monopolies aren't necessary for R&D expenses to be recouped, and a reasonable profit to be made.
3) You imply that the characterization of "bad evil company would rather see people die than sell their stuff cheaper" is unfair and inaccurate, when in fact the historical and contemporary evidence is rather strong to the contrary.

Software patents are bad. So are every other form of patent that grants government enforced monopolies and undermines the very free market upon which our economies depend. There are other ways to finance expensive R&D besides grantintg 20 year monopolies and allowing said monopolies to extort exhorbitant prices from dying people and leaving millions of less fortunates to die (or extorting payment from their impoverished governments).

To paraphrase another blindly pro-IP comment: This should make sick every one of you that has a Free (as in liberty) bone in their body. Ideas are not property, nor are inventions inherently something to be possessed, except as a result of arbitrary laws which have turned out to have the opposite effect as was intended, namely to slow progress rather than accelerate it, and now in the process are actively resulting in the suffering and death of millions. Frankly, I do not care if someone who thinks they have a god given right to a monopoly on an idea simply because they won the footrace to the patent office is pissed ... I imagine King George (from whome we inherited this asinine system of entitlements in the first place) was pissed when the US declared independence and you know what? That didn't make it any less right to do so.

Re:This is an excellent thing to cheer

[Harmast]

So are every other form of patent that grants government enforced monopolies and undermines the very free market upon which our economies depend. There are other ways to finance expensive R&D besides grantintg 20 year monopolies and allowing said monopolies to extort exhorbitant prices from dying people and leaving millions of less fortunates to die (or extorting payment from their impoverished governments).

Really?

I would love to hear how. Outside of the government being the only source of R&D I fail to see how it would work in the drug industry.

The standard arguement against patents is it is cheaper for me to just buy it from you than to figure out how to make it. The time to re-engineer is enough to recoup initial costs and be competitive. An inventor who does not patent does not have to open his design to the public leaving any potential competitors to complete re-engineering.

For many industries this is arguably true. Reverse engineering complex machinery (both physical and virtual) takes time and money that are often better spent on leap-frogging ahead instead of just catching up.

However, a drug is, in the end, a chemical. Once isolated and make into a medicinal form it is relatively simple to identify it. That is assuming that you need to.

You don't, however, because the chemical and lots of stuff about it are public record and would be even if there was no patent. Why? FDA testing.

The real R&D cost of drugs is not research (identifying) but development, specifically all the human and clinical testing needed. This is not a simple or short process and extends from an experimenters first idea to full scale drug tests.

FDA regs require specific notekeeping requirements in the labs while isolating and synthesizing(see any good book on technical writing for an outine, if it does not have an experimental notebook procedures appendex or it is not a good one). This process continues throughout the process.

Human trials are not just X people with the target disease. The first step is dose a healthy volunteer and take vitals and blood work after 15 minutes. Then an hour. Then a day later. Then try a new dose. Months or years of these human toxicity tests preceed double blind testing for affectiveness.

At each step the drug can fail thus wasting all money to that point.

Thus isolating the drug, which is the effort a copycat does, is the least part of drug costs. The patent is there to repay these efforts and failed ones on the way.

Does this increase costs to the public during the patent period? Of course, because, as you point out a patent is a monopoly which does not set fair prices in the market sense (markets require multiple independent sellers and buyers to set prices). However, as the market sets fair prices it also weeds out inefficient producers. In a pure market enviroment jumping through the FDA's hoops will always be economically inefficient, thus an intelligent drug company manager will let the other companies do R&D and just copy their efforts.

The problem comes when all drug companies get smart. In these case the patent makes sense because government is granting a limited legal exclusiveness to those who make the expenditures to statisfy a government requirement that is the largest part of the drug price.

If you want to get rid of drug patents I would recommend getting rid of the FDA or require the FDA to pay the costs of testing.

Re:Drugs for Profit

[GregWebb]

This is a serious post, not a troll, not flamebait but I'm still fishing out the asbestos modem.

Uncomfortable a truth as this is, it only highlights the fundamental problem of capitalist research. When (a category of) research into improving the human situation is only carried out by capitalist organisations, that research is inevitably going to be targetted around the needs of those most able to pay for the end result. Who, let's be honest, aren't going to be the greatest possible recipients of research to improve the human situation.

Now, AIDS research is very important. Partly due to the massive third world AIDS pandemic (except, oops, they can't afford the drugs...) and partly due to generic research intro retrovirii. But think about what could happen if the money put into various other bits of research was spent on, for examples, cholera, river blindness, malaria, measles and so on. I'm not going to provide examples of possible targets for the money to come from, that's just going to get emotive.

Think about it, though. If medical research was primarily (or entirely) funded by society as a whole as opposed to by the proceeds of research then, in theory, we wouldn't have this problem. While it remains a part of a capitalist system it is inevitable.

I'm not a communist (Honest! Capitalism has its uses and the people have a right to choose!) but it's difficult to escape the conclusion that this sort of case exposes the limitations of capitalism rather starkly.

Time for a REALITY CHECK and some FACTS!

[Tord]

I see loads and loads of comments here in support of the medicine company that either bashes or seriously questions Brasil's decision in this matter. I also see how their comments are given high moderation points for their insightfullness and I also see flaws in their reasoning and logic.

I therefore thinks it's time for a reality check and discuss some FACTS before we start to take sides:

1.Quite some comments says or hints that Brasil is breaking "international laws". Wake up. There is no international body declaring international laws. What Brasil is breaking is international AGREEMENTS on how to treat patents. Brasil is in their full right to break this agreement if they discover that it costs more and gives less than they anticipated. That the medicine company is crying "foul" is just to be expected, but their handling of this situation really asked for it.

2. How much of the medical research is actually financed by medical corporations that rely on patents for their income? I have no real statistics, but I remember reading that here in Sweden around half of the funding of cancer research is financed by "Cancerfonden" that gathers donations (from government, companies and individuals) for cancer research. Add to that all funding done by institutions as universities and hospitals and you find that commercial medical research is in the minority. Remember, this is in Sweden where we have an unproportionally big medicine industry compared to our population.

3. Remember that patents isn't just a protection of your discovery, it also blocks your competition from inovating along the same branch! Patents both rewards and stiffles inovation from time to time. There is no proof whatsoever that the patent system has led to a higher rate of innovation in any field ever. We have just followed a logical string of thoughts and reasonings to come to the conclusion that patents do increase inovation. This reasoning is built on the assumption that we have a mostly correct perception of the world.

4. People here are commenting on how patents affect a business that they don't know anything about. Many falls into making the same kind of generalisation that we constantly have to defend ourselves against, that patents are good and drive inovation and that there would be much less inovation without it. We know that it isn't true for software development. How can you state it as a truth for another industry that also differs a lot from normal mechanical innovation without really knowing anything about that industry?

5. Doesn't the fact that we are forced to chose between peoples lives and getting money to future research that will save peoples lives tell you that something is wrong with the system? We need competition and rewards to get research in medicine, but we don't need the blocking (in both research and applying the results) that the patent system gives.

There are other ways to raise funding, encourage competition and give rewards than just applying the patent system. Isn't it time we take a look at some other possible sollutions now that we clearly can see that the patent system doesn't work as it should in the medical field?

If the system is broken, then fix it...