Brazil Voids Merck Patent On AIDS Drug

JoeBackward writes "Merck has this useful anti-AIDS drug Elfavirenz, and Brazil has lots of poor people with AIDS. So, after trying really hard to get Merck to cooperate on pricing, the Brazilian government has decided to take a 'compulsory license' to the patent, and get the drug from a factory in India. This compulsory license is basically a way to take the patent by eminent domain." This move gives Brazil one more thing in common with Thailand, both of which have blocked YouTube. Thailand's compulsory licensing of Elfavirenz and Plavix has landed the country on the US's watch list for piracy.

Comments

humanity vs capitalism

[drfrog]

it s nice to see humanity win one for a change

who can really put a price on that?

Re:humanity vs capitalism

[Jarjarthejedi]

I have to agree on this one. Normally I'm against things like this because I personally feel that the more this stuff happens the less likely people are to work towards something, the whole private property issue. In this case, however, the pricing was just absurd, the company was not trying to make a slight profit by helping people (which I'm fine with) but way overcharging them. Good for Brazil.

Sure, it cost them a lot to make it. But this isn't a drug whose need is going to go away any time soon and trying to remake your investment quickly means that poor people can't buy something that can save their life. Crix whatever should've been priced in such a way so that 10-12 years down the road they began making a profit, not so that they start making profit almost immediately. I mean, what investor wouldn't invest in an AIDS drug just because they're not likely to recoup their losses within a year? We all know AIDS is going to be around for a while, cut your prices so that more people can get it.

But hey, just my opinion. Hopefully Brazil can start getting cheap crix out in their country and save some lives.

Re:humanity vs capitalism

[drfrog]

im not saying they shouldnt, but there is a difference between making a profit and gouging poor people for a drug they need

Re:humanity vs capitalism

[JeanBaptiste]

... but it took capitalism to create the formula for the drug in the first place ... without capitalism _nobody_ would get this drug. so i'd say its not humanity vs capitalism, rather humanity benefiting from capitalism, and brazil and thailand aren't helping any.

Re:humanity vs capitalism

[drfrog]

capitalism itself didnt create it

knowledge did

peopel living in the capitalist state took advantage of the fact they had that knowledge

Re:humanity vs capitalism

[rewinn]

>Where do you think the research for the next AIDS drug will come from?

Mostly funded by taxpayers, then handed over to Big Pharma, as usual.

"...the pharmaceutical industry is not especially innovative. As hard as it is to believe, only a handful of truly important drugs have been brought to market in recent years, and they were mostly based on taxpayer-funded research at academic institutions, small biotechnology companies, or the National Institutes of Health (NIH)."The Truth About the Drug Companies by Marcia Angell

Re:humanity vs capitalism

[MrNaz]

Not all moves to place fetters on the free market are the result of the hidden agendas of slavering, bloody thirsty autocrats, despite the media's attempt to make it seem so. The free market will not feed the poor, or give them medication or save their lives, as none of those activities are profitable. Ideas that save human life are the property of every human alive, and I will fight until the day I die the rights of people to unreasonably profit from or withhold those ideas from humankind. Those of you about to jump in with "but who'd pay for the research" arguments, pull your pants back up and get away from me. I've heard them all before and written on the subject many times. If our society cannot place a value on the saving of life itself, then we need to have a good, long, hard look at the belief that our society is the greatest one on Earth.

Re:humanity vs capitalism

[richie2000]

Yes, because it didn't cost anything to do all the tons and tons of research and testing (not to mention the cost of education for all the scientists) to produce the drug. Let's turn that around: Merck did not pay one single dime for the education of those scientists. The US taxpayers did. Merck did not pay one single dime for all the basic research needed to develop the drug. The US taxpayers did. Why should Merck be allowed to steal money from the US taxpayers?

Here's some basic reading for you:
http://www.nationmultimedia.com/2007/04/21/opinion /opinion_30032324.php
http://www.nybooks.com/articles/17244
http://archive.salon.com/tech/htww/2006/01/13/drug _patents/index.html
http://www.cepr.net/index.php?option=com_content&t ask=view&id=1065&Itemid=8

Re:humanity vs capitalism

[Volante3192]

FTFA:

Talks over the price of Merck's drug, Efavirenz, broke off on Thursday when the health ministry rejected the New Jersey-based company's offer to cut its $1.59 per pill price by 30 percent. Brazil wanted to pay what Merck charges Thailand, or $0.65 per pill.

They TRIED to negotiate, and Merck put up a wall. So, in effect, Merck DID refuse Brazil.

Re:humanity vs capitalism

[fourchannel]

Oh it sure is nice not to be born with aids, especially when your mother got infected when pregnant. Or how about when the guerilla soldiers come to town and rape people. Or what about sheer ignorance of modes of transmittal. It sure is nice to live in a country that makes it very clear the dangers of aids, I'm not so sure Brazillians have that luxury.

Re:humanity vs capitalism

[hxnwix]

They do need to recoup the cost of the development of failed drugs and dead-end research.

That being said, we might also want to remember that RIAA members need copyright durations of artist's death + 1000000 years in order to compensate for all those failed artists.

And let us not forget that not every hole exxon drills yields oil, which makes $3.50/gallon a reasonable price for 85 octane gas.

Furthermore, we should bear in mind that baby seals are vastly overpopulated ...

Re:humanity vs capitalism

[Y-Crate]

I see that you've been reading the leaflets that the pharmaceuticals have been spreading for years. The truth is that most of the actual research is conducted in labs that receive HUGE amounts of public funding. The the drug companies greatest contribution comes in the development of manufacturing processes. Take AZT for example. Developed by the National Institutes of Health in the 1960s as a cancer drug, but failed to amount to anything.

Flash-forward to the early 1980s and the frightening early years of the AIDS crisis where there was absolutely nothing in the way of effective treatments for the first six years of the epidemic. It was pure hospice care until the National Cancer Institute took another look at AZT and found that it was the first drug that HIV seemed to respond to. The patent was assigned to Burroughs-Wellcome who paid for drug trials and promptly began selling it two years later. Selling it at a price that made it the most expensive drugs ever marketed ($8,000+ a year per patient) - despite the fact it was developed with public money and was the only treatment available for a rapidly-spreading disease with a 100% mortality rate.

Re:humanity vs capitalism

[laughingcoyote]

Absolutely silly. But it's a good measure here. Looks like Big Pharma's line of shit is considerably more effective than the RIAA and MPAA. Here's hoping they don't catch on.

Here's the reality of the situation. The biggest expense to Big Pharma is not research and development (which mainly takes place in universities, including a lot of public ones. Big Pharma does not fund those. You and I do.) It is not testing (and that could be handled entirely by the FDA, without their involvement at all. A lot of it already is. Big Pharma does not pay for the FDA. You and I do.) Their biggest expense is not manufacturing the pharmaceuticals, which, as should be obvious here, can be done pretty cheaply. Their biggest expense is wining, dining, and schmoozing doctors to use their medicines. To advertise on TV, to get patients to push doctors into getting them whatever medication that is. And to pay overpaid executives.

Let's cut out the middleman, and one of the biggest expenses here-the millions-per-year CEOs. Fund the universities well to develop the drugs. They will develop drugs for Third-World maladies, once the impetus to "make something you can sell" is gone. Have the FDA entirely in charge of testing, and farming out production-just production-to corporate entities. There we go.

Under the current system, there's far more incentive to look for treatments rather than cures. A treatment is a lifelong paycheck, a cure is a one-time payment. There's far too much impetus to develop Viagra rather than treatments for diseases that kill millions in poor countries. There's far too big a temptation to hold back a slightly-improved formulation until the patent on the current one is about to expire, and to use it to extend the patent far longer than it was intended to last. If that system collapses, I won't shed too many tears. Something better will replace it.

Re:humanity vs capitalism

[EWAdams]

Remind me again why ANY health-care activity should be for-profit. ANY. Band-aids to heart surgery. Why is selling food to starving Africans profiteering (which it is), but selling healthcare to people in pain or danger of death, not profiteering?

Re:humanity vs capitalism

[Mark_in_Brazil]

there is a difference between making a profit and gouging poor people for a drug they need

Right. And in this case, the Brazilian government, whose AIDS policy is a model being copied by other countries worldwide, makes sure every single HIV and AIDS patient in Brazil has the medicines. It therefore has huge bargaining power, because it represents such a large number of patients. The former Health Minister, the man responsible for Brazil's AIDS policy, is José Serra, currently the governor of São Paulo state (think of it as being like holding the offices of governor of California and New York and you start to get an idea of the importance of that post). Before anyone cries for the poor drug companies, there are a few important facts you need to know. First, when Serra was still Health Minister, the drug companies decided to try to make more money since the government was buying up everything. They tried to increase their prices when they were already reaping massive profits (all these drugs are mature products in the "cash cow" phase of the product lifecycle, so the BS "paying for research" argument doesn't fly in this case) at the old price. And now the Brazilian government is asking that Merck charge the same price here as they charge in Thailand. And you can be sure Merck is not selling at that price in Thailand as a public service - they are making a profit there too.
When Serra originally went to the two largest makers of AIDS drugs that sell in Brazil, he showed them that the Brazilian constitution permits the Health Minister to determine that a given epidemic is an emergency situation, and in case of emergencies, the Federal Government, on the recommendation of the Health Minister, can break patents. Serra went to the companies and told them he didn't want to do that, but that they would have to negotiate with him in good faith or he would simply break their patents. As I recall, one went along and the other balked for a time, until they saw that Serra wasn't bluffing and was really going to allow Brazilian pharma companies to manufacture the patented drug. I'm surprised the president had to go this far, but the drug companies may have decided to improve their bottom line by doing a little gouging of AIDS patients in Brazil. I'm proud of the government for not knuckling under to Big Pharma. If only the US government would see that and be shamed into actually standing up to Big Pharma on any issue, any issue at all. Instead, you all (I fled 7 years ago) will have to deal with health care prices spiraling out of control until almost nobody can afford it. I have to tell you I'm happy to be in Brazil, a country that actually cares about its residents' health. Yes, I said RESIDENTS. I'm not even a citizen yet! Brazil isn't xenophobic like the USA either, and does not see me, an immigrant, as some kind of threat or some kind of outsider to be treated like crap. Contrast that with how immigrants are treated in the USA these days... I understand there were huge anti-immigration rallies in the USA last week.

Just a quick disclaimer: I think Serra was one hell of a great Health Minister. In addition to standing up to Big Pharma on AIDS drugs, he was also the one who successfully pushed for a law permitting generic drugs (before him, there were none in Brazil), something you can be sure the price gougers from Big Pharma were opposing every step of the way. Serra was really brave to stand up to them on those two points, and I'm proud of him for doing it. He also worked hard (from the executive branch) with the Brazilian Congress to pass a modern organ donation law in Brazil, basically doing away with the black market for transplantable organs that existed before. All that said, I don't think Serra would be much of a president, and I can't say I'm unhappy he lost in his bid for the presidency in 2002. I suspect he'll run again in 2010, because the current president, who is serving his second consecutive term and is still massively p

Re:humanity vs capitalism

[Mark_in_Brazil]

It sure is nice to live in a country that makes it very clear the dangers of aids, I'm not so sure Brazillians have that luxury.

While I agree with the overall point your post makes, I'd like to tell you that Brazil has an outstanding AIDS policy, one that has been praised by the WHO (called OMS here - Organização Mundial de Saúde) and copied by numerous other countries. Brazil's policy includes free distribution of condoms, distribution of clean needles to addicts of intravenous drugs, and free access to the best and most modern drugs. It also includes free HIV and STD testing, a service I've personally used a few times. I am not in a high risk group, but it's good to be sure. Further, the Brazilian government's AIDS policy includes education. I myself learned quite a bit from the people at the government health center near my apartment where I have gotten HIV tests. The test result is given by a counselor, and the counselor gave me a lot of information I didn't previously have about STDs and HIV. Since I am highly educated and generally try to keep myself well-informed, I was surprised at how much basic information I didn't know before the counselor told me.
So in Brazil, in fact, the dangers of AIDS are made very clear by the excellent educational portion of the AIDS policy. Further, unlike the USA, insane religious fanatics don't have the power to push idiocy like the "abstinence only" sex education pushed in a lot of places in the USA despite having been repeatedly proven not to decrease teen pregnancy at all, but proven to lead to increased incidence of STDs, including AIDS. So let me bounce it right backatcha and say it sure is nice to live in a country where the public interest is placed above the sensitivities of lunatics who want to impose their beliefs on others, even if imposition of those beliefs can be a death sentence.

Re:humanity vs capitalism

[king-manic]

Brazil isn't exactly poor. Badly mismanaged but not "poor". It's a fairly large economy. This whole ideas that everyone outside of the west is the "third world" is kind of silly. The term itself is related tot he cold war originally which has no meaning now. I know it's now a reference to developing countries but thats kind of a fluffy definition too. What are they developing too? It's sort of a ethnocentric term, full of hubris. Your not like me so you must be a few categories down. Is china third world? India? How about the Ukraine? /rant

Re:humanity vs capitalism

[Registered Coward v2]

Remind me again why ANY health-care activity should be for-profit. ANY. Band-aids to heart surgery.

Because the government is so good at running things?

Re:humanity vs capitalism

[saforrest]

You have to physically perform an action which every semi-intelligent person knows carries the risk of AIDS (unprotected sex, sex with a stranger, sharing needles, etc) to get AIDS.

Oh goody, the moralistic argument.

First, it needn't surprise you that there are all kinds of ways one person can compel another to engage in sexual intercourse. And I'm not just talking about rape and prostitution either.

Second, there are all kinds of ways one person can come into contact with another's blood. In a country with a sufficiently high HIV prevalence, any car accident, mugging, or fistfight might result in infection. And while the First World now has pretty good testing regimes for blood transfusions, are you sure that's the case everywhere?

If you think every fistfight is voluntary: on CBC radio a couple of weeks ago, they had an example (from Tanzania I believe) where a guy had gotten beat up while defending his elderly neighbour's house from burglars, and contracted HIV in the process.

So cut the moralizing "they all made their choices" crap.

Re:humanity vs capitalism

[RealGrouchy]

Yes, and Brazil actually had the balls to stand up the the U.S. and refuse AIDS prevention money that was locked into abstinence-only programs.

- RG>

Re:humanity vs capitalism

[nosferatu1001]

wow, ignore the body of the post and attack the person. nice.

the US is known for using "abstinence" only, and not providing any barrier methods. that is plain stupid, and defies human nature.

the country with the highest abstinence age, lowest STI rate and highest public awareness is Holland. Sex education starts at 5, and teaches that sex is normal, fun but overall has to be SAFE. and it works. and your system doesnt

GUess you;ll just go down the toilet then.

Re:humanity vs capitalism

[Elektroschock]

I don't really see the point of the US. Patent law adheres to the territorial principle. Brasil is free to request compulsory licensing. And everythings conforms TRIPs. In fact the USA did the same with Bayer vaccine.

Re:humanity vs capitalism

[Waffle Iron]

Which basically makes it state-sponsored IP-scoffing.

You say that as if "IP" were a God-given right. It's not: "IP" is a collection of government entitlement programs, and what a government gives, a government can take away.

Re:humanity vs capitalism

[iamnotaclown]

In other words, Canada.

Don't believe the FUD. Socialized health care is more efficient and cheaper per capita than your broken free market system:

http://www.thestar.com/News/article/204163

Re:humanity vs capitalism

[aurispector]

It's ridiculous that these attitudes still persist. Every time I hear the claim that AIDS is the patient's fault I want to smack someone. There are at least a dozen ways people could contract the disease innocently and unknowingly. Sure, some people take risks and pay the price, but for instance in Africa the infection rates are so high because of ignorance about the disease, not because they are all moral failures.

Merck does have a right to recoup their development costs-after all they have to save up for the next round of drug liability lawsuits like the vioxx fiasco.

Still, they ought to play smarter and drop costs when countries try to negotiate price-the tactic of countries taking a compulsory license is a big weapon against which they have no counter. They could sell AIDS and malaria drugs cheap and look like angels whilst continuing to price gouge for boner pills. Problem solved!

Re:humanity vs capitalism

[nosferatu1001]

Personally I see nothing wrong with making money through prostitution is not a shameing occupation. AS long as you have free choice about it and it is properly regulated, then I see no problem. But then I peronally believe sex between consenting parties is fine.

Finally, you made the classic straw man of suggesting because I liked ONE aspect therefore I must like it all. I agree Holland has problems, however it is a MUCH bettwer country to live in than the US. Much more free, in the ACTUAL versus religious rights idea of it....

youtube

[gargletheape]

you know what else Brazil and Thailand have in common? A boisterous tourism industry and hot girls. Seriously, what does youtube have to do with this story?

Re:youtube

[Anonymous Coward]

as a matter of fact, brazil stopped blocking youtube three days after the ban was actually set. And not all ISPs complied with the ruling, only one, Brasil Telecom, which is responsible for broadbrand in all southern states.

"Black Box" Drugs?

[Kadin2048]

I wonder what the endgame might be out of situations like this.

Right now, my understanding is that to produce and get approval for a drug, you need to release its chemical formula and other information about it.

But I wonder if at some point in the future, if the drug companies get too worried about their profits due to genericization in countries like Thailand and Brazil, that they might try to implement some sort of "drug DRM." Rather than making the composition of the drug open, don't release what's actually in it, and just test it as a 'black box,' show empirically through tests that it's effective and reasonably safe, but dope the actual pills with a lot of random substances that make it difficult to reverse-engineer (or have the actual drug only be something that's produced in the body through subtle combinations of various things in the pill, or keep the methods of producing the various chemicals in the pills a secret). I'm sure there are lots of bizarre ways that the drug companies could think up to protect the compositions.

Now, I'm not saying that any of these schemes would be effective at protecting the composition -- if the market for a generic drug is big enough, the labs in Thailand can probably afford to spend a lot of time with a mass spectrometer/gas chromatograph and unravel it, but that doesn't mean the drug companies wouldn't try, and waste a lot of time and effort in the process.

As we've seen in the battles over digital IP, there are a whole lot of things that can end up as collateral damage in the fights between rightsholders who see the gravy train slowing down, and people who want their products at a lower price than is being offered.

Re:"Black Box" Drugs?

[haluness]

> Rather than making the composition of the drug open, don't release what's actually in it,
> and just test it as a 'black box,' show empirically through tests that it's effective and
> reasonably safe, but dope the actual pills with a lot of random substances that make it
> difficult to reverse-engineer

I really can't forsee any form of DRM for chemical compounds. It's quite like DRM for music - at one point the music has to be played on a speaker. Similarly, if you're going to make a drug, you're going to have to give the pill out at which point you have the whole field of analytical chemistry (mass spec, HPLC etc) at your disposal!

Furthermore, adding random substances to it, doesn't really hinder the identification process - they'd just show up as separate peaks on the spectrum. In addition randomly adding substances to a drug mixture would probably mess up pharmacokinetics which would have to be restudied all over again.

Unfortunately the chemical world is a little bit messier than the digital world :)

I live in Brazil, Youtube was never blocked here.

[had3l]

I remember seeing that "Brazil blocks Youtube" thing on slashdot, but seriously, I tested it back then, and there was no block, I talked to everyone I know, and they also noted no block. Not that one wasn't issued though, it probably was never enforced.

It was a BS case anyway, it was a public beach, everyone was there to see them having sex. If anyone was breaking the law, they were. Of course, with the justice system here as corrupt and moronic as it is, those kinds of rulings aren't surprising. Believe me though, 100% of the Brazilian people would be against any sort of ban.

Innovation is pretty safe

[TimTucker]

As they say: necessity is the mother of innovation. As long as we have a need for medicine, someone's going to do the research to look for it. It may become less easy to justify spending millions in funding and make millions in profits off of discoveries, but that doesn't mean that innovation will stop.

Re:bullshit

[geekoid]

Brazil wanted to give them some money.
Mereck said no so Brazil took it to save the lives of its people.
Considering its a global company, They should have taken Brazils offer and looked to Europe and N.America to recover costs.
OTOH, since Merick wouldn't sell to Brazil anyways, there not actually loosing money now, are they?

Not without instructive precedent in the US

[Wdi]

Year 2001: 5 (five) US citizens die in Anthrax scare. US government immediately starts proceedings for compulsory license for Cipro, wrestling the patent rights away from foreign company and competitor Bayer. This stance is widely praised as proactive and protecting the precious lives of US citizens.

Year 2007: Tens of thousand of people die in Brazil each year from AIDS because they cannot afford patented medication. Action from Brazil to force compulsory licensing is widely denounced as destroying the worldwide pharma industry, especially by US commentators.

Well...

Re:Not without instructive precedent in the US

[kmac06]

From your link: "This quantity was far greater than the supply, and Bayer lacked the capacity to produce such a large quantity in a timely manner."

Sounds like the manufacturers couldn't produce the drugs, so the government stepped in to ramp up production. Not exactly what you made it sound like.

Re:This is a very slippery slope -when does this e

[MojoRilla]

Stop believing big pharma's FUD.

There are several significant factors undercutting this supposed billion dollar price tag. The first is that AIDS research has received significant public funding, and second is that antiretroviral drugs have the shortest time to approval of any class of drugs, approximately half the time of normal clinical trials (the mean time for antiretrovirals is 44.6 months, compared to an industry average of 87.4 months).

See this report from Doctors Without Boarders for more information.

The State giveth, the State taketh

[bidule]

Patents are government-granted monopolies. It is not an absolute right and has to be balanced against the need of the People.

Reading this news as a fight between corporate greed and governmental greed is the wrong way to look at that. Right or wrong, you try to choose the lesser evil. Everyday the little citizen get crushed for reason of State, for once it is a big pharma that pays the price.

BTW, the pharma spammer are quick on the button today. Disgraceful.

Merck's spending breakdown

[compumike]

From their latest annual report, for fiscal year 2006: (all numbers in millions of dollars)

• Sales revenue: 22,636.0

So where does the money go?

• Manufacturing costs: 6,001.1
• Marketing & adminstrative costs: 8,165.4
• R&D: 4,782.9

Only 20% of the price of each pill goes toward future research and development... Marketing & administrative costs are double that. Ouch.