Brazil to Break Merck AIDS Drug Patent to Lower Price

Brazil’s president signed an order to override the patent of Merck and Company’s signature AIDS drug, thereby opening the field to lower-cost producers to sell generic versions of the drug. Citing a 2001 World Trade Organization ruling permitting countries to overrule drug patents in cases of national health emergencies, Brazil rejected Merck’s offer to reduce the price of Efavirenz, part of an anti-retroviral AIDS treatment program. The decision is likely to encourage activists worldwide, who have been vocal about the need to curtail the patents of international drug companies. Brazil’s decision could also buoy the government of Thailand, a major advocate for generic drug producers, in its negotiations with other international pharmaceutical companies. On the other hand, Brazil may soon face hostility from foreign investors, wary of any threats to their intellectual property rights. Furthermore, Brazil’s prohibitively high import tariffs on medicines do just as much to deny Brazilians access to medicines as pharmaceutical company pricing does, a fact that makes the grand gesture on overriding the Merck patent somewhat disingenuous. But whatever the eventual consequences, the decision will spark debate about the ethics of drug pricing, with activists and national governments on one side, international drug producers on the other. – YaleGlobal