Report from Brazil January 2013

The health ministry of Brazil recently signed an agreement with US-based Bristol-Myers Squibb to obtain its patented production technology in order to locally develop the antiretroviral drug atazanavir sulfate. The drug is used, together with others, to treat HIV-infected patients in Brazil.

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The process of transferring the drug's production technology will take place until the end of 2016, while domestic production is planned to begin by 2017, according to the country's health ministry. Before the patent for atazanavir (held by Bristol-Myers Squibb) expires by the end of 2017, Brazilians will be trained by experts at the company's USA-based facility on how to produce the drug. The drug will be produced at a Rio de Janeiro-based pharmaceutical plant named Farmanguinhos, operated by Oswaldo Cruz Foundation (Fiocruz).

Atazanavir

Atazanavir is distributed to approximately 45,000 patients by the public health system, which corresponds to approximately 20% of all the HIV-infected patients cared for under this system. According to data from the health ministry, the government of Brazil spends approximately R$86 million ($41.4 million) annually to purchase the drug abroad. When atazanavir, which is taken daily by patients, starts being produced domestically, the country is expected to save a total of R$385 million ($185.3 million) in five years, the ministry added.

Starting in 2013, the drug will be distributed nationwide inside locally-produced packaging. Output from the new domestic plant will add one more drug to the locally-produced drug list for HIV-infected patients, totaling up to 11 drugs produced in Brazil from the 20 medications offered at no cost to HIV-infected men and women in Brazil. According to government figures, some 127 million capsules will be produced annually in Brazil by 2017.

Atazanavir is a protease inhibitor. This class of drugs is used to treat or prevent infection by viruses. Atazanavir is administered in combination with two other antiretroviral agents to prevent the risk of developing drug-resistant mutated viruses.

The deal

According to the Oswaldo Cruz Foundation (Fiocruz), the plan is to meet at least 50% of the demand for atazanavir sulfate by 2015. Fiocruz says this deal guarantees that Farmanguinhos will set a final price for the drug that is 5% lower than the current price.

The Brazilian government will not pay for the technology but guarantees purchasing the drug from Bristol-Myers Squibb until the end of the deal in 2017. According to the health ministry's AIDS department, this is the first deal of its kind for developing domestic production of a drug whose patent has not yet expired.

The Brazilian Interdisciplinary Aids Association (ABIA) disagrees with the details of the deal and has questioned the need for the government to pay such a high price for a drug that will only be produced in 2017. The health ministry, on the other hand, says that prices will drop gradually. Minister Alexandre Padilha has publicly defended new deals with private laboratories in order to maintain the local HIV/Aids treatment program, which cares for approximately 217,000 Brazilians.

HIV/AIDS public health program in Brazil

Zidovudine (AZT), one of the first drugs to treat HIV, was made free for all Brazilian patients in 1991. In 1996, when antiretroviral treatments were developed, the drugs were offered for free to local patients, causing national AIDS mortality rates to decline, as observed by the 1992 International Conference of AIDS. By 2002, figures from the Brazilian health ministry showed that the drugs had helped to save more than 1.1 billion people by preventing deaths and hospitalisations.

According to the World Health Organisation (WHO) guidelines of 2010, the levels of treatment coverage in Brazil were more typical of a developed country than a middle-income nation such as Brazil. Specialists, as well as WHO, say that Brazil's program success is based on the fact that the country has produced various AIDS drugs locally. Currently 50% of the drugs offered by the public health program are produced domestically.

Brazil has complied with the international Agreement on Trade Related Aspects of Intellectual Property (TRIPS) since 1996, which limits the production of generic drugs that have been patented abroad. However, various generic drugs produced in Brazil were patented before the agreement and can be legally copied (1).

In other cases, such as for atazanavir, Brazil has obtained the drugs internationally and was forced to put pressure on the pharmaceutical companies to lower their prices. In order to force price drops, the country has used a clause found in the TRIPS agreement, whereby "compulsory licenses" are given to developing countries, allowing them to produce generic versions of drugs when the government considers it to be a public health emergency.

The government had never actually issued a "license" despite obtaining price reductions. However, in 2007, Brazilian President Luiz Inacio Lula da Silva announced that the country would issue a compulsory license for a drug named efavirenz, patented by Merck. The decision received mixed reaction. AIDS activists supported the decision, while Merck, as well as other pharmaceutical firms, said the move was unfair and could impact new investments in drug research and production in Brazil.

On the other hand, there is no doubt that the move has saved lives, while analysts say that the tactics have influenced the market globally by increasing competition and driving costs down. A publicity poster released earlier by the health ministry said, "Local manufacturing of many of the drugs used in the anti-AIDS cocktail permits Brazil to continue to control the spread of AIDS. The drugs industry sees this as an act of war. We see it as an act of life."

Hellen Berger is a business writer based in São Paulo, Brazil.

Reference

1. S. Okie, New Engl J Med 354, 1977–1981 (2006).