Brazil’s pharma pressure campaign for cheap HIV/AIDS drugs

Of all the many things that outgoing Brazilian President Luiz Inácio Lula da Silva has been praised for, his work on HIV/AIDS is one of the most impressive. Brasilia decided a decade ago to give lifesaving anti-retroviral (ARV) treatments away to anyone who needed them, and by 2007 those drugs were reaching 80 percent of ...

By , International Crisis Group’s senior analyst for Colombia.
ANTONIO SCORZA/AFP/Getty Images
ANTONIO SCORZA/AFP/Getty Images
ANTONIO SCORZA/AFP/Getty Images

Of all the many things that outgoing Brazilian President Luiz Inácio Lula da Silva has been praised for, his work on HIV/AIDS is one of the most impressive. Brasilia decided a decade ago to give lifesaving anti-retroviral (ARV) treatments away to anyone who needed them, and by 2007 those drugs were reaching 80 percent of the country's AIDS patients. Recently released WikiLeaks cables give us a behind the scenes look into how Brazil convinced international drug companies to sell their patented AIDS drugs at a low price: with a lot of pressure. 

By way of background, Brazil is member to the 1996 International Agreement on Trade Related Aspects of Intellectual Property (TRIPS), a convention meant to boost respect for intellectual property rights in the pharmaceutical industry in a world of mass-produced generic drugs. In short, TRIPS is meant to increase the generic production of patented drugs. But there's one interesting clause in that agreement, allowing countries' governments to issue a "compulsory license" for any drug they deem necessary to ward off a crisis situation. And in Brazil, HIV/AIDS was deemed exactly such a crisis. 

Brazil used that crisis clause to negotiate extremely low-cost drug imports from major pharmaceuticals, including Gilead Sciences, Abbott Laboratories, and Merck & Co. subsidiary Merck, Sharp & Dohme. In short, it threatened to issue compulsory licenses for the drugs to pressure the drug companies to lower their prices. In a meeting with the U.S. embassy in 2003, for example, a Merck communications director noted "Merck's position that the prices demanded by the MoH [Ministry of Health] are below cost and even lower than those Merck has granted to least-developed countries in Africa." In 2005, they were still negotiating. And in 2007, Brazil actually did issue a compulsory license, proving they were serious. Through it all, the U.S. embassy served as a channel to relay messages to the drug companies; its officials also insisted that Brasilia respect intellectual property rights and were dismayed by the unrelenting drug price policy.

Of all the many things that outgoing Brazilian President Luiz Inácio Lula da Silva has been praised for, his work on HIV/AIDS is one of the most impressive. Brasilia decided a decade ago to give lifesaving anti-retroviral (ARV) treatments away to anyone who needed them, and by 2007 those drugs were reaching 80 percent of the country’s AIDS patients. Recently released WikiLeaks cables give us a behind the scenes look into how Brazil convinced international drug companies to sell their patented AIDS drugs at a low price: with a lot of pressure. 

By way of background, Brazil is member to the 1996 International Agreement on Trade Related Aspects of Intellectual Property (TRIPS), a convention meant to boost respect for intellectual property rights in the pharmaceutical industry in a world of mass-produced generic drugs. In short, TRIPS is meant to increase the generic production of patented drugs. But there’s one interesting clause in that agreement, allowing countries’ governments to issue a "compulsory license" for any drug they deem necessary to ward off a crisis situation. And in Brazil, HIV/AIDS was deemed exactly such a crisis. 

Brazil used that crisis clause to negotiate extremely low-cost drug imports from major pharmaceuticals, including Gilead Sciences, Abbott Laboratories, and Merck & Co. subsidiary Merck, Sharp & Dohme. In short, it threatened to issue compulsory licenses for the drugs to pressure the drug companies to lower their prices. In a meeting with the U.S. embassy in 2003, for example, a Merck communications director noted "Merck’s position that the prices demanded by the MoH [Ministry of Health] are below cost and even lower than those Merck has granted to least-developed countries in Africa." In 2005, they were still negotiating. And in 2007, Brazil actually did issue a compulsory license, proving they were serious. Through it all, the U.S. embassy served as a channel to relay messages to the drug companies; its officials also insisted that Brasilia respect intellectual property rights and were dismayed by the unrelenting drug price policy.

I asked Eduardo J. Gómez, an expert on Brazil at Rutgers University, what he made of the cables. Brazil’s policy, he said, was a product of overstretched health budgets, public opinion, and even self-imposed pressure to uphold a reputation as a leader in HIV/AIDS treatment. "The government feels that it’s painted itself in a corner, and that to maintain its global reputation, it must do whatever it can to guarantee access to medicine," he told me by e-mail. "In short, this is just further evidence that Brazil places its people and social commitments well above and beyond anything else."

Elizabeth Dickinson is International Crisis Group’s senior analyst for Colombia.

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