Brazil's Stocrin move will force down prices

The decision by the Brazilian government to issue a compulsory license for USA-based drug major Merck & Co's antiretroviral Stocrin (efavirenz) has followed the same pattern of praise from anti-pharma non-governmental organizations and criticism from intellectual property rights advocates as the ongoing situation in Thailand (Marketletters passim). The move allows Brazil to import and, eventually manufacture, cheaper generic versions of the drug, once a Brazilian government laboratory is ready to produce efavirenz on a large scale by the end of 2007.

Brazil's action follows Thailand's compulsory licensing of Stocrin and two other drugs in recent months. The Brazilian government was at pains to demonstrate that it had not ignored the option of negotiating lower prices with the US drugmaker. The government stated that it was seeking a 60% reduction from its middle-income country price of $1.57 per tablet, but claimed that Merck's best offer was $1.10, a 30% discount, which the firm argued was "the lowest price of any country with a comparable wealth and disease burden." Minister of Health Jose Temporao said he wanted a comparable figure to the $0.65 that is now paid by Thailand's government. Under compulsory license arrangements, generic imports from India will be available for $0.45 per tablet, according to the International Center for Trade and Sustainable Development, a Switzerland-based NGO. The Health Ministry says the license will reduce costs by about $240.0 million for a tax-funded HIV/AIDS drug program which supplies 180,000 patients, between now and 2012, when Merck's patent expires in Brazil. The International Federation of Pharmaceutical Manufacturers and Associations criticized Brazil for what it termed a "confrontational approach."

Efavirenz could fall "below $0.24" per day