Brazil is so trendy…its pharma patent-busting technique is starting to catch on

In the fall of 2005, Brazil successfully used the TRIPs compulsory licensing provisions as a sword to negotiate lower prices on patent-protected drugs from big pharma. Abbott flinched when faced with this novel approach, and agreed to drastic discounts to avoid an ‘official’ compulsory license.

Back then, I viewed the agressive actions of the Brazilian government as “a beginning” of a new trend:

“Is this really an end to the drama, though? I don’t think so. I think it more resembles a beginning.

The threats by Brazil to violate intellectual property rights is a bold an unprecedented use of intellectual property in international policy. The United States, of course, uses intellectual property in its policy efforts - seeking better protections for rights-holders based in the country - all the time. But Brazil has done the opposite - using its willingness to ignore intellectual property rights to accomplish its policy objectives.

And it succeeded. Abbott cut its price in half in response to the threats.

This issue will grow in importance for the medical-related industries considering the language of the TRIPs agreement and the WTO Doha Declaration in particular. Brazil and other countries are likely to be emboldened by the Abbott deal. When will Brazil or another country raise the TRIPs medical-emergency sword again? Hard to predict, of course, but considering the success Brazil had in the Abbott deal, one thing is certain- it will happen.“

Well, it didn’t take long. Brazil is raising the compulsory license sword again, now threatening to break Merck’s patent on Efavirenz, an AIDS antiviral drug that the Brazilian government believes is a “public interest medicine.”

This move by the Brazilian government is not particularly surprising. It worked before, why not try again?

But, the bigger trend now appears to be developing. Thailand recently adopted the strategy. Abbott again found itself as the target (and the de facto poster boy of the entire industry), and again flinched. The company recently cut the price of its AIDS drugs by more than half in an effort to avoid an ‘official’ compulsory license.

Chances are, we’ll see developing nations deploy the Brazilian strategy over and over again as the successes continue to pile up. Big pharma no doubt has a tough decision to make - when and how to mount a counter attack.

Who said domestic patent reform was the biggest patent issue on big pharma’s mind?

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Title: “Brazil is so trendy…its pharma patent-busting technique is starting to catch on”

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Published:: 04.26.07 / 9am

Author:: admin

Category:: Brazil, Compulsory license, Pharmaceuticals, TRIPs

Comments:: 2 Comments

About Promote the Progress

Promote the Progress is a growing portal of patent law information from around the globe.

Timothy Platt 04.27.07 / 4am

620,000 + Brazilians infected by HIV/AIDS should qualify as a medical emergency. Patent rights are an important part of the balance of incentives and rights, but they are never absolute. Should compulsory license provisions (which may make the patent system acceptable to the developing world) never be invoked? Ask what many members of the US Congress had to say during the 2001 Anthrax scare, envisioning a purely theoretical shortage of Ciprofloxacin. And what compulsory license threats did the US Department of Health and Human Services use when driving Ciprofloxacin patent holder, German Bayer AG, down to a lower price?

William New 04.27.07 / 4am

Hi, just trying to understand this argument as a journalist writing about the compulsory license issue: Based on the TRIPS agreement, isn’t it understood for those who receive a patent, especially if they apply it internationally, that the monopoly comes with an obligation related to public interest, that there is always a built-in possibility for other countries to act in their own public interest, and up to them to decide when that is necessary? It wouldn’t really be ‘patent-busting’ if it was already understood to be part of the deal when you apply a patent outside the US? I wasn’t there for the negotiations, but wasn’t that the intent of the TRIPS agreement, which the pharmaceutical industry and everyone else agreed to? If that option (the ability to use the so-called flexibilities like compulsory licenses) wasn’t in the agreement, would the developing countries have even signed the agreement? And then why would anyone be surprised when they use it? Also, is it considered patent-busting when developed countries issue compulsory licenses?

Thanks for the help. Some lawyerly explanation could be useful here.

Best, William New, Editor, Intellectual Property Watch, Geneva (www.ip-watch.org)

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Brazil is so trendy…its pharma patent-busting technique is starting to catch on

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