Brazil Breaks Patent on HIV Drug:

Dispelling the Myths

Brazil recently issued a compulsory license for the HIV drug Efavirenz, causing significant controversy around the world. Many people believe that Brazil should not have bypassed Merc !s patent because of the myths being spewed by "# pharmaceutical companies and interest groups. Here are some of the common myths and the realities of the situation$
MYTH: %"&'ITY: Brazil is stealing intellectual property and abusing a legal loophole by issuing the compulsory license or Merck!s HIV drug " a#irenz$ By issuing a compulsory license, Brazil is ta ing advantage of the right afforded to it by the %&'!s (greement on &rade)*elated (spects of Intellectual +roperty *ights ,&*I+#-. &his right protects the government from abuse by pharmaceutical companies because it forces the companies to sell their drugs at reasonable prices that the country and its residents can afford. Brazil negotiated e.tensively with Merc on the price of Efavirenz before issuing the compulsory license. /urthermore, Merc will still be ade0uately remunerated for owning the patent. &hus, Brazil is not stealing or pirating, but simply ta ing advantage of the right afforded to it to balance the rights of patent holders with the protection of public interest. Issuing a compulsory license( as Brazil has( undercuts uture research and de#elopment on medical inno#ation( especially in the de#eloping )orld$ +harmaceutical profits from sales in developing countries are insignificant in creating incentives for future research and development. (ll of the developing countries combined ,(frica, (sia, and 1atin (merica- comprise less than 22.34 of total global drug sales. ".#. drug companies ma e most of their sales ,55.34-, and an even higher portion of their profits, from the rich mar ets of 6orth (merica, Europe, and 7apan. &hus, a loss in sales from some of the developing nations is not going to significantly affect the profits of a pharmaceutical company and the amount of money available for future research. Brazil is not a poor country and should be e*pected to pay the same price or patented medicines that other )ealthy nations pay$ I the go#ernment cannot a ord the costs o the medications( more money should be allocated to healthcare$ (ccording to the %orld Ban , Brazil is classified as a lower)middle income nation with a 86I per capita of less than 292:th that of the "nited #tates and other high income nations. /urthermore, Brazil spends nearly as much on healthcare ,;.<4 of its 8=+- as the average high income nation outside of the "nited #tates ,5.54 of 8=+-. /inally, Brazil is limited in the amount of money it can spend on healthcare by the International Monetary /und ,IM/-. In order to get a >stamp of approval? for its economic policy, Brazil must adhere to the budget ceilings that the IM/ set. It is unfeasible for Brazil to spend more money than it already does on healthcare. Brazil!s actions are short+sighted and not in the best interest o its patients in the long run$ Buying generic medicines to create generic competition is the best way to reduce drug prices and increase access to medicines in the long run. Brazil!s history provides the perfect e.ample of this. Brazil began offering free and universal access to triple) combination antiretroviral treatment in 2@@<. (fter the Brazilian government began producing (I=# drugs generically, prices dropped by 5A4. In contrast, the prices of drugs with no generic competitor dropped by only @4. &he price drop from generic competition has allowed over 2<:,::: patients a year in Brazil to have free access to HIV medicines. &he government estimates that treating patients early in the epidemic has saved Brazil more than BA billion in health)care costs since the beginning of the epidemic

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