Brazil: People Before Profits


Brazil is setting an example of good public health policy. Along with Chile, Brazil is one of the few developing countries that provide free antiretroviral (ARV) drugs to all the people diagnosed HIV-positive who meet medical criteria that warrants the beginning of therapy. Unlike Chile though (and many other developing and developed countries), Brazil also has one of the most successful, evidence based and rights based HIV/AIDS programs in the world. By this I mean basic strategies, like the distribution of condoms and the free provision of ARVs to those who need it.

Recently, on April 24, Brazil's Health Ministry issued a Public Ordinance declaring the ARV drug Efavirenz (Patented by Merck) of public interest, for the purpose of granting a compulsory license for public non-commercial use.

What does this mean? Well, it basically means that Brazil can either manufacture or import generic versions of Efavirenz without Merck's authorization. This of course will dramatically reduce the price Brazil is currently paying for the drug, which is used daily by 38% of the identified HIV-positive people in the country.

The ordinance occurred after Brazil rejected Merck's offer of selling the drug at U.S. $1.10 for a daily dose. Although this price may not seem much to some people (little more than U.S. $30 a month), we can bring it into perspective if we relate it to other countries in Latin America. For example, those 360 dollars a year are more than the WHO figures for total per capita expenditure in health of Haiti, Bolivia, Honduras, Nicaragua, Peru, Guatemala and Ecuador.

How has Brazil done this? Is it legal to dismiss a patent for a drug? When a patent for a drug is issued, it lasts for 20 years, and the pharmaceutical company that holds the patent can charge whatever it deems necessary to make profit. Prices only go down as competition starts, which is usually with the advent of generic medications to the market. Many people don't know (and many governments apparently don't remember) that international trade agreements give governments the necessary provisions to protect their citizens' health….even against "big pharma"! Issues related to international trade and patents are regulated by international law set by the World Trade Organization with the agreement of most of the world's countries. Patent regulations are in the document "Trade Related Aspects of Intellectual Property Rights", commonly know as TRIPS agreement (if you want the full document you can download it here as a PDF), which were further regulated in the 2001 Doha "Declaration on the TRIPS agreement and public health".

WTO, unlike other international bodies, has a political system that works by consensus. That is, any decision taken in WTO must be accepted by every one of its members, who then also agree to follow the decision taken. This gives financially disadvantaged countries considerable political clout compared to what they have in other international institutions (such as the IMF or World Bank).

The 2001 Declaration established provisions that safeguard the populations against patent restrictions that may endanger public health. Amongst them is the right of any country to declare an emergency situation and issue a compulsory license, which means that generic drugs may be produced or imported without consent of the patent holder. Some other provisions are the right to undergo parallel negotiations, which basically means that a country can do some "window shopping" around the world for the best price being offered in any country of any branded drug. In effect, this means the use of globalization to cut the costs of a country's expenses for a drug. For example, you may know that drugs in India are offered by pharmaceutical companies at substantially lower prices than in Bolivia or Nicaragua, be it because of the large quantity being bought or because of the strong competition by local pharmaceutical companies. Finally, it provided the least developed countries with a 10 year extension to comply with the TRIPS agreement, pushing the date to year 2016.

Brazil is making use of internationally accepted mechanisms to protect its population. Allowing the manufacturing of generic drugs decreases the price of an ARV treatment from roughly U.S. $10,000 a year in developed countries to U.S. $300 a year. You can imagine the positive change in access that this causes for people in poor countries.

Although pharmaceutical companies sometimes whine about how this may damage research and development (R&D) of new drugs, this is nothing but spoken garbage. Developed countries amount to more than 75% of the pharmaceutical market, and regions such as Africa to nothing more than 1%. In an industry with a profit margin of roughly 30%, it is ridiculous to think that this would damage them in any way. Besides, the R&D argument has absolutely nothing to do with developing countries that, besides HIV, are dealing with tropical or neglected diseases and only about 1% of the new drugs developed are aimed towards helping people facing these diseases. This information and a call for corporate social responsibility from pharmaceutical companies can be found in a report from Oxfam on the matter (PDF). There are many other arguments put forward that are also implausible, and you can see them refuted by Oxfam here.

There are some medicines that are essential if we truly believe in a right to the highest attainable standard of health. The WHO defines essential medicines as those "that satisfy the priority health care needs of the population", and you will notice that in this case, Efavirenz is in the updated WHO list of essential medicines. Brazil is an example not only of a country that establishes a good national strategy to stop HIV, but also of the correct use of international provisions to protect its citizens.

It is up to all of us to hold governments accountable for using every available means to insure access to essential medicines. Remarkable initiatives like the "Campaign for Access to Essential Medicines" of Doctors Without Borders can only be successful once we take notice, think globally and act locally.

Like this story? Your $10 tax-deductible contribution helps support our research, reporting, and analysis.

  • invalid-0

    Well, thanks for taking a look at one side of the issue. Dismissing the other side’s point of view out of hand doesn’t actually add anything to the debate in what is a complicated issue.

  • moises-russo

    Well David, thanks for your comment…however,I am sorry to say that some of us do not think you must always "add" to the debate. Many times the role we have to take is actually choosing a side on the matter (in my case, I chose public health) and do an effort to provide other people with the reasons of why you chose that side. Always "adding" to the debate, never listening to what has already been said and actually making a decision may be too slow on health matters. You are welcome to provide the other view (I am not qualified to do this myself), and all the arguments provided in my blog are always up for challenge. Although you might want to consider that perhaps in this case, the sides were actually the ones in the title of the article….people v/s profits.