Brazil Voids Merck Patent On AIDS Drug

JoeBackward writes "Merck has this useful anti-AIDS drug Elfavirenz, and Brazil has lots of poor people with AIDS. So, after trying really hard to get Merck to cooperate on pricing, the Brazilian government has decided to take a 'compulsory license' to the patent, and get the drug from a factory in India. This compulsory license is basically a way to take the patent by eminent domain." This move gives Brazil one more thing in common with Thailand, both of which have blocked YouTube. Thailand's compulsory licensing of Elfavirenz and Plavix has landed the country on the US's watch list for piracy.

Re:humanity vs capitalism

[TrnsltLife]

Agreed. Good for them, it's good to see a country looking out for the welfare of its own citizens ahead of the profits of some multinational corporation.

I live in Brazil, Youtube was never blocked here.

[had3l]

I remember seeing that "Brazil blocks Youtube" thing on slashdot, but seriously, I tested it back then, and there was no block, I talked to everyone I know, and they also noted no block. Not that one wasn't issued though, it probably was never enforced.

It was a BS case anyway, it was a public beach, everyone was there to see them having sex. If anyone was breaking the law, they were. Of course, with the justice system here as corrupt and moronic as it is, those kinds of rulings aren't surprising. Believe me though, 100% of the Brazilian people would be against any sort of ban.

Re:youtube

[Anonymous Coward]

as a matter of fact, brazil stopped blocking youtube three days after the ban was actually set. And not all ISPs complied with the ruling, only one, Brasil Telecom, which is responsible for broadbrand in all southern states.

Re:humanity vs capitalism

[Anonymous Coward]

The idea that someone has a divine right to recover sunk costs is quintissentially communist (google Karl Marx, Labor Theory of Value).

This is a WIN for free-market capitalism, where there shouldn't be patents in the first place.

I do think it's sad to see "anti globalisation" and "anti capitalist" protesters - they *should* be "anti corporate-socialism" protesters. What we have today is about as far from real capitalism as the USSR was from real communism.

Re:humanity vs capitalism

[rhombic]

Sorry to disappoint, but there's a lot of people inside drug companies that give a lot of shit about people. I personally know I could be making a hell of a lot more money in the financial industry than I do in pharma. Why have lobbiests & etc to deal w/ governmental issues? Tell ya what, when the HMO's, AARP, & etc quit pushing the government to expropriate drugs & give them away for free, the companies would be more than happy to drop the government affairs and get back to doing science. But in the current climate, if you don't lobby, your interests will get buried. And then, once the investors realize that there are no more paying customers, you'll have no drug industry. Hope there's good leaches around in a few years when you decide to get sick.

Where get the $1e9 dollars per drug? Lots of places. Here's a couple:

The Tufts CSDD studies [tufts.edu] is a good source, their estimate was $900 mil four years ago.

Medical News Today [medicalnewstoday.com] estimates $1.2 billion for a new biological

Essentially, when you want the drug companies to give away a drug, you want to expropriate their property. As an investor, ask yourself whether you're willing to put your money into an industry that's subject to expropriation, and think about whether you want a drug industry around or not the next time a pesky little virus emerges from the forrest.

Re:This is a very slippery slope -when does this e

[melikamp]

A-haha, haha... [tear] I would like some of that stuff you are smoking.

These countries are treading on a slippery slope. At what point is it OK now to not pay for the hard work of other people, or to begin to directly steal from them?

Mentioning stealing is just a troll. And it is perfectly OK not to pay people when they do not work for you. I live in US, and even here I believe that these people do not work for me. I'll pay them for the research results when I can tell them what to do. Why should Brazil or anyone else suffer if they think that medical patents are stupid? If medical patents are as awesome as you think, shouldn't we just wait a few years and see the Brazilian economy shatter? Oh, wait, you say, patents do not work this way. Americans will actually be in a crippling disadvantage if they have patents and no one else does. Well, duh. That is because sharing knowledge is more productive than creating scarcity where there is none.

Re:humanity vs capitalism

[Volante3192]

FTFA:

Talks over the price of Merck's drug, Efavirenz, broke off on Thursday when the health ministry rejected the New Jersey-based company's offer to cut its $1.59 per pill price by 30 percent. Brazil wanted to pay what Merck charges Thailand, or $0.65 per pill.

They TRIED to negotiate, and Merck put up a wall. So, in effect, Merck DID refuse Brazil.

You would have a point...

[Rix]

If drug companies invested a significant percentage of their revenue on research. They don't (about 5%). It's *far* more efficient to give the money that would be spend on non-generic drugs to university research programs.

Re:humanity vs capitalism

[master0ne]

although the patent doesnt last forever on papre, the Pharm. companies are always trying to figure out a way to extend there patents such as this method: http://www.bmj.com/cgi/content/full/324/7347/1176/ b [bmj.com]

drug companies took advantage of the act by filing frivolous new patents designed to extend their hold on the market, the two senators say. "Drug companies are not spending all their time innovating new drugs. They're innovating new patents," Senator Charles Schumer of New York told a Senate subcommittee.

This drove up the average length of market exclusivity of drugs from 9.0 years in 1982 to 10.1 years in 1999.

9 years in alot of cases is too long to wait for a life saving drug millions of people need now. The way things are going though, the wait for a patent to expire will last alot longer than 9 years....

Re:humanity vs capitalism

[saforrest]

You have to physically perform an action which every semi-intelligent person knows carries the risk of AIDS (unprotected sex, sex with a stranger, sharing needles, etc) to get AIDS.

Oh goody, the moralistic argument.

First, it needn't surprise you that there are all kinds of ways one person can compel another to engage in sexual intercourse. And I'm not just talking about rape and prostitution either.

Second, there are all kinds of ways one person can come into contact with another's blood. In a country with a sufficiently high HIV prevalence, any car accident, mugging, or fistfight might result in infection. And while the First World now has pretty good testing regimes for blood transfusions, are you sure that's the case everywhere?

If you think every fistfight is voluntary: on CBC radio a couple of weeks ago, they had an example (from Tanzania I believe) where a guy had gotten beat up while defending his elderly neighbour's house from burglars, and contracted HIV in the process.

So cut the moralizing "they all made their choices" crap.

Re:humanity vs capitalism

[TubeSteak]

I need a place to live. The government has decided that you must give me your house because I need it more than you do. Nice to see humanity win one, eh?

Wow.

Good thing that patents aren't houses.
Patents are monopolies granted by the Government.
What the Government has given, the Government can take away.

Not to mention that WTO law allows for exactly what Brazil did.

Just to be clear, I don't want you modded down because I disagree with your statement (though I obviously do). I'd like to see you modded down because your statement is simplistic and wrong. On multiple levels.

A small correction

[blueish yellow]

The drug's name is Efavirenz [google.com] not Elfavirenz [wikipedia.org]. The stupid troll couldn't even get the name right.

Re:humanity vs capitalism

[glwtta]

As hard as it is to believe, only a handful of truly important drugs have been brought to market in recent years, and they were mostly based on taxpayer-funded research at academic institutions, small biotechnology companies, or the National Institutes of Health (NIH).

That's true, but entirely misleading. The cost of bringing these drugs to market absolutely dwarfs the cost of the research they were "based on". The total cost of getting a major drug to market is nearing $1 billion; I don't have a handy break-down of the various stages of the process, but I know that the average burn rate for a pure-research biotech of 50-75 people will be about $10-12 million a year. So, if after 5-7 years, having already done all the "innovative" work, such a company hands off a promising target or compound to big pharma, they haven't really put that big of a dent into the total cost of the drug. Not to mention that a large portion of such research is still financed by big pharma through various licensing deals (example/disclaimer: where I work, not a few salaries are currently being paid by none other than Merck).

The sad truth is that this is what it takes to fund medical research - developing a drug is a long, ridiculously expensive, and ridiculously risky process (from what I remember, less than 5% of all initiated drug programs make it to market; and that's actual drug programs, which is pretty far along from a research perspective). Without phenomenal payoffs there would not be any incentive to do it.

But everybody loves pure, unadulterated capitalism, right?

(btw, I have no problem with what the Brazilian government is doing here)

Re:humanity vs capitalism

[hamelis]

I love how the US has put Thailand on its watch list for piracy even though compulsory licensing is completely legal under internation patent agreements. This is the only reason we don't see a lot more poor countries doing the same thing: even though it's legal, they get leaned on by the US gov't because the pharmacy companies are whining about their profits.

See a decent explanation of compulsory licensing here http://en.wikipedia.org/wiki/Compulsory_license [wikipedia.org]

Brazil has fulfilled the "attempts to obtain a licence under reasonable commercial terms must have failed over a reasonable period of time" requirement. As others have mentioned, they have threatened this before. Another nice loophole that was or soon will be closed is that India's patent system only allow a process to be patented, not an end product. This allowed production of AIDS drugs at cost. But of course, India has been under pressure to 'normalize' its patent laws (ie make them the same as US laws) and this loophole will be closed either this year or next. Unfortunate, as the availability of cheap drugs from India has been a major factor in forcing pharmaceutical companies to negotiate prices.

Re:humanity vs capitalism

[andymadigan]

I live in Spencerport, NY in Upstate New York. My High School had an abstinence only curriculum. The class considered anything else to be completely unacceptable. This is the public High School. I hope _YOU_ haven't ever been to the U.S., this is very common around here.

Re:humanity vs capitalism

[Rich0]

The marginal cost of an Intel CPU might be $10, and the cost to design the CPU production plant was probably $300k, but building that plant probably cost hundreds of millions of dollars. In this case, the plant design is the NIH, the plant construction is Pharma, and the $10 CPU selling for $500 is the drug. Just because building the plant didn't require as much innovation as the design, doesn't make it cheap...

The NIH doesn't discover drugs. They discover enzymes, mechanisms, etc. Sometimes they come up with lead molecules as well. Most of the time if you gave those molecules to people it would end up killing them, or not working well. Pharma companies spend most of the R&D money figuring out how to make the lead compounds work better, and figuring out if they work at all and are safe. Answering that question costs literally hundreds of millions of dollars, and most of the time the answer is no.

Re:humanity vs capitalism

[Acer500]

>> ...having been repeatedly proven not to decrease teen pregnancy at all, but proven to lead to increased incidence of STDs, including AIDS.

References please?

I'm not the OP, but sure, you only have to google around for a bit:

"Teens Need Access to Contraceptives, Not Abstinence Messages, To Reduce Pregnancy, STD Rates, AAP Report Says" (AAP: American Academy of Pediatrics). http://www.medicalnewstoday.com/medicalnews.php?ne wsid=27083 [medicalnewstoday.com]

Original report here:

http://pediatrics.aappublications.org/cgi/content/ full/116/1/281 [aappublications.org]

Merck's spending breakdown

[compumike]

From their latest annual report [edgar-online.com], for fiscal year 2006: (all numbers in millions of dollars)

• Sales revenue: 22,636.0

So where does the money go?

• Manufacturing costs: 6,001.1
• Marketing & adminstrative costs: 8,165.4
• R&D: 4,782.9

Only 20% of the price of each pill goes toward future research and development... Marketing & administrative costs are double that. Ouch.

Re:humanity vs capitalism

[Anonymous Coward]

I live in Austin, TX, which is a very liberal town. Even in high school here, my class was taught that condoms could not protect against HIV transmission. The teachers claimed that condoms were like "nets" designed to trap sperm which are much larger than HIV. Their logic was that HIV would be transmitted through the holes in the net-like condom.

It was completely ridiculous. I really wish I had had the balls to call my teachers on their bullshit... But yes, sex education in the US sucks. If they aren't directly lying to students, like in my example, they are misleading them or omitting important facts. I shudder to think what students in more conservative rural areas are (or aren't) being taught.

Re:humanity vs capitalism

[wannasleep]

I'd like to point out that what Brazil did is actually legal under TRIPS [wto.org]. TRIPS is the treaty that regulates Intellectual Property world-wide. The same treaty under which so many other cases are prosecuted. One of the TRIPS provision states that a number of countries can exercise compulsory patenting on pharmaceuticals for a number of years (I believe 15, but I am not sure). It was done to lure many countries into the treaty.

Re:"Black Box" Drugs?

[Anonymous Coward]

In fact there are at least two such drugs. Premarin is actually made from Pregnant Mare Urine (get it) by a process that is a trade secret. No one is entirely sure which of the components of the final product are active and which aren't. As a result, last I checked (a couple of years ago), no one had successfully developed a generic. A similar situation exists for Thalidomide (which is now a very effective treatment for Multiple Myeloma and a somewhat less effective treatment for other cancers). The drug is in fact a pro-drug that is only active when metabolized by the liver. Unfortunately, the liver generates >100 different metabolites, some of which are very short-lived. No one actually knows which of these is active. As a result, development of analogs (which I have been involved in) has been significantly hampered.
P.S. those who say that FDA has anything to do with funding for clinical trials have no idea what they are talking. Typically, a company pays for ALL therapy-related medical care for trial participants, they pay for data managers at treatment centers, they pay for the physicians who treat the patients, they pay for tests, they pay their own data managers, their own trials managers, and finally, THE DRUG COMPANY pays the FDA to review their application (through user fees). In fact, I seem to recall having read recently that the approval process at FDA actually generates surplus revenue. Finally, during the trials process, before manufacturing is mass scale, drug costs can be hundreds of dollars a dose. By the time one factors in that only a fraction of drugs that begin trials are actually approved, it is easy to imagine drug approval costing hundreds of millions of dollars (even though the pivotal trial(s) itsel "only" cost ~$100,000,000--~10,000/patient * ~1000 patients.)

Re:humanity vs capitalism

[WCLPeter]

I find it funny to think that just because a person spent what amounts to 1/4 of their life in school to become a doctor, is simply doing it for the money. Particularly when being a doctor is among one of the most difficult professions to get into.

The 20 plus years a person has to spend in school to learn the craft, all the testing, the sleepless nights and grueling schedules. Not to mention the sheer cost of actually going to medical school along with the payback of the loan money in the end; to think they're only doing it for the money is naive.

Oh sure, I'm not stupid, I know some people foolishly put themselves through hell for the sake of the money. Let's face it, doctors make piles of cash. But on the other side of the coin, there are other, much simpler ways for highly intelligent people (which you'd have to be if you actually graduated and became a doctor) to make piles of cash in a much faster time span.

No, it can't simply be possible that people become doctors and put up with all the intensity and hard work because they have a natural desire to help people.

It's great that your relative was able to afford the 100,000 cost for his life saving surgery. I am truly happy for you that your relative is alive and well and got the best care possible for him. I just don't see how much of a life he's going to have though, what with the need to take on extra hours at work or even an extra job just to pay off the medical bills. Sure, he's alive but at what costs to living his actual life.

Contrast that with the Canadian way of doing things. Every single citizen can walk into any hospital in the country and be certain someone will look at them and run tests. If the Doctors find anything life threatening that puts you in imminent danger of dying, you're going to get taken care of right away. However, if they find something potentially life threatening, but you aren't going to die right away, you get to go on the waiting list.

This of course is where our health care system gets all it's "bad" press. People whining because it can be uncomfortable and the negative effects on their lifestyle while waiting to be treated. While Doctors here understand this, because everyone is covered for health care and the resources are finite they need to prioritize care. Doctors assess your condition to determine how dangerous it is and when you need life saving treatment, then they prioritize the waiting list based on that. Minor conditions you will wait quite a while to be treated for as they are often managed quite well with drugs and/or therapy until you have your surgery.

Major conditions will usually get you in faster, and if your condition changes so you are now in imminent danger of dying, you get bumped to the top of the list.

Sure, my taxes are probably a bit higher than yours to pay for our universal health care and I know I will likely be uncomfortable waiting to be treated should I need it. What I do know is that despite all the waiting, I'll eventually get taken care of and be able to go back to my life. What's even more comforting to know is I won't have to potentially lose my house, take on a second job, or leave behind an overwhelming debt for my family. For that kind of security, I don't mind popping a few extra pain pills or enduring a few extra tests.

Pete...

Re:humanity vs capitalism

[Anonymous Coward]

Stop saying bullshit The_Quinn. Humanity is much more important then profit.. You gotta understand this! Do you really wanna know why things are not invented here in Brazil? Is not because of what you said. It's because unfortunately brazilians are very burocratic people... They prefer papers than action... I know this because I'm brazilian and I see that people here since their childhood in their schools are trained to gather a lot of information just to end up working from a company... Schools here do not teach our children to became enterpreneurs, inventors etc. They just teach in a way that make every brazilian child believe that the only thing they can do in their future is to work on a company! Not to build one or to make something new! thats sad!