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Compulsory patent licenses for AIDS drugs: the beginning of an international trend?
April 26, 2007

The global concern over the spread of AIDS, particularly in developing countries, is prompting some countries to take action to make patented drugs more accessible to its citizens. Earlier this year, Thailand decided to "break," or require a compulsory license to, the patent for Efavirenz, marketed as Sustiva® and Stocrin®, patented by Merck (Orange Book entry). Thailand has also now enacted legislation to compel a license to Kaletra®, patented by Abbott Laboratories (Orange Book entry). This allows generic drug companies to make and sell generic versions of these drugs in Thailand even in though the drugs are patented, although such licenses can only be required in certain circumstances in WTO member countries under the TRIPS agreement.

In response, Abbott has threatened to stop launching new drugs in Thailand, including an updated version of Kaletra®, Aluvia. The drug companies have also reduced their prices for the drugs in various countries in order to get Thailand to reconsider its decision and to prevent other countries from following suit. For example, Kaletra® now costs about $500/year per patient in sub-Saharan African countries, $1,000/year per patient in "low-middle income" countries (including Thailand), and approximately $8,000/year per patient in the United States. However, Thailand has decided to continue the compulsory licensing scheme, even in light of the price reductions. In addition, Brazil is now taking initial steps toward compulsory licensing for Efavirenz.

The back-and-forth between these countries and drug manufacturers represents an ongoing battle between recouping the research and development costs for new pharmaceuticals with the need for massive amounts of these drugs to fight the AIDS epidemic where it spreading most quickly: poorer, developing nations.

Update (5/4): Brazil is expected to begin compulsory licensing of Efavirenz today.

Update (5/7): As expected, Brazil instituted compulsory licenses of Efavirenz, a move that will likely benefit several Indian pharmaceutical manufacturers.

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