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Reducing Medicine Prices in Brazil: TRIPS Flexibilities and Compulsory Licensing Examples

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This article explores Brazil's innovative use of TRIPS flexibilities and compulsory licensing to lower medicine prices and enhance healthcare access. We discuss the constitutional framework for health as a citizen's right and analyze specific cases, such as the Efavirenz compulsory license, which achieved significant cost savings for antiretroviral therapy. By evaluating Brazil's legal context, health system participation, and impact on public health, we shed light on the critical role of legislative measures in overcoming pharmaceutical patent challenges.

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Reducing Medicine Prices in Brazil: TRIPS Flexibilities and Compulsory Licensing Examples

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  1. TRIPS flexibilities and examples which resulted in reduced medicine prices: Model legislation and compulsory licensing in Brazil • Juliana V. Borges Vallini

  2. Brazilian Context • Health system with universal access to the population; • Constitutional concept of "health" as global welfare - citizen's right and duty of the state - Structured Programs (HIV / AIDS, hepatitis ,...) • HIV/Aids Free and universal access law - 1996 – centralized procurement – MoH (only buyer) - budget 2008 = US$ 640 million • December 2008 - 190.000 people on ART

  3. Brazilian Context • Fundamental human right • Incorporation into domestic law: the obligation to grant patents for medicines – TRIPS • Obligation of countries to accept the granting of patents for pharmaceutical products and its processes.

  4. Health Sector Participation • National level: • involvement of the health sector in the analysis of the applications of pharmaceutical products and processes - the prior consent of ANVISA; • Active participation in the Interministerial Group of Intellectual Property - GIPI • Health sector at international meetings.

  5. Brazilian Law (9.279/96) – Previous Consent Art. 229-C. The granting of patents for pharmaceutical products and processes depend on the prior consent of the National Agency for Sanitary Surveillance - ANVISA. • Maximum 120 days to analyze. 4% not granted • It’s not a linkage. • Some cases: • Valcyte: no novelty; Ritonavir: no novelty; Taxotere: process to product

  6. Possible consequences for public health of a frivolous patent • Restriction of access to medicines. • Improper payment of royalties. • Abuse of the exclusive exploration of the subject of the patent. • Undue protection for inventions that do not have the patentability criteria. • What about patentability criteria? Second use and new formulations?

  7. Access and prices. • Many prices in other countries are still lower than Brazil negotiates. • IP as an element of prices definition. • Necessary use of the flexibilities. • The important role of Judiciary . • Competition law. • Subsidies to consideration: as in the Tenofovir case.

  8. Proportion - Expenditure with ARV, 2007 * *2007 – dados preliminares

  9. EFV, LPV/r e TDFEstimated savings with local production Source of data: PN-STD/AIDS and Far-Manguinhos; includes a yearly depreciation rate of 10% for EFV and LPV/r in 2006-2009 and 5% in 2010 300.00 Total potential savings (2006-2010): US$ 645,560,000 242.40 250.00 222.39 Saving: US$ 167,54 198.89 200.00 Saving: US$ 152,38 172.48 Saving: US$ 131,17 Expenditures (In US$ million) 147.47 150.00 Saving: US$ 107,79 100.00 Saving: US$ 86,69 74.86 70.01 67.72 64.69 60.78 50.00 0.00 2006 2007 2008 2009 2010 FONTE: MS/SVS/PN-DST/AIDS Expenditure estimated as result of local production (Far-Manguinhos) Expenditure estimated using 2005 prices paid by MOH for branded products

  10. Compulsory License in Brazil (L. 9.279) • Abusive exercise of patent rights (art. 68); • Abuse of economic power (art. 68); • Non-exploitation of the subject matter or the patent in the territory of Brazil (art. 68, § 1, I); • Commercialization that does not meet the market needs (art. 68, § 1, II); • dependency of one patent on another (Article 70); • Public interest or national emergency (art. 71) - Decree No. 3.201

  11. Efavirenz • Most used imported ARV – 75,000 patients • Long negotiation process – price stable since 2003 - US$ 1,59/tb • Thailand – 1,2% prevalence • 17,000 patients – US$ 0,67/tb • Annual cost - from US$ 580.00 to US$166.36 • Estimated “savings” until 2012 - US$ 237 millions In 2007 – from US$ 42 millions to US$ 12 millions • National production in 2009

  12. Why an Compulsory License? • Patent pipeline; • Public interest and feasibility of STD and AIDS; • Prior negotiation with the patent holder. Saving $ 30 million / year; • A clear example of the relationship between patent - Price - access.

  13. Efavirenz Case • Portaria 886, April 24th 2007 - Public Interest • Decree No. 6108 of 4 May 2007 - granted compulsory license for public interest, patents relating to Efavirenz, for public non-commercial use; • Duration and the possibility of extension.; • Patent holder - remuneration; • Patent holder must provide the necessary and sufficient information for the reproduction of the object; • Exploitation of the licensed patent: directly by the Government or by third parties (contracted)

  14. Compulsory license The case of the compulsory license of Efavirenz in Brazil http://www.aids.gov.br/data/Pages/LUMISE77B47C8ITEMIDF1F682AB8B064551A91E90EF1DA9C3EBESIE.htm http://www.aids.gov.br/portalaids_services/data/Pages/LUMISE77B47C8ITEMIDE6C4A510A6EC4CA7A9F48F517BBDB01CESIE.htm

  15. Other challenges for price negotiation 2009 TDF = US$ 42 millions = 14,7% budget imported ARV

  16. Tenofovir 1st line ARV – increase fastly - 33,000 patients Patent deposited in Brazil in1995 Opposition MoH declared it of public interest in April 2008 Brazilian Patent Office does not grant the patent (2009) HIV/Aids and hepatitis B. • Brazil – US$ 3.25/tb = US$ 1,186/yr • Thailand – US$ 1,24/tb = US$ 454/yr CIPLA – prequalified – US$ 0,43/tb = US$ 157/yr

  17. Technological Network on HIV/AIDS • Argentina, Brazil, China, Cuba, Nigeria, Russia, Thailand, Ukraine. • Production of anti-retroviral medicines and other medicines for treatment and prevention of opportunistic infections, aiming at the universal access, price reduction and the effective and rational use of generic medicines. • IP elements.

  18. Challenges for all of us • Expand access to fair prices – review of present criteria (differential price policies?) • Use of the flexibilities provided by the declaration of the Doha on TRIPS and Public Health – support from partners and WHO. • WHA 2008 – Global Strategy on Innovation, Public Health and Intellectual Property – put it into practice... • The need for cooperation and exchange of information among the developing countries.

  19. Mind the Gap!

  20. Thank you! Email: juliana.vallini@aids.gov.br

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