Abbott, Brazil in AIDS pact - Price of Kaletra drug to be slashed

Abbott, Brazil in AIDS pact - Price of Kaletra drug to be slashed
By Bruce Japsen
Copyright © 2007, Chicago Tribune
Published July 6, 2007

For more than a year the world's pharmaceutical giants have been battling to protect their patents in the face of threats by developing nations to make their own cheaper generic prescriptions if drugmakers do not cut their prices.

In what appears to have averted a potentially messy dispute with Brazil, North Chicago-based Abbott Laboratories confirmed Thursday that it has reached an agreement to sell its popular AIDS drug Kaletra to Brazil at a 30 percent discount from the previous price.

Abbott said Brazil agreed to the same $1,000-a-year price it offered earlier this year to that country and 44 other low-income and middle-income nations.

The agreement is significant because Brazil is one of an increasing number of countries playing hardball with the drug industry over prices they pay to treat their citizens who have HIV, as well as over costs for other medicines.

In May Brazil broke a patent held by Merck & Co. on its AIDS drug Stocrin by agreeing to import a cheaper generic version from a company in India. Brazil has threatened to take such actions against Abbott in the past.

Brazilian health officials, at a contract signing ceremony Wednesday in Brazil, cheered Abbott's move, while criticizing Merck for not coming to the country's terms two months ago. "Abbott created a positive atmosphere of discussion and cooperation with the government, which allowed us to reach an agreement," Brazil's Health Minister Jose Gomes Temporao told reporters alongside Abbott officials in Brasilia. "Other laboratories should follow Abbott's example."

Merck said Thursday it was "hopeful to reopen dialogue with the Brazilian government."

Brazil will now pay 73 cents a pill this year and 63 cents next year for Kaletra, compared to the $1.04 per pill that it has been paying, Abbott said. In the U.S. the per-pill price is generally over $5, or about $8,000 a year per patient.

Abbott remains at odds with Thailand in a high-profile dispute that has drawn the ire of the international AIDS community. Thailand has threatened to make generic copies of Kaletra, effectively breaking Abbott's patent protection.

In reaction Abbott has said it would not launch any new medicines in that country. "We are still in discussion with Thailand over making Kaletra tablets available there," said Abbott spokeswoman Jennifer Smoter.

Abbott over time has reduced the price of Kaletra offered to Thailand from $2,200 to $1,000 -- the same discount the company has provided since April to other developing countries.

Several AIDS groups have been protesting Abbott's moves in Thailand, suggesting that withholding the latest version of Kaletra -- which does not require refrigeration in its hot climate -- is putting patients' health at risk.

An Abbott official said the Brazil deal is good for participants.

"We wanted Brazil to benefit from the same price we offered to other countries with its level of economic development," said Heather Mason, Abbott's vice president of Latin American and Canadian operations. "The signing of this agreement symbolizes what can be achieved when governments and companies negotiate with the interests of patients in mind."

One leading U.S. AIDS group said Abbott and other drugmakers have a long way to go when it comes to its pricing practices.

"This 30 percent price reduction on top of Brazil's previously-negotiated 46 percent discount underscores to anyone who understands the most basic of mathematics just how random and arbitrary AIDS drug pricing by multinational drug companies can be," said Michael Weinstein, president of Los Angeles-based AIDS Healthcare Foundation.

Two years ago Abbott lowered the annual price of Kaletra to about $1,500 per patient per year in Brazil after the country threatened to break its patent. "[The price reductions] may seem significant for Brazil, but we still believe Abbott -- like most pharmaceutical companies -- can do far, far more to improve pricing and access to their lifesaving AIDS drugs around the world," Weinstein added.

Abbott bristles at the notion it is not doing enough for people with HIV around the world. Last week it said Chief Executive Miles White dedicated a regional hospital laboratory in Tanzania as part of $50 million in aid it and its foundation have given since 2001 to "improve Tanzania's health system and fight AIDS," a spokesman said.

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bjapsen@tribune.com



Lower cost for medication 73 cents

What Brazil will now pay per pill. It has been paying $1.04.

63 cents

What Brazil will pay next year under the Abbott deal.

$5-plus

Per-pill price for the AIDS drug in the U.S.