Brazil is often singled out as an outstanding example of a developing nation with a successful program to slow the spread of AIDS. At the end of the 1980s, when Ziduvodine (AZT) was the only available treatment for people with AIDS, it was predicted that more than a million Brazilians would be infected with HIV by now, yet the most pessimistic current estimate indicates only slightly more than half that number, some 537,000, are infected, with some 210,000 classified as AIDS cases by the ministry of health.[1]
About 100,000 HIV-infected Brazilians are currently receiving anti-retroviral drugs (ARVs), including combination therapy (anti-AIDS cocktails) which make use of some of the newest drugs. Treating infected individuals with ARVs reduces viral load and there is thus a greater possibility of breaking the chain of HIV transmission from one person to another, principally through sexual contact.[2] There is little doubt that the drugs have reduced the number of deaths and hospitalizations due to AIDS, and allowed many people with AIDS to go back to work.[3] But these generally expensive medications are available to so many Brazilians only because the Brazilian government has made them available, distributing them via a national system of free health care, producing some ARVs in government laboratories, fending off legal challenges from the United States and international pharmaceutical companies that see Brazil’s production of AIDS drugs as a threat to their patents on the drugs, and pressuring the drug companies to sell other patented ARVs to the Brazilian government at reasonable prices.
Brazil’s achievement in slowing the spread of AIDS is not due solely to the discovery of new therapies and expanded access to treatment, of course. The government and a wide variety of non-governmental organizations (NGOs) have waged successful AIDS education and prevention campaigns. But undoubtedly, what makes the Brazilian case exemplary among developing countries is that the Brazilian constitution establishes health as a universal right to be guaranteed by a National Health System based on the principles of comprehensive service, universal access and social control.[4] In the case of AIDS, this has translated into a policy of drug distribution to meet the treatment needs of all individuals living with HIV/AIDS.
The willingness of the Brazilian government to take an active role in international debates on intellectual property, by defending the government’s right to pass patent laws that uphold what it believes to be Brazilian interests, has also played an important role in the success of the AIDS program. In 2000, the United States filed a complaint with the World Trade Organization claiming that Brazil’s patent policy violates the intellectual property provisions of the 1994 General Agreement on Tariffs and Trade. Brazilian officials charged that the real target of the complaint was Brazilian production of pharmaceuticals, including AIDS drugs, for which multinational drug companies hold the patents. The United States withdrew the complaint last June, following protests by AIDS activists and the issuance of a World Health Organization resolution declaring the right of poor countries to get access to AIDS drugs at reasonable prices.
But we are not witnessing a moral war between a well-intentioned adversary—the Brazilian government—on one side, and ill-intentioned ones—the United States and the drug companies—on the other. In reality, it is neoliberal political principles that are at issue. These principles give priority to the market as a regulatory force and seek to shape a globalized economy. This is a conflict between, on the one hand, a constitutional right that forces the state to respect a commitment to provide quality healthcare, and on the other, a free market philosophy that delegates to private initiative the provision of social security, health and education and gives intellectual property rights priority over public access to medicines.
When the Brazilian government made the policy decision to distribute drugs to all AIDS patients according to the criteria established by medical consensus, World Bank experts designated the adherence to this principle of universal access to health as the potential point of failure in the Brazilian AIDS program. World Bank predictions at the beginning of the 1980s had already declared the Brazilian universal health plan fiscally suicidal. For these experts, a public health system based on the universal right to access would lead to a budget disaster.[5] In more than one report published by the World Bank in the second half of the 1990s, ARV distribution was discouraged based on cost/benefit analysis which concluded that it would be cheaper to invest in prevention and that drug distribution in developing countries would be economically and structurally unviable.[6]
For Brazilian activists, however, any cost/benefit assessment that simply allowed people with AIDS to die without treatment was completely unacceptable. And they were energized by the knowledge that in some countries, such as South Africa, people infected with HIV were already 20% of the adult population.
AIDS activism emerged in Brazil in synergy with redemocratization of the country, which had been under military rule between 1964 and 1985, and with the organization of the National Health System, which was planned and developed with the participation of Brazilian social movements.
Beginning in 1991, the anti-retroviral AZT was distributed freely throughout the country.[7] Brazilian production of the drug began in 1993. In 1995, the Minister of Health declared it a policy to provide ARVs along with other drugs to treat the opportunistic infections which many people with AIDS experience.[8] In March of the following year, the Minister of Health established a technical committee to establish guidelines for the use of anti-retrovirals, including protease inhibitors.[9] In July 1996, at the XI International AIDS Conference in Vancouver, researchers presented the positive results of using combination anti-retrovirals. That same year, in November, the free distribution of AIDS drugs in Brazil was guaranteed by presidential decree.
National production of generic drugs—chemically identical to those made by the patent holder—is critical to the successful results of this program, because ARVs would be unaffordable if the government had to purchase all of them at the prices set by the international drug companies that hold the patents. But the manufacture and distribution of generic medicines in Brazil is not restricted to AIDS drugs. There has been production and distribution of generic medicines for illnesses such as tuberculosis, sexually transmitted diseases (STDs), malaria and others.
In the case of AIDS, seven of the 13 drugs that make up the ARV combination therapies are being produced by the Brazilian pharmaceutical industry. The Brazilian patent laws put into effect in 1996 do not cover some of these drugs, the ones whose use was approved in Brazil before that date, and they can therefore be manufactured as generics in Brazil. The 1996 laws, passed after significant pressure from the United States, provide for exclusive rights to the production and marketing in Brazil of a patent holder’s product for 20 years, on average. Many analysts note that this creates marketing exclusivity—a monopoly—on some products that are then sold at excessively high prices. As a result, access to medicines becomes much more limited.
Nevertheless, one article of the 1996 law stipulates that if the patent holder does not manufacture the patented product in Brazil, within a space of three years following patent registration, the government can authorize production by another company (compulsory licensing) or import the product from a producing country (parallel imports). Another article provides that compulsory licensing and parallel imports of products can be authorized in cases of national emergency or public interest.[10]
National drug production and the possibility that compulsory licensing can occur has allowed the Brazilian government to avoid becoming hostage to the international pharmaceutical companies by facilitating fairer negotiations over drug pricing. For example, in the negotiations between the Brazilian government and the companies producing the ARVs Efavirenz and Indinavir, prices were successfully reduced by 64% and 77%, respectively. Among nationally manufactured drugs, a reduction of 58% was achieved for Nevirapine and 95% for Zalcitabine (ddC).
Generally, prices for generics or similar drugs have dropped an estimated (continued on page 40) 70%. Additionally, even if the drug prices do not have an accentuated decline, they at least tend to stabilize. For example, in 1999, $336 million was spent on ARVs to treat approximately 73,000 people with AIDS enrolled in the government distribution program. In 2000, 85,000 AIDS cases were treated with expenditures on medicine falling to $303 million. In 2001, an estimated 100,000 people will be treated with no increase in drug costs from the previous year.
The effect of patents on public expenditures for ARVs can be seen in the example of the two medicines that are under patent protection, Nelfinavir and Efavirenz. Those two drugs consumed approximately 39% of the total allocated for acquisition of ARVs. Yet 59% of expenditures go to imported medicines that make up only 44% of the drugs used in combination therapy; the remaining 56% are purchased from national producers. Thus, the most money is spent on the smallest piece of the pie.[11]
The negotiations between the Brazilian government and the drug companies have occurred against a background of heated international debate about intellectual property laws and their role in international trade agreements. U.S. government pressure on countries to amend patent laws like Brazil’s which do not conform to U.S. standards is not based on the necessity of legitimizing itself as a the greatest economic power in the world, but fulfills the more immediate need of defending U.S. technology and industry. In that sense pharmaceutical companies exercise significant influence. But it is clear that this is not an isolated position. Other developed countries with significant technological and industrial production support international accords such as the Agreement on Trade Related Aspects of Intellectual Property (TRIPS) that favor recognition of intellectual property for industrial products through patenting.
But there also are some developing countries that in an incipient way have achieved some degree of success in one or another area of technology and are interested in patenting their products. [See “Cuban Biotech Booms,” p. 38] Additionally, the potential for boycott of Brazilian products by the United States, a large importer, is not an empty threat, and encouraged the Brazilian government to enact a national patent law. Nevertheless, the possibility of competing with developed countries, which was never very great, is increasingly limited since patents further inhibit the potential for technology transfer from rich to poor countries. Thus, patent protection generally has the effect of exacerbating inequality between rich and poor countries.
The pharmaceutical companies argue that patents, and consequently the monopoly pricing that is often considered abusive, are necessary for technological development. Patenting a product is the means for injecting resources into research for development of new products and technologies. Thus, the price of a product, whose patent can only be worked (or marketed) by its holder, includes the costs of its development—which involves many tests and clinical trials in the case of medicines—and marketing, one of the largest expenses for the drug companies.[12]
Undoubtedly, developing a new medicine or new technology is costly, and no one expects that pharmaceutical companies will convert from one minute to the next to simple humanitarian motivations. But to the limited extent that the pharmaceutical industry is disposed to make its cost accounting public, there is a strong impression that scientific development is being used as a pretext for justifying monopoly, exclusive marketing and the unfettered search for profits. This is even more disturbing considering the fact that in wealthy countries like the United States, in addition to private investment, significant public resources are invested in new drug discovery and in efficacy and safety tests. And a key question remains unasked when the intellectual property provisions of trade agreements are negotiated: What does it mean to retain exclusive rights to produce and sell a particular drug in the face of an epidemic causing millions of deaths, when it is known that that drug can save the lives of so many? Thus, patent protection is paid for with human lives. Should this be the price of intellectual property?
In May 1999, the World Health Assembly approved a resolution that exhorts countries to “review and revise their options in international agreements, including trade agreements, to safeguard access to essential medicines.” But the fact that a country has a specific law does not mean that distribution of medicines is a fully consolidated right. In August of that year, Brazil’s Ministry of Health sought a budget increase for purchasing medicines to cover the gap in resources created by the devaluation of the real. It took NGO mobilization throughout the country to pressure the Treasury into releasing the funds. The same problem arose in November 2000, with the same result. These situations showed the importance of local drug production in maintaining free distribution, which otherwise can be undermined by exchange rate fluctuations or foreign producers who set drug prices higher than can be covered under limited government budgets.
By 2000, public and private pharmaceutical laboratories in Brazil had the capacity and technology to produce seven of the 12 ARVs that are distributed through the public health network. In July of the same year, the XIII International AIDS Conference in Durban, South Africa focused on the devastating effects of the epidemic on the African continent and the issue of the cost of drugs and access to treatment for populations in the developing world. The Brazilian AIDS program was singled out for praise for its policy of free distribution of medicines to all patients.
In January 2001, the U.S. government challenged the Brazilian Patent Law before the World Trade Organization. The principle argument was that the compulsory licensing provision of the law violated TRIPS and impeded patent holders from developing products in Brazil. In February, however, the Brazilian Minister of Health announced the intention of the Brazilian government to issue compulsory licenses for two patented ARVs (Nelfinavir and Efavirenz) for public interest reasons if the pharmaceutical companies did not reduce the prices. This would make it possible for other manufacturers to produce the drugs in Brazil. In March, an agreement signed by the Brazilian Ministry of Health and Merck Sharp & Dohme led to significant reductions in the prices of Efavirenz and Indinavir. As of this writing, discussions were still underway with the Swiss company Hoffman-La Roche, which has exclusive rights to market Nelfinavir.
Meanwhile, on the international plane, a pool of 39 pharmaceutical companies filed suit against the South African government to stop it from importing from third countries generic versions of ARVs that were covered by patents in South Africa. Debates over patents and demonstrations by activists proliferated throughout the world. On March 5, 2001, the date of South Africa’s trial, there were mobilizations in many countries. In Brazil, the NGO/AIDS Forum of São Paulo organized a protest in front of the U.S. consulate in the state capital. In April, fearing greater damage to public opinion, the pharmaceutical companies withdrew the complaint against the South African government.
The positions of the U.S. government and the international pharmaceutical industry in Brazil also met strong opposition throughout the country, as well as in other parts of the world. In May 2001, at the ninth NGO National Meeting in Recife, Brazil, 250 delegates working in the AIDS field organized a march to the U.S. consulate to express opposition to the U.S. government complaint against Brazil filed before the WTO, requesting that it be withdrawn.
Brazil presented a resolution to the Human Rights Commission of the United Nations in the context of the AIDS epidemic which called for making appropriate medicines available at accessible prices. The motion received the support of 52 countries with only one abstention: the United States. Brazil’s leadership role among underdeveloped countries intensified multinational pharmaceutical companies’ fears that it could serve as an example to other countries considering promotion of local production of generic medicines.
In June of last year, more demonstrations demanding the withdrawal of the U.S. WTO complaint against Brazil took place in the cities of Salvador, Rio de Janeiro, and Brasilia. Then a joint statement from the U.S. and Brazilian governments announced the U.S. withdrawal of its WTO complaint. For its part, the Brazilian government agreed to notify the U.S. government prior to issuing compulsory licenses for patents held by North American companies, to allow adequate time for conversations on the subject.
But given the heated international debate on patents and the price that many countries and individuals pay for treatment due to trade and intellectual property rules, we are still facing impasses that require immediate solutions. What status will be given to the new drugs that will form part of the ARV cocktails? How will the medicines that are still under patent and weighing on the public purse be handled?
It is clear that current developments, such as the U.S. withdrawal of the WTO complaint against Brazil, depend on continuing public pressure. We can’t have the illusion that future government policy decisions will be in accord with past actions, especially considering the countervailing pressures on governments to impose economic structural adjustment policies. With the AIDS program, the Brazilian government is in a delicate position as it defends the implementation of universal anti-retroviral distribution and generic production of medicines at the same time that it follows international economic policy directives that obligate cuts in social spending and privatization of public enterprises like the drug production center.
In this context, it’s clear that the withdrawal of the U.S. WTO complaint against Brazil does not signify a final Brazilian victory; rather, it is a cease-fire. There is no guarantee that the United States will not renew its WTO complaint against Brazil. And Washington will promote its position in other arenas of negotiation, such as in the Free Trade Area of the Americas (FTAA) and in new rounds of TRIPS negotiations. Furthermore, the agreement that ratified U.S. withdrawal of the complaint does not define the rules for consultation with the U.S. government in the case of a compulsory license or parallel import, which is risky from the point of view of national sovereignty.
Brazil must review its patent laws in order to participate actively in future revisions of the TRIPS agreement, always in the interests of promoting national public interest against international pressure from rich countries and industries. This is a great challenge, which will require mobilization and participation from diverse social sectors, including academia, and the private sector, not just one or two isolated social movements. The relevance of the debate on patents is not limited to AIDS groups and the Health Ministry. It involves the future of many Brazilian public issues, including the life of its citizens, national intellectual property and natural resources, among others. Successful defense of Brazilian citizens’ interests in international trade agreements depends on an organized civil society, an increasingly democratic state with greater commitment to the public interest and less commitment to private interests, international financial businesses and agencies, or the governments of other countries.
The next time the battle is joined for the right to produce generic medicines to break the monopoly held by the large international companies it could be over something that does not involve AIDS, which has a politically mobilized constituency, but some other illness that does not get public attention. But the visibility achieved by the anti-AIDS social movement and the urgency of the issues imposed by the epidemic are bringing together varied interests, including activists who are engaged on other fronts, such as the question of genetically modified food crops, and all that seek more democratic and inclusive trade agreements. Some of the lessons gained from struggles for access to AIDS treatment, including the recent polemics involving patents for anti-retrovirals, can be useful for understanding processes related to intellectual property in other areas, including agriculture and the manufacture of other types of pharmaceuticals and vaccines. The struggle for access to medicines, couched in the vocabulary of patents and international trade, underscores the exclusionary process by which agreements on trade and intellectual property are currently reached.
ABOUT THE AUTHORS:
Carlos Passarelli is a psychologist and project adviser of the Brazilian Interdisciplinary AIDS Association (ABIA). Veriano Terto Jr. is a psychologist and general coordinator of the ABIA.
Translated from Portuguese by Judy Rein.
NOTES:
1. According to the Ministry of Health, at the end of 2000, the country had 210,452 AIDS cases, 74% (155,792) in men and 26% (54,660) in women (Ministry of Health, Boletim Epidemologico AIDS, Ano XIV, no. 1, 1st through 13th weeks, January to March 2001). The National STD/AIDS Committee (CN DST/AIDS) estimates that there are 537,000 Brazilians infected with HIV, of which 100,000 receive medicines to treat AIDS. See http://www.aids.gov.br
2. Viral load is the amount of HIV genetic material (RNA) found in the plasma of infected individuals.
3. The CN DST/AIDS website indicates that there has been a 50% decline in AIDS related deaths throughout the country, and a 71% drop in the State of São Paulo. The decline in hospitalizations due to opportunistic infections reached 80%. See http://www.aids.gov.br
4. Federal Constitution, Title VIII, Chapter II, Section II, Articles 196 to 200. The federal law regulating the health system is number 8,080, September 19, 1989.
5. Ruben Mattos et al., O Banco Mundial e a AIDS, (Rio de Janeiro: ABIA, 2001).
6. World Bank, “Confronting AIDS,” 1997.
7. The Secretary of Health in the State of São Paulo began distributing AZT for free in 1989.
8. The ARVs are AZT and Didasonine (ddI). The drugs that treat opportunistic infection are Gancyclovir, fluconazole, pentamidine, acyclovir and anphotericine B.
9. Jorge Beloqui,”Para uma palestra sobre medicação de AIDS,”in Treinamento: Temas para discussão (Rio de Janeiro, ABIA, 1998).
10. A large part of the information on drug patents was obtained from material produced by the Brazilian office of the British NGO OXFAM, which has a global campaign (Cut the Cost of Medicines) to expand access to drugs. See OXFAM, 2001, http://www.oxfam.org.uk.
11.The data on prices for medicine comes from the CN DST/AIDS website. See http://www.aids.gov.br/
12.There are many difficulties in obtaining information on the cost of drug development, since it is usually restricted in many cases by the pharmaceutical companies themselves. In addition to OXFAM, other international NGOs are dedicated to studying and disseminating this information. We suggest the website for the Consumer Project on Technology, see
http://www.cptech.org
which has an extensive bibliography and discussion on intellectual property and patents.
