Patent Protection and Brazil’s HIV/AIDS Program

Published March 1, 2006

Brazil has rolled out a successful and widely respected AIDS treatment program, which has relied in part on producing cheap, generic versions of antiretroviral therapy (ART) and in securing significant discounts for patented ART.

Much of the success of Brazil’s AIDS treatment program can be traced to action by civil society groups, particularly gay rights organizations. In 1983, the Sao Paulo state health secretariat established the first AIDS program.

By 1990 the government introduced a national health care service, the Sistema Unico de Saude (SUS). In 1991, the government began to offer Zidovudine to people living with HIV/AIDS, and during the 1990s, a many-layered program of care, prevention, counseling, and treatment was developed through collaboration with civil society groups and religious organizations.

This development was greatly aided by major loans from the World Bank.

The program guarantees free access for the entire population to HIV prevention and care, including the diagnosis of HIV infection, the treatment of opportunistic infections, laboratory monitoring, and the antiretroviral medications necessary for the treatment of HIV infection itself.

Patent Law Passed

Brazil’s domestic generic drug manufacturers received a significant boost in December 1971 when the Brazilian government passed Law No. 5772 on Industrial Policy, which gave generic drug producers the right to produce on-patent drugs.

Brazilian law did not recognize patents for pharmaceutical products or processes until 1996, when legislation was introduced protecting the rights of innovators. The patent protection, which was granted only to products registered after 1996, is considered to be “quite strong since it provides for a 20-year product patent term, pipeline protection for products in the approval process, and basic biotechnology protections in accordance with [Trade Related Aspects of Intellectual Property Rights (TRIPS)].”

The TRIPS Agreement, according to the World Trade Organization, covers “not only patents but other areas of intellectual property” and “lays down not only the minimum substantive standards of protection that should be provided for in each of these areas of intellectual property, but also the procedures and remedies that should be available so that rights holders can enforce their rights effectively.”

Agreement Left Loophole

Legislation was introduced in Brazil in compliance with the TRIPS Agreement of the WTO. The TRIPS regulations allowed developing countries a period of five years (until January 2000) in which to introduce the regulations, and least-developed countries a period of 11 years (until January 2006). Brazil introduced TRIPS regulations in advance of its five-year grace period.

An objective for introducing the TRIPS regulation was to protect the rights of innovators and promote the dissemination of technology while at the same time balancing these rights with the needs of the consumers of that technology.

Because TRIPS seeks to harmonize patent regulations, many public health experts and activists feared the agreement would halt the use of and trade in cheap generic versions of medicines that were ordinarily patented elsewhere–putting “profits before patients.”

After considerable opposition to TRIPS from some WTO members and from activist groups, a Declaration on the TRIPS Agreement and Public Health was agreed to at the WTO Doha ministerial meeting in 2001. Among other things, the declaration noted the TRIPS Agreement “should not prevent Members from taking measures to protect public health. Accordingly, while reiterating our commitment to the TRIPS Agreement, we affirm that the Agreement can and should be interpreted and implemented in a manner supportive of WTO Members’ right to protect public health, and in particular, to promote access to medicines for all.”

Real Problem Is Poverty

Assuring that poor countries could import generic versions of patented drugs or issue compulsory licenses to ensure that those drugs could be produced locally was seen as a vital element in improving public health. In reality, the Doha Declaration is largely irrelevant, as the main reason that people in poor countries lack access to medicines has little do with drug patents and much more to do with poverty.

As some commentators pointed out at the time, “The power to import generics and issue compulsory licenses is of little use if the basic health infrastructure is unable to distribute the drugs and ensure good compliance with the drug regimens.”

A serious additional concern, which is directly related to the quality of ART, is the development of drug resistance. Although a 2004 review of primary HIV-1 drug resistance in Brazil found that “rates of primary drug resistance are still low when compared with those of developed nations,” Brazil began widespread provision of ART several years after developed nations had. (See “Saving Lives Today and Tomorrow: Ensuring Ongoing Research into HIV/AIDS Medicines,”.) It would therefore stand to reason that resistance levels would be lower than those in developed countries.

Research, Development Suffer

Despite Brazil’s long experience in manufacturing drugs, shelter from patent requirements has meant little research and development capacity. This will inevitably change, but in the transitional period, Brazil is reliant on private research-based pharmaceutical companies for new drugs.

Here Brazil and almost every other country providing ART now and intending to maintain treatment programs in the future face a significant problem. While the tactic of threatening to issue compulsory licenses seems to have paid off in the short run in Brazil with lower drug prices, the long-run effect in terms of reduced investment in research and development will probably be extremely harmful to existing and future generations of patients on ART.

Since 1997, the number of drug companies worldwide engaged in research on HIV/AIDS is down by around 23 percent, and the number of new molecules in development for antiretroviral drugs is down by around 30 percent. Research released by the Pharmaceutical Research and Manufacturers of America (PhRMA) last year confirms the number of companies engaged in AIDS research has increased by about 10 percent. While this increase is good news, it surely is a lot less than would be expected given the significant treatment funding being provided in the past year by the U.S. government, the Gates Foundation, the Global Fund, and others.

At a time when people living with HIV/AIDS require renewed research efforts and an increased commitment to develop new therapies, the decline and limited recent uptick of firms investing in HIV/AIDS drugs should be cause for concern.

Not Good for Export

The fact that Brazil’s health care system, health care spending, and rate of HIV prevalence are so dramatically different from those in sub-Saharan Africa makes any comparison of Brazil with this region largely meaningless. To promote the Brazilian model as workable and appropriate in sub-Saharan Africa is not only disingenuous, it is also mischievous and ignores the far more basic infrastructural problems that these countries face as well as their developmental realities, and may, moreover, lead to putting people on unsustainable HIV/AIDS ART regimes.

Although Brazil’s AIDS treatment program has recorded many notable successes, the aggressive stance that the country has taken in threatening drug patents and forcing down drug prices could weaken incentives for long-run development of new drugs. The government of Brazil has abused the spirit of international agreements such as the Doha Declaration to secure lower drug prices, even though these agreements were intended to secure lower prices for the poorest nations dealing with health problems such as HIV/AIDS.

Roger Bate ([email protected]) is a resident fellow at the American Enterprise Institute. Richard Tren ([email protected]) is the director of Africa Fighting Malaria. This article is adapted from a study originally published in Health Policy Outlook. Reprinted with permission.

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