Long before the 2001 Doha ministerial meeting of the World Trade Organization (WTO), Brazil and the United States were engaged in their own intellectual property trade dispute. Although Brazil introduced TRIPS regulation more than three years before the January 2000 deadline, the patent regulation contained the provision that a patent would be granted only on products manufactured in Brazil. Article 68 of Law No. 9.279/96 would allow the Brazilian government to issue a compulsory license for the local generic production of a medicine should the patented product not be manufactured within Brazilian territory within three years of the issuance of the patent.
In the opinion of the Office of the U.S. Trade Representative (USTR), the provisions in Article 68 conflicted with Articles 27.1 and 28.1 of the TRIPS Agreement, which ensure nondiscrimination in the protection of patents and exclusive rights of patent holders. In February 2001, the United States therefore filed a complaint against Brazil through the WTO, but decided to drop the case in June of that year. Instead of seeking to resolve the issue through the WTO, both Brazil and the United States decided to use the newly created U.S.-Brazil Consultative Mechanism in order to seek, in the words of then U.S. trade representative Robert Zoellick, “creative solutions.”
The Brazilian ambassador to the WTO, Celso Amormim, had previously warned the U.S. opposition to Article 68 of Law 9.279/96 was “not only legally unfounded. It may also prove politically disastrous.” The political pressure against the United States and in favor of Brazil was indeed significant. Numerous AIDS activist and leftist pressure groups strongly supported the Brazilian approach. The U.S. government was widely portrayed as attempting to undermine Brazil’s free AIDS treatment approach, and the United States withdrew from the WTO case. Paul Davis of Health Gap Coalition noted, “I think this is a tremendous victory for the Brazilian people and for people with AIDS worldwide.”
In July 2003, an administrative rule issued by the Brazilian minister of health began proceedings to issue a compulsory license for the production of three antiretroviral medications: Lopinavir/Ritonavir, Efavirenz, and Nelfinavir, patented by Abbott, Merck, and Roche Laboratories, respectively. The compulsory license was to be issued to state-run manufacturer Instituto Far-Manguinhos.
On December 1, 2004, in the face of rising costs of drug treatment, Pedro Chequer, the head of the Brazilian AIDS program, announced the country would break patents in 2005 in order to contain costs. On March 14, 2005, the government of Brazil asked three research-based companies–Merck, Abbott Laboratories, and Gilead–to grant it voluntary licenses for specified drugs produced by these companies.
In July 2005, Abbott reportedly reached an agreement with then Brazilian minister of health Humberto Costa on price reductions on their AIDS drugs. This deal, however, was not recognized by Costa’s replacement, Jose Saraiva Felipe, who took over Costa’s position shortly after the agreement was reached. In October 2005, Felipe announced a new agreement had been reached with Abbott, and on November 30 the CEO of Abbott editorialized in the Financial Times confirming an agreement but stressing that continued attacks on patents would weaken future research and development.
The Brazilian government is reported to be continuing its negotiations with both Merck and Gilead. Pedro Chequer characterized the current pricing as “absolutely abusive.”
— Roger Bate and Richard Tren