The continuing rise in the number of AIDS/HIV infected patients, especially in the developing world, has created an immediate need for accessibility to AIDS drugs at cheaper prices. However, there are dangers in the Brazilian government's approach. Disregarding AIDS drugs' patent protection could well discourage companies' investment in AIDS-related R&D.
Following the standoff between South Africa and multinational pharmaceutical companies over the price of AIDS drugs, the conflict is resurfacing. This time, the Brazilian government claims the price of Roche's Viracept (nelfinavir) is "abusive". Last week, it demanded that Roche reduce the price of Viracept by at least 40%, saying it would produce its own low-cost version otherwise. Viracept is one of the 12 cocktail anti-viral drugs used for the treatment of AIDS.
While disputes between pharma companies and poorer countries are nothing new, this is the first time a developing country has gone as far as threatening to produce a generic without the authorization of the patent holder. The outcome of this confrontation could be decisive in the wider controversy over the price of AIDS drugs in poor countries. It will certainly promote further scrutiny of AIDS drug prices, putting the pharmaceutical giants in a vulnerable position where they are accused of putting profits before people's lives.
Yet despite the need for cheaper AIDS drugs in poorer countries, this trend could create problems. Many poor countries lack the infrastructure to make medicines accessible to those who need them, even if they are cheap. More importantly, cheaper pricing policies for poorer countries may result in revolts in the west, encouraging the leakage of cheap generics back into rich countries. Particularly if this happened, the reduced returns would encourage the industry to cut its R&D investment in the AIDS market, leaving everyone worse off.
In the short term, the disagreement with Brazil will create further pressure over access to AIDS drugs in other developing countries such as China. Recently, China admitted that it is facing a serious HIV/AIDS epidemic with a 67% increase in cases over the last year. China has been in talks with GlaxoSmithKline and Merck over the prices of AIDS treatments. GSK, which makes Epivir, Retrovir and Combivir, has stated that it agrees prices needed to be reduced, although no agreement has yet been reached.