Francisco Viegas Neves da Silva ¹ ; Ronaldo Hallal² and André Guimarães ² International Cooperation Unit ¹ Care and Quality of Life Unit ² Department of STD, AIDS and VH Secretariat for Health Surveillance Ministry of Health Compulsory License and Access to Medicines: Economics Savings of Efavirenz in Brazil XIX – International AIDS Conference (Washington - July/2012)

Brazilian Health System 1988’s Constitution – “Health is a citizens right and a duty of the State” Universal Access to ARV Law issued in 1996 Strong participation of Civil Society in the National HIV response Industrial Property Law 1996

Efavirenz background Patented in Brazil in ( PP and PI ). Main patent expires in August/2012. (pipeline) 75 thousand patients on EFV in In 2007, after more than 8 price negotiation meetings the patent owner initially offered a price of US$1.59 per pill at the end offered a price reduction of 30% (US$1.11 per pill). At the same time the patent owner was supplying EFV to Thailand at the cost of US$ 0.65 per pill. Brazil considered this unacceptable.

Ordinance 886 of the MOH of Brazil (24/april/2007) – public interest. Presidential Decree nº (04/may/2007) –”compulsory license, on the ground of public interest, of Efavirenz’s patents, for public non-commercial use” - Duration: 5 years, allowing extension for equal period - Royaltiy fee for the patent owner (1,5% on the cost of the finished product) - Patent owner obligated to transfer knowledge and information necessary to reproduce the patented medicine Renewal of CL by the Decree nº (04/may/2012) Compulsory License legal framework

What is a compulsory license? Compulsory licensing is when a government allows someone else to produce the patented product or process without the consent of the patent owner. A royalty fee is paid to compensate the patent owner. It is one of the flexibilities on patent protection included in the WTO’s agreement on intellectual property — the TRIPS (Trade-Related Aspects of Intellectual Property Rights) Agreement. (Source: World Trade Organization)

CL National production Effects of the Compulsory License

Evolution of prices EFV 600mg CL National production

Total patients and costs of EFV

EFV 200mg annual cost per patient 1999 = US$2,544 (inclusion) 2007 = US$259 (after CL) 2012 = US$107 (international suppliers) EFV 600mg annual cost per patient 2003 = US$772 (inclusion) 2007 = US$ (after CL) 2009 = US$279 (national production) 2011 = US$294 Explanation

Table

Conclusion Total savings from with the Compulsory License was around US$ 103,600,000. (includes savings of EFV 200mg) With the Compulsory License Brazil has saved 58,47% buying from generic suppliers.

International prices are still lower than the ones offered to Brazil; Intellectual property is a significant element of price negotiation; It is necessary the full use and implementation of TRIPS flexibilities such as Compulsory Licenses to increase access to medicines. Brazil has shown that increasing access is more important than economics. Challenges and conclusion

Obrigado! Thank you very much!