COMPULSORY LICENSED DRUG - EFAVIRENZ - WILL BE MANUFACTURED BY PUBLIC BRAZILIAN LABORATORIES BY THE END OF 2008

MERCK SHARP & DOME markets, under the brand name EFAVIRENZ, the most used drug in Brazil against HIV/AIDS. In a universe of 200.000 Brazilians infected with this disease in, approximately 80.0000 take this drug.

This drug is present in the Anti HIV/AIDS Cocktail offered without costs to the Brazilian infected patients by means of the renowned Public Program so-called “National Program for Sexually Transmitted Diseases/AIDS”. This Program is led by the Brazilian Ministry of Health.

The Ministry of Health argues that Brazil spent almost USD $ 43.000.000,00 with EFAVIRENZ in the year 2007, paying US$ 1,59 per each pill. The estimated cost of this drug to the “National Program for Sexually Transmitted Diseases/AIDS” amounts to US$ 580,00 per patient per year. Considering these numbers, in 2007, the Brazilian government attempted to reach a satisfactory agreement with MERCK SHARP & DOME, proposing the payment of a price comparable to the one practiced by this company in Thailand, i.e., US$ 0,65 per pill, where the public expenditure with EFAVIRENZ does not surpass USD $ 245,88 per patient.

MERCK SHARP & DOME did not accept the proposal of the Brazilian government to use the same financial terms as those used in Thailand, even after several attempts to come up with an agreement.

Due to this unsatisfactory outcome, the Brazilian government published the Decree no. 6,108 dated of May 4th, 2007. It determined the compulsorily license of EFAVIRENZ patents PI 1100250-6 and 9608839-7, based on the public interest principle. This license was destined only to the public and non-commercial use of the drug, and aimed to attend the aforementioned local HIV/AIDS Program. The time frame of the license was set to be 5 years.

It was further determined that EFAVIRENZ would be manufactured by laboratories of governmental institutions. Since then, Brazil had to import a generic version of EFAVIRENZ from India, at US $ 0,48 per pill, to supply the internal need. This measure was indispensable since the selected public institution to produce the mentioned drug, Farmanguinhos Laboratory at Oswaldo Cruz Foundation (FIOCRUZ), had to acquire the necessary technology to manufacture the EFAVIRENZ from MERCK SHARP & DOME.

Recently, the Ministry of Health announced that Brazil will begin the manufacture of the generic version of the drug by the end of 2008. Farmanguinhos is further waiting for the regulatory approval of the Brazilian Health National Agency (ANVISA). As soon as this approval is issued the industrial production will commence.


According to the Ministry of Health, due to the successful outcome of this initiative, compulsory licenses may be extended to others Anti-HIV drugs, such as TENOFOVIR. This is one of the new targets, since TENOFOVIR is the most expensive drug, representing 15% of the overall costs supported by Brazil in regard to the HID/AIDS Program. It is also currently used by approximately 32.000 infected persons in Brazil.

Will EFAVIRENZ constitute a leading case for the Brazilian Government policy to reduce its costs to fight against HIV/AIDS? Will TENOFOVIR be the next target of the Brazilian Government?

These are questions for which we do not have yet an answer. At least, not a clear and transparent ones.

Nevertheless, it appears that EFAVIRENZ may not be the last compulsory license case, even though this compulsory license has frightened drug companies in investing and initiating Research & Development Programs in Brazil. Let us await for future developments.