Government to break patent on key AIDS drug

Thailand is to issue a compulsory licence for Merck's patented HIV/AIDS drug Efaverenz, allowing the government to cut costs of supplying the drug by a reported 50 percent, helping it meet a growing demand for treatment.

This is the first time Thailand has broken the patent of an HIV drug to help it cut the cost of AIDS treatments. The move has alarmed Merck and other Western pharmaceutical companies who fear it could set a precedent and encourage other middle-income countries to do the same.

But activists and public health professionals have welcomed the decision, saying any price reduction will enable the government to treat more people, including ethnic minorities and migrant workers, many of whom still lack access to life-saving antiretroviral (ARV) drugs.

"If they can reduce the cost of Efavirenz by the amount they say they can, it means the budget they've got can treat a lot more people," said Paul Cawthorne, country director for Medecins Sans Frontiers, in Thailand.

Thailand, which has an estimated 600,000 people living with HIV, has won accolades for its pledge to provide ARVs to all citizens who require them. But activists are pushing Bangkok to expand its treatment programme even further to cover currently excluded groups, including members of ethnic minority 'hill tribes', who are not recognised as Thai citizens, and migrant workers from neighbouring Burma.

Currently, around 84,000 Thai AIDS patients are receiving state-funded treatment - mostly GPO-vir - a relatively inexpensive combination of three off-patent drugs produced by Thailand's Government Pharmaceutical Organisation (GPO).

Within the next two years, Thailand aims to scale up its treatment capacity to cover 150,000 people. But public health professionals have expressed concern about the cost implications of this, especially as more patients taking the inexpensive, generic drugs will require more costly second-line treatments - most of which are still under patent.

The compulsory licence for the Merck drug is how the government hopes to solve the problem. Initially, it will import the medicine from a generic company in India, but by 2007, the GPO expects to be able to produce the drug itself.

Currently, around 20,000 Thais, including around 13,000 on the government programme, take Efavirenz, which is for people who cannot tolerate one of the
components of GPO-vir. However, Thai health officials want to dramatically increase the use of Efavirenz to around 100,000 people. Thai officials estimate that production by the GPO would enable the government to save up to US $23.5 million a year.

But Thailand's move will not go unchallenged. Merck, the US-based pharmaceutical giant, says it will try to persuade Bangkok to reverse its decision, and find other ways to meet treatment needs.

A Merck spokesman said options could include negotiating further reductions in prices or the possibility of 'voluntarily' licensing the Thai GPO to produce generic Efavirenz.

"There has been no process in terms of Thai law, or international law, where the company has been consulted, or where the company has been asked what they could do to assist," a spokesman for Merck’s Thai subsidiary, MSD Thailand, said. "Our sense was, we had a supply agreement in place."

Merck said it has supplied Efavirenz to the Thai government at a 'no profit' price since 2001, and further shaved the price by 20 percent in March of this year. "Thailand has one of the lowest prices of this product in the world," the spokesman said.