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Why Brazil pays up to 1,400 BRL for a medicine that costs 34 BRL

Exclusivity of American laboratory in the sale of hepatitis C medicine prevents national manufacture and raises price in Brazil; Public defender service asks for compulsory licensing to increase offer in SUS (Brazilian Public Health System)

“I would certainly pay for my cure, but I don’t have 364,000 BRL (US$ 87,500),” says biologist Fabiana Sobral, 41, who has been waiting at SUS (Public Health System) for medications against hepatitis C for three months.

Like the biologist, about 100,000 Brazilians diagnosed with the disease may wait up to one year at SUS for treatment. And the reason is the high cost of drugs, especially sofosbuvir. The drug, which cures hepatitis C in 95% of cases, is sold by the North American laboratory Gilead to public agencies for between 65 BRL (US$ 15) and 1,428 BRL (US$ 343) per capsule, but its value could drop to 34 BRL (US$ 8) if it was not imported and produced in Brazil.

SUS can pay up to 42 times more because Gilead has owned the sofosbuvir patent since January, which guarantees exclusive sales on the national market. The monopoly is questioned by experts for preventing competition, which would make the drug cheaper.

One of the ways to circumvent this situation is to apply compulsory licensing, that is when the local manufacture of a product is authorized to increase the offer in SUS.

And that was exactly the request made by the Public Defender’s Office in October. Together with eight social organizations, the agency reported Gilead for economic abuse of the sofosbuvir patent before the  Administrative Council for Economic Defense (Conselho Administrativo de Defesa Econômica – Cade), responsible for overseeing competition in Brazil. If the decision is favorable to the group and compulsory patent licensing is issued, the price of the medicine would drop to at least 34 BRL (US$ 8).

It would be the second time that Brazil would apply compulsory licensing.

Treatment with sofosbuvir and daclatasvir increased the chances of a cure from 60% to 95% (Photo: Reproduction) 

Compulsory patent licensing in Brazil

The first was in 2007, in an action that revolutionized the treatment of AIDS in the country. “The [drug] Efavirenz was effective, but its high price limited patient access,” recalls Moysés Toniolo, a member of the National AIDS Commission in 2007, when Brazil announced the compulsory license of efavirenz patent.

At that time, 35,000 new cases of HIV were detected each year, and purchases of efavirenz, used by 90% of patients, used up to 11% of the ministry’s budget for medicines.

But the government did not agree to pay the US laboratory Merck US$ 1.59 per pill, while Thailand paid US$ 0.65, and the generic cost US$ 0.45 in India. “There was a high risk of seriously affecting the AIDS program, so we opted for compulsory licensing,” recalls former minister José Gomes Temporão (2007-2011), in an interview with Repórter Brasil.

With compulsory licensing, which reduced the price to US$ 0.45, the government started saving 30 million BRL (US$ 7.2 million) per year with efavirenz, which allowed it to increase its offer in SUS and buy other anti-HIV drugs. As a result, the number of patients undergoing treatment jumped from 75,000 in 2007 to 230,000 in 2009.

“The funny thing is that, two years later, the president of the laboratory [Merck] publicly apologized for the company’s stance and said that compulsory licensing had been a fair decision by Brazil,” says Temporão.

Activists protest in front of INPI’s headquarters against sofosbuvir’s patent (Photo: Tomaz Silva/Agência Brasil/Aug/21/2018)

Price abuse

Provided for in the international intellectual property treaty (known as Trips), compulsory licensing can be applied when there is economic abuse. About 20 countries have already issued compulsory licensing for patents, such as Canada (637 times), United States (105) and Italy (3), according to a survey by the Intellectual Property Working Group (GPTI).  Brazilian law also authorizes the measure in cases of abusive price or public interest.

“From the moment we see the price abuse of sofosbuvir, compulsory licensing is more than justified. Especially because universal access to the treatment of hepatitis C, a premise of the SUS, is being violated”, says Felipe Carvalho, coordinator in Brazil of the Campaign for Access to Medicines of Doctors Without Borders (MSF), who also signs the representation at Cade.

The action aims at the regulatory body because there is little chance that licensing will come out on the initiative of the current government. Health Minister Luiz Henrique Mandetta has said he is against it. “It is not a good thing to threaten with compulsory licensing. The country should never do that. We have to protect inventiveness and time spent on research,” he said in July during an event organized by multinational pharmaceutical companies. Contacted via  press office, the minister did not respond to Repórter Brasil about the treatment of hepatitis C.

The case of sofosbuvir is similar to that of the AIDS program, says Eloan Pinheiro, former director of the public laboratory Farmanguinhos. “As with efavirenz, there is a public interest in the licensing of sofosbuvir. The government has to think about patients, especially because hepatitis C is curable. “

For the former Minister Temporão, “the current government shows no signs that it is concerned with defending public health in the face of the greed of multinational laboratories”.

Negotiating prices

Between 2015 and 2017, the price of sofosbuvir negotiated by Gilead with the Ministry of Health went from 252 BRL to 160 BRL (US$ 60 to US$ 38). In 2018, the public laboratory Farmanguinhos and the national pharmaceutical Blanver developed the Brazilian generic for 8.50 USD a pill (34 BRL in the current exchange rate).

Last year’s purchase, called three weeks before Gilead had its patent confirmed, was the only one in which there was a price dispute between the U.S. laboratory and Blanver. The result was the lowest value ever practiced in Brazil, at 64 BRL (US$ 15) per capsule. “The tendency is to lower the price when there is some level of competition. But now that they have received the patent, they will not be threatened by competitors and may increase the value”, says Carvalho. Purchases, however, have not been sufficient to cover all patients.

Waiting months

Driver Cássio Araújo, 44, has been waiting for treatment in São Paulo for seven months. “So far it hasn’t arrived. They claim that the medicine is in short supply and that they are distributing it to those who requested it in last October,” he says, confessing that he fears for his health condition. Hepatitis C virus attacks the liver for several years and, without treatment, it advances to cirrhosis, cancer and even death. 

The solution found by some patients in face of the wait has been legal actions. This is one of Araújo’s plans. “I will wait until December for the medication. If they don’t arrive, I will sue”. It is in this scenario that the price of a patented medicine goes up even more.

In the past four years, public hospitals and state and municipal governments have paid 639 BRL (US$ 153) per pill to comply with court decisions. And the value increased even more this year after the patent was granted to Gilead, which sold sofosbuvir to the municipality of São Vicente (SP), through a distributor, for 1,428 BRL (US$ 343). The city government denies the expenditure, which is however registered with the Heath Prices Database (Banco de Preços em Saúde).

Contacted by Repórter Brasil, Gilead refuted “the accusations of abusive pricing and improper exploitation of the patent” and declared that the grant of the patent was “irrelevant in setting prices”. While the Ministry of Health reported that the sending of treatment kits to the states is working normally,

São Paulo Department of Health said it took the ministry a year to deliver the treatment kits scheduled for 2018, when the federal government expanded treatment to all patients, and not just for the most serious cases. The department justified the higher value because its purchases “are made only to meet legal demands and, in this case, are made individually […] while purchases by the Ministry of Health are made in bulk”. Read the complete statements.

The day after Repórter Brasil contacted São Paulo government, biologist Fabiana Sobral received information that her treatment was available. 

“My cure is coming,” she celebrated. “My illness is advanced. If I don’t take the medication in a year, I will go into the cirrhosis phase.”

Araújo, however, is still waiting.

This story was originally published on 8th November 2019

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