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Brazilian President Urged to Veto Compulsory Licensing Law

June 27, 2005

Influential media sources have urged Brazil's president, Luiz Inacio 'Lula' da Silva, to veto a law that envisages breaking patents held by US drugmakers on HIV/AIDS therapies. The sources claim that, in addition to violating the international TRIPS accord on intellectual property, the law could threaten a delicate consensus between the US and Brazil on intellectual property rights.

The law has already been approved by the lower house of Brazil's Congress, and now awaits discussion in the Senate. However, under an existing bilateral accord, Brazil is obliged to notify the US if it intends to issue compulsory licenses on products manufactured by US firms. A group of US senators has now asked the Bush administration to impose trade sanctions if the Brazilian bill is approved.

Existing Brazilian laws allow compulsory licensing on the grounds of national emergency, or failure to adequately supply life-saving drugs. However, if Brazil proceeds with the bill, the US will seek the creation of a World Trade Organisation panel to examine the legality of this measure. This move would be likely to destabilise a delicate compromise, in which a tentative agreement would see a royalty system imposed according to the licensor country's supposed "ability to pay."

Nevertheless, leading Brazilian state-run drugmaker Farmanguinhos continues to insist that it is set to begin producing Abbott Laboratories' ritonavir/saquinavir combination therapy, under a licensing arrangement with local private firm Cristália. The government manufacturer already produces eight of the 15 medicines supplied under Brazil's free-of-charge treatment programme for 180,000 sufferers, and its research unit have pledged to begin production of a new antiretroviral developed in Brazil within seven years.