I didn't plan on becoming the defender of Abbott's pricing decisions, particularly after that Norvir business in 2004, which I though reflected poorly on them. But these are special circumstances. Since we're on the subject of Brazil and its compulsory licensing threat, I thought it would be worth going to the source. Here, then, is the statement of Brazil's Minister of Health on the matter, dated June 27th. There are some interesting features in it that I'd like to highlight (emphasis added):
"This stage may come to represent the first step for introducing a new phase in our local ARV production. An additional target is to support our national manufacturing industry in this respect, as we are totally committed in maintaining high quality in the medicines available in the public health services.
The Brazilian law allows compulsory licensing in cases of public interest or emergency situations. These are related to issues that involve health, nutrition, protecting the environment, and the technological or sociological development of the country."
Now, much of the rest of Dr. Humberto Costa's statement emphasizes pricing. But I find the industrial-policy aspects rather troubling. How much of this decision is predicated on economic nationalism? We can argue about to what extent Abbott should forgo Kaletra profits in order to help poor Brazilians who are infected with HIV. But should they forgo profits in order to develop the Brazilian generics industry? Here's some more from Dr. Costa:
"In spite of being successful in reducing prices over the period, Brazil still pays exorbitant and unacceptable prices even from the point of view of the full application of capitalist principles."
Wow, even from the point of view of capitalism and everything. . .we've gone about as far as we can go, I guess. How annoying that the antiretroviral drugs have pretty much all come from people who hoped to earn back the immense cost of their development. All I can say to Dr. Costa is: if you think the prices you're paying are unacceptable, you should see what other people have to pay to make up for yours.
And here comes some more capitalism, so get braced: if you go ahead and confiscate someone else's intellectual property, companies will have to factor the chance of that happening again into their future development costs and pricing decisions. And no, in case you're wondering, that will not make prices go down, and it will not make people eager to do more business in Brazil. Not to worry, though: if countries around the world follow your example and seize whatever drugs suit them, eventually there won't be many drugs to seize.