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Derek Lowe The 2002 Model

Dbl%20new%20portrait%20B%26W.png After 10 years of blogging. . .

Derek Lowe, an Arkansan by birth, got his BA from Hendrix College and his PhD in organic chemistry from Duke before spending time in Germany on a Humboldt Fellowship on his post-doc. He's worked for several major pharmaceutical companies since 1989 on drug discovery projects against schizophrenia, Alzheimer's, diabetes, osteoporosis and other diseases. To contact Derek email him directly: Twitter: Dereklowe

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October 12, 2005

The Undefeated Brazilian Team

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Posted by Derek

I wrote earlier this year about the showdown between Abbott and the Brazilian government over the price of the antiretroviral Kaletra. After several weeks of rumors, the deal has been struck. And as far as I can see, Abbott did most of the caving in.

Kaletra will now be down to 63 cents a dose in Brazil, down from the previous $1.17. It's interesting to note that back in the summer, press reports had the Brazilian government asking for a price of 68 cents. I don't know if the latest figure reflects a further price break or inaccurate earlier reporting. The new price is less than the American one by a factor of four or five, and this deal sure isn't going to send the price here any lower. In the end, money will be transferred from Abbott's existing customers to the government of Brazil.

This looks like another victory for the "Lower your price or we'll break your patent" strategy that Brazil has used before. They've never gone through with the threat, but it's clearly a real one. Abbott has apparently decided that it's better to make 63 cents a pill in Brazil than to make nothing, and (worse yet) to have Brazilian generic drug makers cranking Kaletra out for the rest of the world. And they've got a point there, of course, even after assuming that this deal could set off more price negotiations in other countries.

But this is worth thinking about next time you hear about the evils of pharmaceutical patents - you know, licenses to print money and all that. There is a trump card, and it's just been played again. Back into the deck it goes until it's needed

(Much, much more on drug pricing can be found in the blog archive here. This very point about national health plans and price-setting came up, for example, in this post from February of 2004.)

Comments (1) + TrackBacks (2) | Category: Drug Prices


1. Anon on October 14, 2005 9:25 AM writes...

If Brazil did break someone's patent like this, how easy would it be for their generic companies to sell to the rest of the world? I guess my question is, how big a break in the dam would this be? I realize that there's an official and an unofficial export channel for these things, though. . .

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Listed below are links to weblogs that reference The Undefeated Brazilian Team:

Killing the Goose from Monkeys and Typewriters
...Brazil was threatening to break Abbott's patent on Kaletra if they didn't come down on the price. Abbott has now caved. As much as that sucks, I can't say that I blame them. And so, U.S. drug consumers continue to subsidize pretty much the rest... [Read More]

Tracked on October 13, 2005 3:31 PM

Channeling Goldstien from Galen's Log
Brazil: We're awfully sorry about killing your prize goose there.* US Pharma: Brazil: In our defense, we were pretty hungry. You know? US Pharma: Brazil: We made an omlet with some of the leftover eggs. Want a bite? [Read More]

Tracked on October 14, 2005 6:42 PM


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