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Abbott agrees to lower price of AIDS drug in Brazil

July 05, 2007|From Bloomberg News

Abbott Laboratories, the third-largest U.S. drug maker, agreed to cut the price of its new AIDS treatment drug by 30% in Brazil, two months after the country broke the patent on a similar drug made by Merck & Co.

Abbott will reduce the price of its new version of the Lopinavir/ritonavir drug, known as Kaletra, to 73 cents from $1.04 this year and to 68 cents in 2008, Brazilian Health Minister Jose Gomes Temporao said Wednesday at a ceremony in Brasilia. The government expects the accord to lower its drug costs by as much as $11.4 million this year.

Brazil has pressed for discount prices on AIDS drugs to limit the cost of its program that provides free treatment to all 200,000 people infected with AIDS and HIV there, Temporao said.

The deal follows the May 4 decision to break the patent on Merck's AIDS drug Efavirenz after the company failed to satisfy the government's price demands.

"Abbott created a positive atmosphere of discussion and cooperation with the government, which allowed us to reach an agreement," Temporao told journalists. "Other laboratories should follow Abbott's example."

Abbott Park, Ill.-based Abbott agreed to extend to Brazil the same price structure it had offered 44 other countries considered low and low-middle income, the company said in an e-mailed statement. The agreement replaced a deal signed in 2005 in which Abbott lowered the price of the previous version of Kaletra by 46% in Brazil after the government threatened to break its patent.

"The company managed to set a comprehensive world strategy for HIV that recognizes the differences of economic levels of the countries," Heather Mason, Abbott's vice president for Latin American and Canadian operations, said in an interview in Brasilia. "This price point still allows us to invest as an innovator company and researcher in the development of drugs."

Patients will begin receiving the new version of Kaletra in September, Temporao said. The new drug is taken four times a day, compared with six times for the previous version, and the need for refrigeration has been eliminated, he said.

Kaletra is a protease inhibitor that blocks an enzyme involved in the virus' replication, slowing its progression to AIDS. About 31,000 adults and 1,200 children take it daily, the ministry said.

The government is also holding talks with Bristol-Myers Squibb Co. and Novartis to demand lower prices on their patented AIDS and cancer drugs, Temporao said.

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