Brazil Battles AIDS and U.S. Resistance

Brazil 2001

By Trudy Rubin

June 24, 2001

This week Brazilian Health Minister Jose Serra will be received as a hero at a special United Nations session on AIDS. The United States will appear as the goat.

Serra and his government have performed a modern miracle. They have done what many thought could never be done in the developing world - designed an AIDS program that has turned around their country's rate of infection. Instead of the 1.2 million HIV positive people the World Bank had predicted for the year 2000, there are only an estimated 570,000.

Brazil gives the anti-AIDS cocktail of drugs free to all in need. The United Nations has called Brazil's program the best among developing nations, and Brazil is eager to share its know-how with other countries.

But the Bush administration is challenging the Brazilian model before the World Trade Organization (WTO).

Instead of urging Brazil on, U.S. trade officials are attacking the heart of a program that has kept tens of thousands of men, women and children alive. Pushed by the pharmaceutical industry, the administration is challenging Brazil's right to make cheap AIDS drugs.

"For me it was a surprise that we had to face an international conflict on this issue," Serra told a small group of American journalists in the Brazilian capital. He is a potential presidential candidate in next year's Brazilian elections, and standing up to unreasonable America could help him. His ministry is fighting for American public opinion, placing ads in U.S. newspapers asking why the drug industry opposes Brazil's AIDS program.

One ad reads, "Local manufacturing of many of the drugs used in the anti-AIDS cocktail permits Brazil to continue to control the spread of AIDS. The drug industry sees this as an act of war, we see it as an act of life."

U.S. officials insist their case against Brazil has nothing to do with the country's AIDS effort. Technically this is true. The U.S. challenge is to Brazil's patent law, which permits the country to override a foreign patent in certain special cases and produce a generic copy of a product, a process known as compulsory licensing.

In reality, the U.S. case is most definitely about AIDS. It challenges a key part of Serra's program: the free distribution of the anti-AIDS cocktail, which is only possible because Brazil makes generic knockoffs of several AIDS drugs at about a fourth of what they would cost in America.

Instead of paying up to $12,000 per patient per year for the course of drugs, Brazil pays $3,000 and falling.

"I need money, and since I don't have money, I need a reduction in prices," Serra told us bluntly. No sooner had Brazil started producing generics than multinational pharmaceutical companies came running to negotiate prices downward. "When (the pharmaceutical company) Merck told me they were lowering prices," said Serra, "we said we would forget about compulsory licensing." In other words, Brazil is willing to buy from multinationals so long as they don't charge the same prices as they charge in rich countries like the United States. Until Brazil held out the threat of generics, drug companies weren't offering big reductions.

What makes the administration challenge to Brazil so offensive is its blindness to the moral and practical significance of the Brazilian model. On the moral front, Brazil has exploded the conventional wisdom of the drug companies that poor countries can't establish effective AIDS treatment programs. This was a convenient excuse not to deal with issues of drug pricing. Brazil has shown what is required for poorer nations to do the job.

It takes firm leadership from the top and mass participation from the grass roots. In Brazil, hundreds of nongovernmental agencies participate in identifying AIDS cases and keeping them on their medication. It takes a willingness to talk publicly about sex, and a certain level of scientific competence. Brazil excels at both.

Many developing nations won't meet these criteria. But for those that do, Brazil has also highlighted the question of drug pricing. If drug companies oppose the production of generics, they must negotiate a system of differential pricing that makes affordable AIDS drugs available to poor countries - or international AIDS agencies.

"What is the right price to compensate (drug companies) for their investments? No one knows. Is a profit margin of 1,000 percent necessary? We need in this situation for consumers to get organized," Serra observed.

However, Serra insists that he respects the idea of intellectual property rights and patents. "The way out is to negotiate," he says. "To have better reciprocal understanding. We hope the U.S. government will take into account our problems." This makes good sense. Otherwise, patents will be ignored and drug companies will become international pariahs. So will the governments like ours that support them.

Does the Bush administration really want to present itself at the U.N. AIDS conference as a government that keeps AIDS drugs from a poor Brazilian child?