Defiant Brazil.

The WTO should support Brazil in its fight to control AIDS.

THREE CHEERS FOR BRAZIL!

While U.S. politicians talk about making life-saving drugs affordable for the poor, Brazil's government is doing it. For the past four years, some 100,000 people--nearly all the AIDS patients in the South American country--have received free the same cocktail of drugs that keeps wealthier U.S. residents healthy. Brazil accomplishes this by ignoring the patents and outrageous prices of multinational drug companies and manufacturing its own copies of the anti-retroviral pills.

This defiance has converted Brazil into a global model. Latin America's largest country has cut its AIDS death rate by 50%, kept the epidemic from spreading and avoided shelling out what otherwise might have been nearly US$500 million in AIDS medication and another $422 million in hospital treatment, according to the Health Ministry. It is one of the few countries where the spread of the virus has been kept under control. HIV infection has scaled down to 0.6% of adults, compared with 25% in South Africa, mainly because of free medicines. Sex education and the promotion of condom use have also helped lower the rate.

The program was launched when the Brazilian government risked a bitter trade dispute by refusing to pay the asking price of about $12,000 a year per person for AIDS treatment. Brazil now produces eight of the 12 anti-retroviral drugs needed by AIDS sufferers and dispenses the drugs at an annual cost of about $4,700 per person. It hopes to reduce that price even more with generic drugs.

Naturally, the drug companies are livid. They pressured the U.S. government to take their case to the World Trade Organization (WTO), which is expected to decide this summer whether international patent rules have been violated. Pharmaceutical companies have also asked that Brazil be placed on the U.S. watch list, usually a first step toward trade sanctions.

The United States is particularly peeved by a provision in Brazil's 1997 intellectual property rights law that says a foreign company must forfeit patent rights to a product after three years if, during that period, the company does not begin to manufacture its product in Brazil. Brazilian officials argue that the law provides protection against companies that charge excessive prices. Citing the law, the Health Ministry has threatened to override patents on two other AIDS drugs--nelfinavir, made by Switzerland's Roche, and elfavirenz, which is manufactured by New Jersey-based Merck & Co.--if the two companies don't agree to a 50% price cut by June. Brazil's Health Ministry doles out $115 million a year, or 36% of its entire drug budget, to purchase the two drugs.

Drug war. Recently, Oxfam, a respected charity, and the Nobel Prize-winning Doctors Without Borders accused the world's major pharmaceutical companies of "waging an undeclared drug war" against poor nations by keeping drug prices high and by using trade sanctions to protect treaties that give companies 20-year patent rights to their drugs.

In response, Richard Sykes, chairman of Britain's GlaxoSmithKline, one of the world's largest pharmaceutical companies, accused the groups of using "political rhetoric" and argued that attacking the patent process would destroy the drug industry. He and other industry spokespersons say the real problem in developing nations is an infrastructure that impedes the distribution of drugs to the poor, as well as the low priority placed by some Third World governments on public health. Most importantly, the drug makers say, they are losing millions of dollars every year to patent infringement, coupled with the high cost of developing drugs.

While that all may be true, it is time for these multinationals to come up with a fair solution. They could avoid passing on import costs tacked to the final price, make agreements to produce their products more economically with local companies or charge a sliding scale to the poorest countries. If not, the WTO must look at this case as a health issue rather than a trade issue and change the rules. A decision in favor of Brazil would also serve as a wake-up call for pharmaceutical companies that have long kept many drugs out of the reach of the world's poor.

By putting moral values ahead of profits, Brazil is showing the world how to save lives. Even if the WTO rules against Brazil, I hope other nations would have the courage to follow its lead.