By Kevin E. Noonan —

The measure of sanity displayed by Abbott and Brasil last week, when the parties agreed to a pricing scheme that avoided "breaking" Abbott’s patent on its anti-AIDS drug Kaletra® (see "Brasil Prevails in Dispute with Abbott over AIDS Drug Pricing") has not translated to the Eastern hemisphere.  Thailand, which earlier this year announced plans to produce the drug without paying royalties to Abbott, refused to alter its decision even in the face of a more compliant attitude from the drugmaker.

A different form of Kaletra® (Aluvia®, a heat-stable formulation) is at issue in Thailand; this form is particularly important in Thailand in light of its tropical climate, because the drug does not need to be refrigerated.  The Thai government has demanded that Abbott accept pricing for the drug no greater than 5% over the cost of the generic alternative.  Brasil, in contrast, accepted a 30% reduction in the price of the patented drug, resulting in an annual cost per patient of about $1,000.  Thailand has rejected this same pricing arrangement.  Instead, Thailand will purchase the drug from Matrix Laboratories, an Indian generic manufacturer, at a cost of about $700 per year per patient.

Thailand is also preparing to purchase a supply of a generic version of the sanofi-aventis heart medicine, Plavix®, at a generic cost that is more than 10-fold lower than the patented drug price.  Although Thailand’s Public Health Minister Mongkol na Songkhla has stated that the government has identified four Indian generic drug companies as a potential source of the drug, the government has not publicly disclosed them.  About five million tablets of the generic drug are expected to be imported into Thailand to meet the needs of heart disease sufferers.

Thailand is dealing with about 580,000 AIDS sufferers in its population of about 63 million; the government has provided AIDS drugs to about 100,000 of its AIDS patients.  These statistics provide the justification for Thailand invoking the provisions of the Doha Declaration with regard to Kaletra®.  Thailand’s actions have been hailed in many quarters as provoking price reductions for Kaletra® and other drugs in almost 50 other developing countries around the world.  It is important to recognize that this represents only one aspect of global drug pricing economics, no matter how justified Thailand is believed to be in its actions.

For additional information regarding this and other related topics, please see:

• "Brasil Prevails in Dispute with Abbott over AIDS Drug Pricing," July 9, 2007
• "Africa (Still) Depending on the Kindness of Strangers in Anti-AIDS Drug Pricing," May 29, 2007
• "U.S. Trade Policy Becoming Less Pharma-Friendly," May 18, 2007
• "The "Unfairness" of World Intellectual Property Protection According to The New Yorker," May 17, 2007
• "Worldwide Drug Pricing Regime in Chaos," May 9, 2007
• "Not Getting It about Patented Drug Prices at The Wall Street Journal," May 6, 2007
• "A Modest Proposal Regarding Drug Pricing in Developing Countries," May 2, 2007
• "The Law of Unintended Consequences Arises in Applying TRIPS to Patented Drug Protection in Developing Countries," May 1, 2007
• "Abbott Agrees to Offer AIDS Drug at Reduced Price," April 12, 2007
• "No New Abbott Medicines for Thailand," March 14, 2007
• "More Compulsory Licensing in Thailand," February 1, 2007
• "Thailand Compulsory License Still in the News," December 18, 2006
• "Thailand Issues Compulsory License for AIDS Drug," December 6, 2006