ARTICLE: Brazil's Drug Copying Industry

[Murray Charters <mcharters@xxxxxxxxxxxxxx>]

Brazil's Drug Copying Industry

ITAPIRA, Brazil, Sept. 25, 2003

(AP) Inside a laboratory in Brazil's coffee- growing region, scientists 
painstakingly replicate brand name drugs and
oversee mass production of cheap copies to treat ailments ranging from 
Parkinson's Disease to AIDS.

In three decades, Laboratorio Cristalia has grown from a tiny company making 
one cloned anti-hyperactivity medication
to a firm with 1,200 workers churning out 150 drugs, illustrating the 
exponential growth of the generic drug industry
in countries like Brazil and India.

Now Cristalia and its competitors are trying to figure out how to profit from 
the World Trade Organization's recent
agreement allowing impoverished nations to bypass big pharmaceutical companies 
and import copied patented medicines to
fight killer diseases.

The WTO's 146 member countries reached the agreement last month, a week before 
the group's talks on trade and
agricultural issues collapsed at a summit held in Cancun, Mexico.

Although there are challenges that might make the medication plan unworkable, 
getting the business could be a big
moneymaker for Cristalia, founded in 1972 by Dr. Ogari de Castro Pacheco to 
make cheaper drugs for patients with mental
illnesses at his private clinic next to the drug lab.

Before the decision, Cristalia was free to sell its copied versions of patented 
drugs in Brazil and ship them abroad
after the patents expired.

But the agreement opened a huge potential new market by allowing generic drug 
makers to export drugs still under patent
protection to treat diseases such as AIDS, tuberculosis and malaria when needy 
countries declare they can't afford
prices charged by multinational pharmaceutical corporations.

Millions of patients need the drugs, and tens if not hundreds of millions of 
dollars in sales are possible. Despite
doubts from the pharmaceutical industry that the developing world's generic 
drug makers can handle the demand, Pacheco
said it would be easy for him to increase production.

"If they asked me for the level of consumption in Brazil for the AIDS cocktail, 
I could deliver it in three to six
months," said Pacheco, Cristalia's chief executive and principal shareholder. 
"For what's consumed in all of South
America, I'd need a little more time."

But Pacheco and his counterparts in Brazil and India face potential political, 
bureaucratic and financial obstacles
that could prevent them from selling a single dose of a lifesaving AIDS 
medication. Under the WTO agreement, poor
countries that want the drugs must prove they don't have manufacturing 
capability, then issue a special license to a
generic drug maker.

Notification to the WTO is mandatory, and the drug maker must then obtain an 
export license from its government. Each
country that embarks on the effort must review its generic importation process 
annually, and complaints can be taken to
the WTO's committee on intellectual property "with a view to taking appropriate 
action."

Experts say poor countries will have to negotiate first with the patent holders 
to try to get the drug companies to
slash prices, and may end up using the threat of deals with the generic drug 
makers as bargaining leverage.

The WTO agreement has "not simplified things, it's been complicated and only 
the large companies benefit," said Yusuf
Hamied, chairman of Cipla, one of India's largest generic makers. "Who wants 
this red tape? We need predictability for
supply. We don't want the headaches and the litigation."

And even if a generic drug maker succeeds in landing a contract to supply a 
poor African country with AIDS drugs, it
won't start production without guarantees of payment from groups like the 
Global Fund to Fight AIDS, Tuberculosis &
Malaria, which is seeking $3 billion in pledges from developed countries to 
fund the drug needs of poor countries
around the world.

"Let's not kid ourselves, the generic producers are in it for business and they 
want to know they will get paid," said
Eric Noehrenberg, director of international trade and market issues with the 
International Federation of Pharmaceutical
Manufacturers' Association, which represents research pharmaceutical companies 
that hold drug patents.

Noehrenberg downplayed Brazil's ability to produce enough generic drugs for 
countries that need them. In an ongoing
dispute with three large pharmaceutical companies over prices of three patented 
AIDS drugs imported into Brazil, the
government is considering breaking patents by importing the drugs from India or 
China because Brazilian health
authorities say the country's generic makers don't have the capacity yet to 
produce enough for the 140,000 Brazilians
with AIDS.

So if Brazil can't make enough AIDS drugs to fulfill domestic needs for its 
internationally recognized free treatment
program, Noehrenberg said, how can it ship them abroad?

Pacheco and AIDS activists insist the capacity can be increased because 
established generic drug makers can start
production lines quickly. Even if Brazil can't handle the load, the medical aid 
group Doctors Without Borders says
countries like Brazil can somehow help less developed countries meet their 
pharmaceutical needs.

"There's increased funding for AIDS, and more and more countries are talking 
about providing more AIDS funding," said
Ellen 't Hoen, a Doctors Without Borders spokeswoman. "Brazil could play a big 
role with exports, but Brazil also has
the knowledge and the technology to help other countries to start production 
sites and their own programs."

Pacheco, Cristalia's president, figures he would only be able to make thin 
profit margins because AIDS groups will make
sure generic drug makers provide the crucial anti-retroviral drugs used in the 
AIDS cocktail at the cheapest cost
possible. So the secret to making money by selling generic drugs to poor 
countries will be big volume.

"Meeting Africa's needs with anti-retroviral drugs may be a dream, but it's 
possible," Pacheco said. "It's certainly a
challenge I am determined to take on."

By Alan Clendenning

SOURCE: The Associated Press / CBS News


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