News April 2007

Thailand To Push For More AIDS Drug Price Cuts

Thailand is encouraged by initial successes in its campaign to force big drug firms to cut the costs of medicines but is far from satisfied, Health Minister Mongkol na Songkhla said on Thursday.

Thailand's issue of compulsory licences to override patents and allow the production or purchase of generic drugs, which stunned the big pharmaceutical firms, had got the ball rolling, he said.

"Compulsory licensing is the only way we could attract them to sit down and talk with us over price reduction," he told Reuters after Abbott Laboratories <ABT.N> offered to slash the cost of a key AIDS drug.

"After having tried very hard to get their attention over the past six to seven years, it is much easier to talk to them now," said Mongkol, appointed after a military coup against pro-business Prime Minister Thaksin Shinawatra in September.

But the offer by Abbott -- widely criticised for the high cost of its AIDS medicines in developing countries -- to slash the price of one key treatment by more than half in more than 40 poor countries would not end Thailand's campaign, he said.

"We will continue to talk with them until we reach the point where we can optimise the accessibility of the drugs to the Thai people," Mongkol, a Thailand-trained medical doctor, said.

In February, another pharmaceutical giant, Merck & Co. Inc. <MRK.N>, announced a 46 percent reduction in the price of its HIV-AIDS drug, Efavirenz, for poor countries and those hit hard by the disease, including Thailand.

Despite the price cuts by two firms, Thailand would not revoke the compulsory licensing orders they had already put in place since November, said Mongkol, who is due to meet trade officials and congressmen in the United States later this month.

"NOT INSTANT NOODLES"

Thailand was convinced the drug industry was wrong to argue that research and development costs meant it had to charge high prices, said Vichai Chokevivat, head of the Health Ministry's panel on compulsory licensing.

"Drugs are not instant noodles; their profit margins are huge because their prices are marked up extraordinarily high," he said.

"We hope to see drug firms lower profit margins in order to sell more drugs to more people."

AIDS activists also said Abbott would have to go beyond its offer of its Kaletra AIDS drug at $1,000 per patient per year -- cheaper than generic versions -- to the governments of more than 40 low and low-middle income countries.

It had not included an updated version of Kaletra -- which must be kept in cold storage, an expensive, even impossible requirement for many countries -- that did not require refrigeration, said Paul Cawthorne of Medicins Sans Frontieres.

Abbott had not registered the new heat stable Aluvia tablets in many countries so it would not have to supply them at the new discounted price, he said.

"Abbott has to do more. What we need to see are these new heat stable Aluvia tablets going into people's mouths and then we will be happy," he said.

AIDS activists elsewhere welcomed the Abbott move, but also sought more.

"This price cut is an improvement, but Chinese still can't afford it," said Meng Lin in Beijing, where many AIDS patients make only 300 to 400 yuan ($40-50) a month. "People have to eat. For now, only very few Chinese can afford Kaletra."

Source: Reuters