Brazil seeks the price reduction because its National STD/AIDS Program must provide antiretroviral medication free to all HIV-positive individuals in the country. Indeed, the Latin American nation ignores all patents issued before 1997, the year in which it signed an intellectual property law in order to join the World Trade Organization (WTO).

Humberto Costa, the Brazilian Health Minister in office at the time, informed Abbott of the ultimatum, arguing that under the WTO's intellectual property agreement (TRIPS), his government could authorize the domestic production of generic versions of patented drugs in cases of public emergency “related to issues that involve health, nutrition, protecting the environment, and the technological or sociological development of the country.” He added that the state-run laboratory FarManguinhos could produce a generic version of Kaletra(r) for 68 cents, a price much lower than the $1.17 offered by Abbot Laboratories. FarManguinhos could probably do this: Brazil has a well-established pharmaceutical industry that is fully capable of fabricating quality drugs.

But threats to break medical patents are considered legitimate only when designed to aid poor countries experiencing health emergencies. Yet, in this case, Brazil is not acting for humanitarian reasons. The Brazilian Health Ministry has made Kaletra(r) available with large discounts for many years, offering the drug at the lowest price found outside of sub-Saharan Africa (where Abbot does indeed subsidize the treatment on humanitarian grounds). Here, it is evident that Brazil is attempting to install itself in a potentially lucrative market without having to pay the high costs of research and development; the country will then be able to look beyond its own borders and sell generic drugs to other developing nations.

Brazil cannot be regarded as a poor country nor AIDS be considered a Brazilian health emergency. Brazil is a middle-income country. It has the 11th largest economy in the world, an aircraft industry which manufactures planes which compete even with Boeing, and important petrochemical and steel industries. Brazil’s HIV rate is 0.6% of the population, a figure only slightly higher than the United States’ 0.5% and similar to that of most Western European countries.

Abbott Laboratories might have used these arguments to justify termination of sales of Kaletra(r) to Brazil as a means of defending its patent from extortion. However, the proliferation of media reports backing Brazil’s position forced the drug company to negotiate.

Thus, on July 5, Abbott Laboratories and Brazil's Ministry of Health reached an agreement whereby Abbott will ensure that the Brazilian government’s annual expenditure on Kaletra(r) will remain at its present level for the next six years. In return, Brazil will not produce a generic version of the drug. The price per pill was not specified and will depend on the number of patients enrolled in Brazil’s AIDS treatment program.

However, this “good deal”, which seems to please both sides, is a serious threat to the future health of millions of people in developing countries.

Abbott Laboratories is a health care company dedicated to basic and applied research that seeks to discover, develop, manufacture and market pharmaceutical and medical products. The firm employs more than 60,000 people and sells its products in over 130 countries. Abbott is privately owned and funds its own research and development in an industry in which the drug registration process can last 12 to 15 years at an approximate cost of $800 million per drug. This huge investment can only be recovered from profits earned on successful products.

The agreement between Abbott Laboratories and Brazil, which could extend to all pharmaceutical firms, threatens the ability of drug companies to profit from their innovations and, therefore, discourages the research and development of new drugs: if patents are ignored and unauthorized generic drugs produced, the incentive to invest in research and development is reduced dramatically, especially for less profitable drugs – for diseases such as tuberculosis, malaria and Chagas disease – whose main markets are in developing countries. Roger Bate of the American Enterprise Institute demonstrated this worrisome threat in his determination that “27% of companies working on HIV research have already left the field in the past 7 years.”

Agreements like that between Abbot Laboratories and Brazil are particularly threatening to nations such as Bolivia, where pharmaceutical companies are as underdeveloped as the countries themselves- Bolivia, for example, produces only several ointments and creams and its budget for research and development is almost zero. If the foremost pharmaceutical companies of industrialized countries were to cease investment in treatments for “diseases of the poor” due to disregarded patents, many more than the millions who die today would be in danger of dying in the future. This circumstance would widen not only the gap between the rich and the poor, but also that between the healthy and the chronically and endemically ill.

Let us respect intellectual property rights, and not kill the hen which lays our golden eggs!

* Sylvia Pasquier is biochemist, Founder and President of ICEES in Bolivia (Instituto de Ciencia, Economía, Salud, y Educación) and author of the book "Desarrollo Sostenible de la Población: Una Visión Crítica a Principios del Siglo XXI".