Thailand’s Ministry Of Public Health has announced plans to grant a five-year, compulsory license to produce a lower-cost version of Merck’s antiretroviral drug Efavirenz — a move that appears to be legal under the World Trade Organization’s Doha Declaration (an amendment to the WTO’s TRIPS Agreement). Thailand is looking to save on the cost of Efavirenz by reducing the price 50% from $67 monthly to $38.5 monthly, according to the ministry’s Department of Disease Control.

Meanwhile, Merck claims it makes no profits off Efavirenz in Thailand and that the Thai government did not consult the company before deciding to issue the compulsory license. Under the license, Merck will receive a 0.5% royalty on sales of the locally produced drug.

Provisions on compulsory licensing are written into the TRIPS agreement on trade-related intellectual property rights so governments can issue compulsory licenses to allow other companies to make a patented product or use a patented process under license without the consent of the patent owner but only under certain conditions aimed at safeguarding the legitimate interests of the patent holder. TRIPS, or Trade-Related aspects of Intellectual Property Rights, is an Agreement drawn up by the World Trade Organization to ensure intellectual property rights are respected within international trade.

Efavirenz was approved by the FDA in 1998 for use in combination with other anti-retrovirals in adults and children with HIV infection. Efavirenz is used with other medications to treat human immunodeficiency virus (HIV) infection in patients with or without acquired immunodeficiency syndrome (AIDS).

Efavirenz is in a class of medications called nonnucleoside reverse transcriptase inhibitors (NNRTIs) that works by slowing the spread of HIV in the body. Efavirenz does not cure HIV infection and may not prevent someone from developing HIV-related illnesses or from spreading HIV to other people. In 2004, global combined sales of Crixivan (indinavir)/Stocrin(Efavirenz) reached $256 million.

Thailand’s Health Ministry has argued that it cannot afford to import Efavirenz and thousands of Nevirapine-resistant HIV/AIDS patients would likely die without a cheaper version of the drug on the market. By producing its own generic version of the drug, Thailand will be able to treat 100,000 HIV-positive people, compared with 17,000 who have access to the drug now.

Today, AIDS is the leading cause of death in Thailand with more than 50,000 are expected to die in Thailand from AIDS-related causes in 2006, according to a World Bank study.

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