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In an attempt to stem criticism from AIDS activists and developing countries, the Bush administration has dropped its complaint to the World Trade Organisation against a Brazilian drugs patent law that was being used to provide greater access to medicines for poor people there.
The United States made the complaint in February, arguing that the Brazilian law violated international trade rules. In particular, the United States said the law infringed the overseas patent rights of multinational pharmaceutical companies.
The patent law requires owners of Brazilian patents to manufacture their products in Brazil rather than import them. If this is not done, the Brazilian government has the right to license the manufacturing rights to another producer.
The decision to drop the complaint substantially softens the US stance on who may manufacture and sell AIDS drugs in impoverished countries. In exchange, Brazil has agreed to give advance notice to American officials before going ahead with a provision in its patent law which the United States says will put pressure on companies to manufacture their products in Brazil. Despite the concession, Brazil will not need to get permission from the United States before issuing the licences to manufacture the drugs.
US trade representative Robert Zoellick said that the United States and Brazil would now try to set up a group to discuss intellectual property rights and AIDS treatment. “I stand four square behind strong enforcement of the World Trade Organisation rules on intellectual property,” Mr Zoellick said in a statement. “However, litigating this dispute before a World Trade Organisation dispute panel has not been the most constructive way to address our differences.”
Brazil distributes cheap generic versions of popular drugs free to anyone who needs them. From the start, the complaint by the World Trade Organisation has been a public relations debacle for the Bush administration.
Brazil is widely known as one of only a few developing countries with a successful AIDS treatment programme, and Brazilian officials cite the patent law as one of their primary weapons in the fight against AIDS.
While the move is seen as a victory for patients in low income countries who cannot afford the high cost of medication, some experts say the erosion of patents' rights is leading the pharmaceutical industry to cut back its research on new medications.