Is ‘big pharma’ making Brazil sick?

Generic drugs: life-savers or patent-breakers? Photograph by John Bruesewitz on Flickr.

An investigation into the ethics of the pharmaceutical giants’ battle against Brazil’s generics

“EU policies on drug shipments have a highly negative impact on the legitimate trade of generic medicines,” said Brazil’s Foreign Minister.

Generic drugs: life-savers or patent-breakers? Photograph by John Bruesewitz on Flickr.
Generic drugs: life-savers or patent-breakers? Photograph by John Bruesewitz on Flickr.


When the Brazilian government introduced the Generic Drug Act in 1999, it must have known that there would be serious retaliation from multinational pharmaceutical corporations. Perhaps they didn’t imagine just how nasty things would turn.

From cinematic surprise seizures of drug shipments in Europe to alleged lobbying in the nation’s parliament to undermine the legislation, pharmaceutical companies have been resorting to different strategies to oppose generic drugs in Brazil and other developing countries.

The Brazilian policy mandates that pharmaceutical products that are no longer protected by a patent must be interchangeable with an innovator drug, in an attempt to reduce drug prices and to enable greater access to essential remedies.

The initiative from the South American country gained international praise from humanitarian organisations that campaign for the provision of affordable remedies to save the lives of millions of poor people around the world.

Medicines produced by alternative or generic sources are available at a lower cost than those protected by patents and manufactured by large, profit-driven corporations.

In countries like Brazil, where generic medicines are widely available, the price of a branded product usually falls as a result of the competition it faces from low-priced alternatives.

Pharmaceutical multinational corporations have been trying to find ways to fight back regulatory policies worldwide, such as the Brazilian one, with the full support of the World Trade Organisation (WTO), the government of the United States of America and the European Union.

In 2009, Brazil and India threatened to take the European Union to court at the World Trade Organisation in a dispute over seizures of generic drugs in Holland.

The Dutch customs confiscated 500kg of a generic blood pressure drug en route from India to Brazil when the plane that was carrying the shipment had to make a stop in Amsterdam’s Schiphol airport.

German giant Merck had Dutch customs in Amsterdam’s Schiphol seize 500kg of generic drugs en route from India to Brazil. Photograph by Mark Brouwer, Wikimedia Commons.
German giant Merck had Dutch customs in Amsterdam’s Schiphol seize 500kg of generic drugs en route from India to Brazil. Photograph by Mark Brouwer, Wikimedia Commons.


The seizure was backed by the European Union, despite the fact that the business deal between Brazil and India was entirely in compliance with WTO regulations.

The drugs were meant to treat HIV-positive patients in poverty-stricken areas of Brazil, and they never reached their destination.

In a joint statement made in January 2009, Brazil’s foreign minister Celso Amorim and India’s trade minister said EU policies on drug shipments were incompatible with WTO rules and had a

highly negative systemic impact on the legitimate trade of generic medicines, South-South commerce and national public health policies.

Brazil and India’s threat to take the EU to the WTO court, however, never materialised.

The seizure of the generic drugs in Holland was conducted after German pharmaceutical company Merck accused Brazil and India of violating Dutch patent laws by trading the product.

Brazil and India argue that the European Union acted unilaterally and that their negotiation was within WTO requirements.

According to information provided by the Brazilian government, since the early days of the AIDS epidemic in the 1980s, Brazil has had 656,710 registered cases of infected patients.

Non-governmental organisations Oxfam and Health Action International claim that so far Dutch and German officials have made questionable, EU-backed customs seizures of 19 shipments of generic medicines bound for developing countries.

India and Brazil sustain that the seizures follow a pattern by rich nations to impose difficulties on the commerce of generic drugs.

Elise Ford, Oxfam head of EU advocacy, said the seizure actions would result in

higher medicine prices in developing countries.

British charity Oxfam also highlights the adverse health impact patent laws are having on developing countries.

According to Oxfam, in the drive to maintain and increase their profits, Western drug companies are putting vital medicines beyond the reach of  a growing and vast proportion of the world’s population.

Defenders of patent laws argue that measures aiming towards patent protection encourage important medical research that ultimately leads to the production of new drugs and the discovery of new ways of treating diseases.

The International Federation of Pharmaceutical Manufacturers & Associations (IFPMA) claim that the research-based pharmaceutical industry plays a “unique role in developing new medicines and vaccines to prevent and treat diseases, and improve the lives of patients.”

The “Pharmaceutical Industry and Global Health Facts and Figures” report from 2012 states that the cost of developing a single new drug amounts to over USD 1.3 billion, compared to USD 138 million  in 1975.

Oxfam and Health Action International accuse Europe of “double standards by cracking down on medicine prices at home while undermining access to cheap drugs in poor contries.”

Patents and other property-related issues are internationally regulated by the World Trade Organisation, but not without a great deal of controversy.

In 1994, the WTO passed the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), establishing patent protection for a minimum of 20 years in all fields of technology, including medicine. It is the most comprehensive international agreement on intellectual property to date.

Developing countries were given until 2000, and Least Developed Countries until 2006 to bring their national legislations into line with WTO rules.

According to the WTO’s guidelines, all countries have to offer protection on drugs for which patents were filled after 1995. Critics of TRIPS say that it has wealth concentration effects, moving money from people in developing countries to copyright and patent owners in developed countries.

Third World Network, an independent non-profit international network of organisations and individuals involved in issues relating to development, developing countries and North-South affairs, issued a statement warning against the negative effects of patents on the level of access to affordable medicines.

Sources in Brazil reveal that multinational pharmaceutical companies have been lobbying to undermine the Generic Drugs Act 1999.

They say that companies’ representatives have engaged in conversations with politicians in Brasília, the nation’s political capital, in order to introduce new sections in the Act that would benefit patent holders and make it more difficult for a new generic drug to be approved by the government.

The sources also say that multinational laboratories have been trying to buy local companies that produce generic drugs, and evidence to that allegation has already surfaced.

Pfizer, the world’s largest drug maker, acquired 40 per cent of Brazilian generic pharmaceutical firm Laboratório Teuto Brasileiro in October 2012, in a deal that the American laboratory denies to provide specific details.

ABIFINA, the Brazilian Association of the Pharmaceutical Industry, refutes claims that pharmaceutical companies are lobbying against generic drugs. They have refused to make specific comments other than that their “member companies operate under internationally recognised ethical guidelines.”

The multinational pharma companies operating in Brazil don’t seem to be willing to let go of their patents without a fight. Companies like Pfizer have reportedly filed at least 60 lawsuits to extend patents that are about to expire. When they can’t extend the patents, the strategy appears to be to buy the drug companies that will eventually make and sell the generic versions.

The Global Use of Medicines: Outlook Through 2016” report published in 2012 by the IMS Institute for Healthcare Informatics forecasts that the annual global spending on medicines will reach nearly USD 1.2 trillion by 2016, as developing countries will contribute significantly more to total spending.

According to the report, in the developed markets, including the United States, Europe and Japan, spending will decline to 57% of the global total due to expiring patents, and “pharmerging” markets – those constituted by developing countries – will grow to reach 30% of global spending in the next two years.

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