Thailand's army-installed government has issued licences for cheap generic versions of a heart disease and an AIDS drug, the health minister said on Thursday, dealing a shock blow to foreign pharmaceutical firms.
"The laws have been signed and they are now effective," said Mongkol na Songkhla, who became health minister after a September 19 military coup. He cited the ballooning costs of treatment as the reason for the move.
"We have to do this because we have so many patients to treat with so little budget. We can't watch our people die and their patents have been here for so long," he told Reuters. Under World Trade Organisation rules, a government is allowed to declare a "national emergency" and license the production or sale of a patented drug without the permission of the foreign patent owner.
Drug companies reacted angrily to the announcement, saying they had been kept in the dark, and urged Mongkol to reconsider a decision they said could lead to many firms leaving the country.
"No company has received any contact," said Teera Chakajnorodom, President of the Pharmaceutical Research and Manufacturers Association (PReMA), an industry umbrella group. "It has stunned our industry." "We've heard it's not just HIV drugs, it's also cancer drugs and cardiovascular drugs," he said. "This is very new and goes very far."
Confusion remained about what drugs were affected. Mongkol said the drugs were HIV-AIDS and heart disease treatments but declined to confirm newspaper reports they were Abbott Laboratories' Kaletra, and Plavix, a blockbuster anti-clotting agent sold by Sanofi-Aventis and Bristol-Myers Squibb.
In November, two months after the army's removal of Prime Minister Thaksin Shinawatra, the interim government issued its first compulsory licence, to make a generic version of Efavirenz, an anti-retroviral. That decision drew a swift riposte from US drug maker and patent holder Merck & Co Inc By contrast, AIDS activists applauded Bangkok for taking a bold stance.
The widening of compulsory licensing is another blow to foreign investors still reeling from capital controls imposed in December to stem a rise in the baht and a proposed tightening of laws governing overseas firms in Thailand.
PReMA said it had written to Prime Minister Surayud Chulanont on Tuesday asking that no more compulsory licences be introduced beyond the one covering Efavirenz.
However, Mongkol, who met Sanofi-Aventis bosses on Wednesday, appeared to have brushed aside the plea and accused the industry of making excessive profits.
"They are reaping colossal benefit from us," he said, adding that copycat versions of the drugs from Chinese or Indian firms would cost as little as 10 percent of their original price. Plavix is Bristol-Myers Squibb's biggest-selling medicine, with annual sales of $6 billion before a copycat Canadian-manufactured version hit the market briefly in August.
Paul Cawthorne, head of Doctors Without Borders in Thailand, said the government was spending 11,580 baht ($330) per patient per month for Kaletra and could cut that bill by two thirds if it switched to a generic manufacturer. "That's a perfectly legal method for them to ensure access to essential drugs for Thai people," he said.
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