Abbott Laboratories says that it has negotiated an agreement with the Brazilian government regarding the supply of its AIDS drug, Kaletra (lopinavir/ritonavir), after the latter threatened to grant a compulsory license to the product.

Last month, Brazil gave Abbott an ultimatum – slash the cost of Kaletra supplies to Brazil by 42%, to $1.17 per pill, or lose its exclusivity in the country [[01/07/05d]]. The Brazilian government insisted this measure is in accord with the TRIPs (trade-related aspects of intellectual property rights) agreement, and specifically the Doha amendment that allows developing countries to temporarily suspend patents on products needed to alleviate a legitimate health crisis.

Abbott, which said it was not willing to negotiate its intellectual property rights, said that the agreement does not specify a price per capsule, with the cost of Kaletra “dependent on the number of patients treated.” The company has also agreed to help Brazil manufacture the product locally once the patent expires in 2015.

The Brazilian government noted that 23,400 patients currently receive Kaletra, but that the number is expected to rise to 60,000 in six years. It added that the agreed price reduction meant that at least $16 million would be saved next year, and up to $259 million would be saved over the six-year period.