Researchers working for Sergio Arouca National School of Public Health (Ensp/Fiocruz,  from Portuguese Escola Nacional de Saúde Pública Sergio Arouca) have published the report of the study called Mercosur-EU Free Trade Agreement: Impact analysis of TRIPS-plus measures proposed by the EU on public purchases and domestic production of HIV and Hepatitis C medicines in Brazil, which simulates the expenses of the Brazilian Public Healthcare System (SUS, from Portuguese Sistema Único de Saúde) with the medications used in the treatment of HIV/AIDS and hepatitis C, in case the European Union’s (EU) proposals for the intellectual property chapter of the Free Trade Agreement (FTA) are accepted by the countries that integrate the Mercosur.

The study shows that the Brazilian government will spend an additional R$ 1.9 billion (roughly US$ 630 million) a year with the purchase of these medications alone: an average of R$ 1.8 billion (roughly US$ 600 million) for hepatitis C and R$ 142 million (roughly US$ 47 million) for antiretrovirals (ARVs). 

The research was conducted based on the analysis of the purchases of 22 ARVs by the SUS in 2015, and of the purchase of the three available hepatitis C medications in 2016. The figures found in the study correspond to the yearly cost of treating 60 thousand hepatitis patients with state-of-the-art medications, as well as 57 thousand HIV patients.

‘This is only the tip of the iceberg, because the research is restricted to the 25 medications used in the treatment of these two diseases alone. The government buys many other medications for dozens of other diseases. The impact of the EU’s proposals for the intellectual property chapter may represent an expense much higher than the R$ 1.9 billion a year estimated by the research,’ states Gabriela Chaves, researcher at the Pharmaceutical Assistance and Medication Policies Department at Ensp/Fiocruz.

During the FTA’s rounds of negotiations, which took place in Brasilia from the 2nd to the 6th of October, the goal of the EU regarding the intellectual property chapter is to increase the protection standards, with the adoption of measures called Trips-plus, which will guarantee greater market exclusivity for multinational companies. These measures will provide more protection than those that are already provided in the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) of the World Trade Organization (WTO), to which Brazil is a signatory country.

Protection of intellectual property in Brazil is already ample. In 1996, Brazil decided to fulfill its obligation with the WTO and approved the current law that provides patent protection for medications, an action the country was only supposed to undertake nine years later. ‘It is the SUS that pays this bill, which became more expensive with the Trips-plus measures,’ evaluates Gabriela. ‘What is at stake in the results of these negotiations is the sustainability of the public healthcare system, since the measures that strengthen the monopoly of the essential technologies in healthcare enable companies to charge high prices, threatening the principle of universality of the SUS,’ she states.

The impacts of the patent protection for medications initially hit the SUS with the adoption of the first patented ARVs at the end of the 1990’s. The ARVs used before the patent protection were produced locally and at lower prices than those charged by the multinationals. When the patent protections came into effect in 1997, the Brazilian government had to adopt different strategies to reduce the prices of the medications that were part of the monopoly, such as the protection of public healthcare flexibilities provided in the WTO Trips agreement to purchase and produce generic medications, thus guaranteeing the universality of the HIV treatment.

In 2007, for example, the government compulsorily licensed the medication Efavirenz, which enabled the importation and posterior local production of generic versions of this medication that were between 67% to 77% cheaper than the price of the patented product. The same has not yet happened for hepatitis C medications.

The research conducted by Fiocruz follows the recommendations of the UN’s High-Level Panel on Access to Medicines, which include the development of studies to evaluate the impact that trade negotiations in the field of intellectual property may have on public healthcare and human rights, and it may serve as a warning for the other Mercosur countries.