Thailand holds drug giants over a barrel

The government of Thailand, has already upset some of the big drug companies by overriding patent licenses for generic versions of heart and HIV/AIDS pills, and is now planning to go one step further unless drug giants cut their prices.

The Thai health ministry is considering which drugs Thailand needs and will either make or buy generic copies while haggling for "appropriate" prices of patented versions.

Government officials say a discount from drug companies will ensure this will not happen and they say this should not be regarded as a threat, but a negotiation for the country's benefit.

The Health Ministry last week issued compulsory licenses for the heart disease drug Plavix, made by Bristol-Myers Squibb and Sanofi-Aventis, and Abbott Laboratories' Kaletra to treat HIV/AIDS.

Thai health officials say the licenses will save the country up to 800 million baht ($24 million) a year, and while the move has been praised by AIDS activists, it has drawn flak from Washington and the drug industry, who are urging the ministry to rescind them.

The Thais say they will enforce the licenses if they fail to get the two patented drugs from the firms at prices they are prepared to pay.

The move would see a considerable drop in price for both drugs and make them available to a far wider population of sufferers.

Doctors Without Borders in Thailand support the government's action, saying a generic version of Kaletra would cut spending by two thirds.

Rumours that drugs which deal with cancer, cholesterol-reducing drugs and some anti-biotics are on the list have not been confirmed.

However reports that Rituxan, a big-selling drug for lymphoma, and a rheumatoid arthritis drug owned by Genentech are also under consideration appear to have more foundation.

World Trade Organisation (WTO) rules allow governments to declare a "national emergency" and license the production or sale of a patented drug without the permission of the foreign patent owner.

This is the procedure the Thai authorities are currently pursuing.