President Luiz Inacio Lula da Silva of Brazil's has said that his country will bypass the commercial patent on a crucial anti-AIDS drug manufactured by Merck, the US pharmaceutical giant, in order to ensure that those who desperately need treatment can get a cheaper, generic Indian-made version.
Brazil will import a non-patented version of the restricted Efavirenz drug. Merck had offered Brazil a 30% discount on the cost of the drugs but the Brazilian government, which has been in negotiation for many months, says it should pay the same discounted price as Thailand.
Merck offered Brazil the pills at $1.10 but, pending further legal moves, the country will now source Indian-made versions of Efavirenz for just $0.45 each.
Labour unions, church groups, health activists and anti-poverty campaigners have welcomed the decision. They say that Brazil has already made too many concessions to the US on other issues.
"From an ethical point of view the price difference is grotesque," declared President Lula. "And from a political point of view, it represents a lack of respect, as though a sick Brazilian is inferior."
The decision means that Merck, which holds the patent for the drugs, will only get a small royalty for the generic versions of the drugs purchased. Under Brazilian law and rules established by the World Health Organisation, such a licence can be granted in a health emergency or if the pharmaceutical industry abuses its pricing.
Analysts say that some 75,000 Brazilians use Efavirenz, out of a total of 180,000 people who receive free antiretroviral drugs from the government.
"This is certainly an important advance in terms of widening access. We are very happy that Brazil is moving in the right direction," said Michel Lotrowska of NGO Medecins Sans Frontieres.
Mereck says that the Indian producers are in violation of intellectual property and copyright law, that Brazil's action amounts to commercial theft, and that other companies involved in medical research will be dissuaded from innovating new drugs.
But campaigners concerned about the stranglehold of the giant pharmaceutical companies and big private corporations say that life-saving treatments should be taken out of the hands of profiteers, and that public investment and partnership strategies for research are needed instead.