Pirates of the Brazilian

By Chuck Muth

In the 2003 movie "Pirates of the Caribbean: The Curse of the Black Pearl," the evil mutineer's name was Captain Barbosa. How ironic, then, that the current Brazilian health minister's name is Jarbas Barbosa. The booty Minister Barbosa is looting today, however, isn't gold coins, goblets and trinkets, but the "secret recipes" for modern miracle drugs which are worth gazillions more than Captain Barbosa could have imagined in his wildest, rum-induced dreams.

At issue here are the extremely valuable patents on various AIDS medicines. American pharmaceutical companies spent a fortune developing them. The Brazilians want them. But the Brazilians don't want to pay for them. So Captain...er, Minister Barbosa is planning to just...well, take them.

Brazil - endeavoring to become a socialist paradise under its current president, former union leader and avowed communist Luiz Inacio Lula da Silva - provides a HillaryCare-type of system in which the government provides free HIV treatments to all its citizens. And socialized health care of that kind is, naturally, expensive.

So on June 1st, Brazil's lower house approved a bill suspending patents on AIDS-fighting drugs. The bill's sponsor declared, "Constitutional protection for patents is not absolute, but subordinate to social interests." And a deputy for the Workers' (of the World, Unite!) Party added, "Patents have to be suspended if they're harming public health." Both lines could easily have been lifted right off the pages of "Atlas Shrugged."

The patents in question are for the unique formulas for anti-AIDS drugs developed by American pharmaceutical companies after many years and millions of dollars worth of research. Once a company is issued a patent on such new drugs, it's allowed exclusive control over the sale and licensing (allowing approved third parties to manufacture and sell the drug for a fee) of that medicine for a set number of years, after which generic copycat companies are provided the formula so that they may legally manufacturer the drugs, as well.

But here's how the Brazilian pirates work. They take samples of the legitimate drug and give it to their chemists and scientists, who then go into the laboratory and break down the drug to discover its secret formula. Kinda like Plankton in SpongeBob SquarePants, who is forever trying to replicate the secret recipe for Mr. Crab's crabby-patties. It's a process called "reverse engineering," and it doesn't always result in the creation of a knock-off drug which is as safe or effective as the patented drug. And once the pirates have what they believe (hope) is the correct secret formula, they begin producing the drugs themselves rather than buying them from the original manufacturer.

Of course, like every good crook, the Brazilians have found a way to justify and rationalize their piracy. See, there's a clause in the World Trade Organization (WTO) agreement, which both Brazil and the U.S. have signed, commonly known as TRIPS. As Drug Industry Daily explains, TRIPS "allows a developing country to temporarily ignore drug patents to bring affordable drugs to its population in times of health emergencies."

But here's where the Brazilian pirates get tripped up over TRIPS.

First, Brazil is not a developing country. Brazil is the 10th largest economy in the world; larger even than Russia, Canada or Mexico. It not only has a subsidized airline company, it even has a space program. In the meantime, it spends only about 2 percent of its GDP on health care (the U.S.
spends about 28 percent).

No, Brazil CAN afford the AIDS drugs its socialist government offers its citizens for free; it just has "other priorities" it wants to spend its money on.

Second, while AIDS is indeed a serious health care concern in Brazil, as it is all over the world, it is NOT a national emergency. The HIV-infected population in the United States is approximately 0.5 percent. In Brazil, it's about 0.6 percent. This, according to the Population Resource Center, compares with countries in sub-Saharan Africa with HIV-infection rates of 20 percent or more.

No, Brazil does not have a "national emergency" which would allow its piracy under TRIPS.

And speaking of Africa, here's where the Brazilian pirates really hope to score. You see, they're not looking to rip off American drug companies "temporarily" to address their own country's "national emergency." No, no, no. Instead, once the Brazilian mad scientists "reverse engineer" an AIDS medicine, Brazil's government profiteers want to export their Franken-drug version to African countries at a discount - but still with enough of a profit margin for the drug pirates to laugh all the way to the bank, of course.

And it's not just AIDS drugs the Brazilian pirates are plundering. The Dallas Morning News notes that "Brazil is an important producer and destination in the global piracy market" of U.S. movies, books and software products, costing American companies upwards of a billion dollars a year.

Tommy Jefferson knew how to deal with pirates. Back in the early 1800s, he dispatched the United States Marines to send the Barbary Pirates the unmistakable message that Uncle Sam was mad as hell and wasn't going to take it any longer.

And although President Bush certainly won't be sending leathernecks from the shores of Tripoli to the halls of Sao Paulo, what he ought to do is tell the Pirates of the Brazilian that if they don't immediately cease-and-desist all such activities, he'll cut the nation off as a preferred trading partner when Brazil next comes up for review in September. That would eliminate lower tariffs on Brazilian exports to the U.S., currently valued at some $2.5 billion. That would be a shot across the bow which these pirates would clearly understand.

Can I get an "aaaay" and an "arghhhh"?

Chuck Muth is president of Citizen Outreach, a non-profit public policy advocacy organization in Washington, D.C. The views expressed are his own and do not necessarily reflect the views of Citizen Outreach. He may be reached at chuck@citizenoutreach.com.