Brazilian President Luiz Inacio Lula da Silva on Friday signed a decree allowing his country to ignore U.S. pharmaceutical giant Merck's patent on the AIDS drug Efavirenz and instead to buy a cheaper generic alternative from India.

With the decree, Brazil will be able to import generic versions of Efavirenz from three companies in India, and the price for the drugs will be 72 percent lower than the price charged by Merck.

The Brazilian Ministry of Health had been negotiating with Merck for three years to bring down the Efavirenz price.

Lula had criticized Merck for charging higher prices to Brazil than to other countries, which he regarded as "disrespectful."

According to the Brazilian Ministry of Health, Merck charges Brazil 1.59 U.S. dollars per capsule, but charges Thailand only 64 cents.

Merck initially proposed a two percent reduction in the Efavirenz price, which was promptly rejected.

On April 25, the federal government classified the drug as being "of public interest," and asked Merck to present another proposal within a seven-day deadline.

Merck offered a 30 percent price cut, but the Ministry of Health still considered it unsatisfactory, as it was possible to purchase the generic version of the medicine for as low as 0.45 of a U.S. dollar.

Minister of Health Jose Gomes Temporao then advised President Lula to sign the decree establishing the "compulsory license" for the anti-HIV drug, which means Brazil may import the drug at lower prices from other overseas suppliers or even produce it locally.

Health authorities expected the new measure to save up to 30 million U.S. dollars in 2007, as 75,000 of the 200,000 AIDS patients whose treatment is funded by the government are expected to use Efavirenz by the end of the year.

Source: Xinhua