Thailand moves to pay for drugs to avoid sanctions

BANGKOK (Reuters) - Thailand's new government could pay for four cancer drugs instead of overriding their international patents, Health Minister Chaiya Sasomsap said on Wednesday, fearing possible trade sanctions against his country.

The cancer medicines targeted by the previous military-appointed government for compulsory licenses, which allow countries to make or buy cheap, copycat versions of drugs, would cost $24-$27 million a year.

"Eight hundred million to 900 million baht a year for patented cancer drugs is not a big deal for the government to spend on the people's health," Chaiya said told Business Radio.

"We would lose much more than that if the United States decides to impose sanctions or boycott us over the issue," said

Chaiya, who will meet with Commerce and Foreign Affairs ministers on Thursday as part of a review of the drug patent policy.

Former Health Minister Mongkol na Songkhla overrode Merck's AIDS drug Efavirenz in late 2006, arguing that Thailand could not afford patented drugs for a national health plan that covers about 80 percent of the country's 63 million people.

He later did the same on a Sanofi-Aventis heart medicine and an AIDS drug made by Abbott Laboratories, which refused to register several new medicines in Thailand.

In his final weeks in office, Mongkol targeted Letrozole, a breast cancer medicine made by Novartis AG, the breast and lung cancer drug Docetaxel by Sanofi-Aventis and Roche's Erlotinib, used for treating lung, pancreatic and ovarian cancer.

A license issued on Glivec, a leukemia drug, was later cancelled after its maker, Novartis, agreed to supply it free to hundreds of Thai patients.

Chaiya has questioned the legality of the moves on the cancer drugs, which won praise from health activists who say they will hit the streets in protest if he scraps the licenses.

Mongkol has insisted he followed Thai laws and World Trade Organisation rules, which allow countries to override a drug patent if it is deemed critical to public health as long as the medicines are meant for domestic use.

However, Commerce officials have worried about the policy's impact on relations with key trading partners, Europe and the United States, home to several pharmaceutical giants.

Drug firms and their allies have accused Bangkok of stealing intellectual property. The United States put Thailand on its "priority watch list", citing weaker respect for patents.

Washington has not threatened trade sanctions, but Chaiya said Thai Commerce Ministry officials fear a further downgrade could put Thailand at risk of American trade retaliation.

"We have to look at the big picture when we run the entire country," said Chaiya, a veteran politician with no medical background.

($1=32.87 Baht)

(Writing by Darren Schuettler; editing by Jeremy Laurence)