Homework Question on Brazil
- Please answer the following questions for the case titled Brazil: Leading the BRICs case.
- In the compulsary licensing issue who is right, Brazil or Merck? (1 page – evaluate from both perspectives)
- What are the best arguments Brazil and the United States can make to the WTO’s dispute settlement body concerning cotton subsidies? Who do you side with? (1 page)
Homework Answer on Brazil
Brazil is currently ranked among the leading world economies measured in terms of Purchasing Power Parity. Until recently, Brazil was categorized as the most rapidly growing economies, which rendered it a new international recognition. These achievements have been attributed by various attempts to enhance economic progress, which include demands for international trade agreement reforms, engagement in legal disputes with oppressive countries, adopting the concept of compulsory licensing and membership in WTO.
The compulsory licensing issue involving Brazil and Merck
The need for compulsory licensing was attributed by increased Brazilian government spending on antiretrovirals even though there had been declining prices on these drugs in other parts of the globe. Brazil was however experiencing increasing costs caused by a growing number of patients and increased cost on each patient. From the negotiations involving Brazil and Merck, it is obvious that Brazil was right in taking the stand for price reduction on drugs.
The fact that Merck was selling the same drugs at a cheaper price in other countries showed that a similar thing would have been applicable in Brazil. Merck, as it appears, was however interested in taking advantage of Brazil especially because constant negotiations only resulted to modest discounts given to the Brazilian government from the company. Cost reduction on Brazil would have been beneficial to Merck because the Brazilian government was willing to issue a single yearly purchase, which would save Merck marketing cost and production planning.