By Stan Lehman

A.P. writer

SAO PAULO, Brazil—The Brazilian government and Abbott Laboratories have agreed to reduce the price of an anti-AIDS drug by nearly 30 percent this year, the Brazilian Health Ministry and the company said last week.

North Chicago-based Abbott previously said it would reduce the price of the drug Kaletra in 45 "low and low-middle income countries," such as Brazil.

"We wanted Brazil to benefit from the same price offered to other countries in the same level of economic development," Heather Mason, Abbott's vice president for Latin American and Canada, said Wednesday. "It makes it easier for the government of Brazil to provide medicine to a growing number of patients."

The agreement lowers the price of each Kaletra pill to $0.73 from $1.04 until the end of the year. In 2008, each pill will cost $0.68, or "$1,000 per patient per year," the Health Ministry said.

The announcement comes as Abbott remains locked in a standoff with Thailand, which has said it will scrap Kaletra's patent in order to use a cheaper generic version of the medication. In response, Abbott blacklisted the country from receiving the company's new medications.

Kaletra, a protease inhibitor, is one of the most commonly used anti-AIDS drugs in Brazil, which provides free AIDS drugs to anyone who needs them. Brazil manufactures generic versions of several drugs that were in production before the country enacted an intellectual property law in 1997 to join the World Trade Organization

In a pricing dispute over another AIDS drug, efavirnez, Brazil in May bypassed the patent on that drug, held by U.S. drug manufacturer Merck & Co., to manufacture or buy generic versions.

In that case, President Luiz Inacio Lula da Silva issued a "compulsory license," a legal mechanism that allows a country to manufacture or buy generic versions of patented drugs while paying the patent holder only a small royalty.

The Brazilian government rejected Merck's offer to sell the drug at a 30 percent discount—for $1.10 per pill, down from $1.57. The country was seeking to purchase the drug at $0.65 per pill, the same price Thailand pays.

Brazil had threatened to use similar measures to override Kaletra's patent.