Swiss drug maker Roche AG has agreed to provide the raw ingredient to allow Vietnam to produce its antiviral medicine Tamiflu, one of the best defences against bird flu in humans, the company said on Wednesday.

Forty-two people have died from bird flu in Vietnam and there are growing fears that the H5N1 virus could mutate into a form that can be passed from human to human, sparking a pandemic in which millions around the world could die.

Head of pharmaceuticals Bill Burns told reporters at the company’s headquarters that Roche would supply active pharmaceutical ingredient (API) to Vietnam and the authorities would seek a local company to formulate it into tablets.

“They (Vietnam) want to stockpile it and we are in talks with them about the best way to go forward,” explained Roche spokesman Daniel Piller. “We are in talks with them and they have no intent to break patents or involve compulsory licensing.”

Under compulsory licensing, countries are allowed to produce patent-protected drugs to address health emergencies.

Roche is the only manufacturer of Tamiflu, which can reduce the severity of flu and might slow the spread of a much-feared pandemic should the virus, which has killed more than 60 people in Asia, become able to spread from person to person.

The company said on Monday it would raise production to 300 million treatments by 2007.

Roche also set out the pricing policy for Tamiflu, announcing that it would supply to governments in developed countries for 15 euros ($17.6) for a 10-tablet course of treatment and 12 euros for the developing world.

Roche also intends to offer API sufficient for one treatment course at 7.70 euros in the developed world and 7 euros in poorer countries.

Burns added Roche was in continuing discussions with U.S. company Gilead Sciences Inc., which originally developed Tamiflu, in a dispute over rights to the drug - but said it was too soon to say when the issue might be settled.

PANDEMIC FEARS

Roche said earlier this week it had received more than 150 requests from third parties to produce Tamiflu and was in early talks with eight companies, selecting potential partners for more detailed discussions by the end of November.

GlaxoSmithkline produces antiviral drug Relenza which is believed to be as effective as Tamiflu but is less appealing because it is a powder that must be inhaled. Earlier on Wednesday, the Voice of Vietnam state radio said Roche had agreed to give bird flu-hit Vietnam the right to make Tamiflu and that production could start early next year.

Vietnam has 57 plants capable of producing the drug.

Under pressure from generic drug companies and politicians in developing nations and the United States, Roche agreed in October to discuss granting licences to make versions of Tamiflu.

Vietnam has ordered 25 million Tamiflu tablets and the radio said Roche had agreed to deliver 2 million tablets between now and the end of the year, eight million tablets during the first half of 2006 and 15 million tablets in the second half.

Meanwhile, Vietnamese researchers said they would begin producing bird flu vaccines for humans from Thursday.

The vaccines would be tested on volunteers before mass production, the online newspaper VietnamNet quoted officials from the Health Ministry as saying.