The global pharmaceutical industry body IFPMA warned on Wednesday that Brazil’s decision to break a U.S.-held AIDS drug patent would turn foreign firms against cooperating with the country’s health programmes.

In a statement on the long-mooted Brazilian move, expected to go into force later on Wednesday, Director-General Harvey Bale also suggested that the action amounted to theft.

Brazil’s Health Minister Humberto Costa said last week that his ministry was issuing a compulsory licence order for the Kaletra antiretroviral (ARV) drug on the Sao Paulo office of Illinois-based Abbott Laboratories Inc.

“Issuing a compulsory licence will not help patients,” said Bale, a former U.S. trade negotiator whose International Federation of Pharmaceutical Manufacturers and Associations is based in Geneva.

“Companies are already providing their products in Brazil at dramatically reduced prices. A compulsory licence order would send a strong signal to companies that Brazil does not welcome cooperation with pharmaceutical companies to address Brazil’s public health needs.”

Costa told reporters in Geneva on June 27 that the Brazilian government was taking the action to slash the cost to its health budget of providing the drug free of charge to tens of thousands of AIDS sufferers.

He said Abbott had refused to negotiate a voluntary licence, under which a Brazilian state-run laboratory would manufacture the drug and pay the company the actual cost of production.

Under the compulsory licence, the first-ever issued by Brazil in a long-running battle over pricing between several developing countries and multinational companies, the price would be slashed from $1.17 a pill to 68 cents.

But Bale said that despite Brazil’s claims that the move was necessary to limit health spending, it was spending less on AIDS medicines than it did five years ago, while heavily subsidising local producers of drugs to treat the virus.

The compulsory licence move was, he declared, “more an act of trade policy, promoting the interests of local manufacturers, than a health policy measure”.

The IFPMA director-general quoted former Brazilian President Fernando Henrique Cardoso as once saying that no country became rich through stealing the property of other nations. “No country will become healthy via theft, either,” Bale declared.

The Brazilian move has also been criticised by Abbott and the U.S. industry body PhRMA as likely to hit at research on new drugs, but there has been no formal statement from the U.S. administration of President George W. Bush.

One U.S. trade official said last week that Washington was monitoring the situation and was in touch with both the Brazilian government and the industry.