AIDS treatment often entails a combination cocktail of drugs. Thus, Efavirenz is typically just part of an antiretroviral therapy regime. The Thai government disperses other off-patent drugs, but as AIDS patients are now living longer, and more advanced therapies have become available, drug costs have skyrocketed.

Thailand runs the state-owned Government Pharmaceutical Organization (GPO). A GPO spokesman said it would import Efavirenz from India until able to make its own generic version; the switchover to domestic production is expected in mid 2007.

The government estimates it can save 4 billion baht over the next five years, enabling it to treat 100,000 patients. At current Efavirenz prices, the budget allows only 17,000 people treated.

Complaining that the government should have first consulted with the company, Merck is squirming, challenging the decision, saying it would be willing to negotiate further price reductions, or even possibly voluntarily give the GPO a license to produce a generic version of Efavirenz. Merck claims it has had a "no profit" price on Efavirenz since 2001, and knocked 20% off the price in March. "Thailand has one of the lowest prices of this product in the world," a Merck spokesman pleaded.

Thailand is one of the few developing countries to have a comprehensive program for preventing and treating HIV.

Under the government plan, Merck will receive a 0.5% royalty on sales of the generic version of Efavirenz.

Under the rules of the World Trade Organization, government may issue a compulsory license of a patented drug without the consent of its owner if declaring a "national emergency." An estimated 600,000 Thais now have HIV, of a population of 65 million. AIDS is the leading cause of death in Thailand.