BRASILIA Brazilian health officials threatened to proceed with domestic production of anti-AIDS drugs made by two international pharmaceutical firms unless they lower their prices.

The companies, Merck and Roche, produce medicines used in so- called AIDS "cocktails", distributed free by the Brazilian government to all HIV-positive patients.

Brazilian health authorities claim Merck and Roche sell their two products, Efavirenz and Nelfinavir, far too expensively.

"If we cannot reach a satisfactory agreement with the laboratories over a price reduction, we will begin to produce both medications in Brazil," Brazilian Health Minister Jose Serra warned.

Brazilian law allows for patents on industrial property rights to be suspended for medical products imported for three consecutive years, as long as the firm has not begun making the medication locally.

Last year, Brazil spent $108 million in importing four AIDS medications, about 36 percent of the cost of treating its 100,000 HIV-infected persons. The remaining costs go to pay for the other eight medications produced locally for the cocktail.

(DPA)