By Corinne Podger
The Brazilian government has warned three major drug companies that they must dramatically lower the price of anti-Aids drugs - or it will break their patents and allow cheap copies of the drugs to be imported.
The government took its first official step towards allowing generic drugs to be imported by passing a decree changing drug regulations on Friday.
Protesters around the world have called for cheaper drugs
More than 500,000 Brazilians are HIV-positive or have Aids.
Since 1997, the government has offered free anti-Aids drugs to anyone who needs them - at a cost to the country over $100m a year.
The Brazilian government has been engaged in talks with the three pharmaceutical firms, Merck, Roche and Abbott, which produce the main drugs used in its national programme.
But, after failing to get an agreement on bringing the price of patented drugs down by around 40%, the Brazilian government has now issued a decree changing its regulations.
The decree would allow cheap copies of drugs to be imported or produced locally.
Brazil's health minister, Humberto Costa, claimed the move would be protected under a new World Trade Organisation resolution, which allows poor countries unable to produce vital drugs themselves to import cheap copies.
Mr Costa said the generic drugs would probably be sourced from China and India, and said he would know within a month whether the country would import generics or produce them in Brazil.
Roche, Merck and Abbott have said that negotiations will continue, and that they still hope an agreement can be reached.