Brazil has threatened to break the patent on an anti-Aids drug in order to make a cheaper generic version.
Aids campaigners say patents "are bad for health"
Health Minister Humberto Costa said the price of the Kaletra drug was so high it represented a risk to public health.
The government has given US company Abbott Laboratories 10 days to either agree to lower its prices or allow generic copies.
Abbott said patients would lose out in the long run if Brazil went ahead with its threat.
If Abbott does not make an adequate offer, Brazil will start producing a generic drug at a state-run laboratory in Rio de Janeiro, Mr Costa said.
Chicago-based Abbott said in a statement that such a move would put "the government's desire to cut health care spending ahead of patients' need for new and better treatments."
The company said it already sold its drugs to Brazil at a financial loss, but it said it was "willing to work with the government to find a mutually agreeable solution".
Brazil's health ministry estimates that 600,000 of the country's 183 million citizens have HIV/Aids.
The country has won praise internationally for providing free anti-retroviral drugs to anyone who needs them.
Under Brazilian law, the government can break drug patents if it is deemed to be in the public interest. This would be the first time it would have done so.