Brazil has agreed not to break a pharmaceutical patent on a crucial AIDS drug after a U.S. drug manufacturer agreed to significantly reduce the price of the drug.

The agreements were announced late Friday after 10 days of talks between Brazil's government and Abbott Laboratories.

The drug manufacturer will cut prices, saving Brazil's Ministry of Health over $259 million over the next six years. Abbott also agreed to a technology transfer allowing Brazil's state-run pharmaceutical labs to begin producing the drug Kaletra in 2009.

Brazil had accused the U.S. drug maker with exorbitant pricing, and said the government planned to locally produce a cheaper generic copy of the patented drug.

Abbott denied the overpricing charges, and said Brazil's plans were illegal.

Some information for this report provided by AFP and AP.