First of all, I suggest you read my blog entries of last week, in which I interviewed Dr. Xavier Amador about anosognosia. Also pick up the Amador book I mention, I Am Not Sick, I Don't Need Help. Because even if your brother doesn't have anosognosia, how you couch what you say in response to his threat will make all the difference in whether you can possibly get him to stay in treatment or whether he resists.
I suspect there's an underlying dynamic going on. I believe you also posted a question about your brother feeling like he's all alone and apart from others. To be on meds for seven years and now consider stopping them, there has to be something going on either in his life or inside his head. I was at the five-year mark when I decided to ask the psychiatrist to institute a drug holiday. It didn't work, and I was re-hospitalized three months later.
He may feel that, after seven years, if he is all alone, that the drug isn't working and so why should he continue to take the meds if nothing has changed in his life? I really recommend the day program option.
Also, I feel it is critical you don't try to reason with him or keep trying to get him to see the error of his thinking, when it comes to his claim that "only 2 percent take their meds and it's bad." Do a little motivational interviewing instead. Develop a relationship of trust with him by employing the LEAP technique: Listen. Empathize. Agree. Partner.
You don't have to change your view of the erroneous nature of his belief, you just have to accept the belief as valid and as possibly a symptom of the illness, and instead focus on what his goals are and how his staying in treatment will allow him to pursue those goals and achieve them.
The main thing is, it's important your brother not stay isolated from others. Isolation contributes to paranoia a lot of times, as well as the paranoia causing isolation.
Of course, as you probably know, 3 million people in the U.S. alone have schizophrenia, and if only 2 percent of us took the med, there would be no hope for any of us recovering. It is not a question of arguing this point with your brother. He could possibly be having breakthrough symptoms.
I wish you the best in resolving this. Write back if you feel the need.