Gilead’s $21,000 Drug Is Being Blamed for a Plateau in HIV Prevention

(Bloomberg) -- In 2012, Gilead Sciences Inc.’s Truvada became the first drug ever approved to prevent HIV, the virus that causes AIDS. It was a public health triumph that was spurred by years of government-funded research.

Seven years later, efforts to prevent HIV in the U.S. have stalled. Only a fraction of U.S. patients who could benefit from the treatment -- known as PrEP -- are getting it.

AIDS activists and some doctors blame Gilead’s $21,000 annual price for Truvada. They say the U.S. government should leverage patents held by the U.S. Centers for Disease Control and Prevention to push down the price, perhaps by seeking royalties from Gilead.

The furor over PrEP spilled over onto Capitol Hill on Thursday when the House Committee on Oversight and Reform held a hearing that pitted AIDS activists and doctors against Gilead’s new chief executive officer, Daniel O’Day.

“We are suffering under the weight of your company’s pricing,” said Aaron Lord, a neurologist and co-founder of the PrEP4All Collaboration, which has petitioned the Trump administration over Truvada’s cost. He said infection rates have hardly budged since Truvada was approved. “Why not lower the price of Truvada to $15 a month?” he said.

Patent Dispute

O’Day, who took the helm of the biotechnology giant in March, said Gilead is working hard to make Truvada more accessible. The company is donating free drugs for uninsured patients and providing assistance for insured patients who can’t afford their copay. Gilead spent $1.1 billion to develop the drug, which was first approved in 2004 for treatment of patients who already have the HIV virus.

“Gilead invented Truvada, no one else,” O’Day told lawmakers. The CDC’s patents are invalid, he said.

While Gilead created the drug, the U.S. government was heavily involved in making the use of it for prevention a reality. The CDC did early experiments on monkeys that suggested that the two compounds that make up Truvada were more effective than one for prevention. The federal government also obtained patents on the use of the compounds in Truvada for HIV prevention. Those patents weren’t widely known until AIDS activists discovered them recently.

“Gilead seems to be using the CDC’s technology for free without compensating the CDC, without compensating the taxpayer,” Christopher Morten, a patent attorney and research scholar at Yale Law School, said in an interview. He reviewed the CDC’s patents at the request of the PrEP4All Collaboration and concluded they were valid and enforceable.

The U.S. government also sponsored a key trial, published in 2010, that established the efficacy of Truvada for HIV prevention in humans.

“Gilead’s role was limited to donating study medicine and placebos,” said Robert M. Grant, a doctor at the University of California at San Francisco and lead author on the trial, in prepared testimony. He called Gilead “a reluctant partner” in the research, until demand for the prevention use increased in 2013.

Cheaper Abroad

O’Day countered that two Gilead researchers were co-authors on the 2010 prevention trial, and that there was controversy in the early days over the use of the pills for PrEP, which is short for pre-exposure prophylaxis. The company has said that a wide range of factors are contributing to the underuse of PrEP, including stigma, homophobia and limited awareness among providers and patients.

The CEO called the company’s deal with the federal government to donate up to 2.4 million bottles of Truvada annually to help treat uninsured Americans at risk for HIV “one of the largest ever donations of medicine.” The effort, which was announced last week, coincides with a call by President Donald Trump during his State of the Union address in February to put an end to the HIV epidemic.

Truvada generated $3 billion in revenue for Gilead last year, including $2.6 billion in the U.S. The price had risen more than 50% since the drug was approved for prevention, to $1,780 a month, according to data compiled by Bloomberg Intelligence.

Democratic lawmakers repeatedly pointed out that in countries where generic Truvada is available the cost is considerably lower. Copycat treatments sell for about $60 a year, Rochelle Walensky, a Harvard Medical School infectious disease expert, said in prepared testimony. In Australia’s state of New South Wales, where Sydney is located, HIV diagnoses plummeted 25 percent for gay and bisexual men after Truvada was rolled out broadly for prevention, according to a study published in the journal Lancet HIV last year.

The U.S. patent on Truvada doesn’t expire until in 2021, but Gilead has an agreement with Teva Pharmaceutical Industries Ltd. that will allow Teva to introduce a generic version a year earlier. AIDS activists say the introduction of only one generic drug won’t bring prices down significantly.

A consumer lawsuit filed on Tuesday in U.S. District Court in San Francisco claims that Gilead struck deals to block generic competition, even after its patents expire. Gilead has sued several other companies that have attempted to introduce generic versions of Truvada in the U.S. The suits have settled.

To contact the reporters on this story: Robert Langreth in New York at rlangreth@bloomberg.net;Kristen V. Brown in San Francisco at kbrown340@bloomberg.net

To contact the editors responsible for this story: Drew Armstrong at darmstrong17@bloomberg.net, Mark Schoifet, Timothy Annett

©2019 Bloomberg L.P.