For the past several years, it seemed that drugmaker Gilead Sciences’ near-$2,000 monthly U.S. price tag on its all-important treatment and prevention dual-therapy drug Truvada (FTC/tenofovir disoproxil fumarate) was simply a fact of life. The price has been grumbled over by health care payers and activists — and was seen as emblematic of runaway drug costs in the U.S. — but, for years, was not really challenged.
All that seems to have changed in recent weeks, however. First, with revelations that the Centers for Disease Control and Prevention (CDC) owns the patents on Truvada. Then, with Gilead announcing last week that it would donate 2.4 million bottles of Truvada (and its inevitable follow-up, Descovy) to the government over the next decade as pre-exposure prophylaxis (PrEP) for up to 200,000 uninsured Americans. Activists immediately said the step wasn’t as impactful as flat-out lowering the price would be.
Now this week brings not only the news that a large group of HIV-positive activists and health insurers have filed suit against Gilead and drugmakers Bristol-Myers Squibb (BMS), Janssen, and Japan Tobacco for making anticompetitive deals to block HIV generics, but also a hearing in the House of Representatives on the high price of Truvada for PrEP despite all the public money that went into its development. Not to mention a scathing New York Times editorial against Gilead.
Thus, the question of the week is: With the Trump administration calling for an end to the AIDS epidemic in the next decade, has outrage over Gilead pricing finally reached the necessary tipping point? Or is this just all more noise, with no end in sight to the status quo? (Which, as a reminder, looks like continued billions in profits for Gilead, despite the fact that HIV infections in the U.S. have not declined since 2012 — the year the Food and Drug Administration approved Truvada for PrEP.)
Lawsuit Against Drugmakers Alleges Anti-Competitive Tactics
Filed in federal court by nine HIV-positive individuals — including well-known, longtime activists Peter Staley and Gregg Gonsalves, as well as young activist Jason Walker — and two employer-linked health plans, the suit alleges that Gilead, BMS, Janssen, and Japan Tobacco struck anticompetitive deals to keep generic competitors to Gilead’s many Truvada-including drug combinations from coming to market.
In essence, the lawsuit alleges that those companies agreed not to coformulate their own HIV medications with those of other companies, so as not to create generic competition to the many fixed-dose HIV regimens offered by Gilead. Those include well-known combo regimens like Atripla (efavirenz/tenofovir disoproxil fumarate/FTC), Biktarvy (bictegravir/emtricitabine/tenofovir alafenamide), Complera (rilpivirine/tenofovir disoproxil fumarate/FTC), Genvoya elvitegravir/cobicistat/emtricitabine/tenofovir alafenamide), and Stribild (cobicistat/elvitegravir/FTC/tenofovir disoproxil fumarate). The suit alleges that, thanks to these anticompetitive Truvada-driven combos, Gilead currently controls 80% of the HIV drug market.
The suit also alleges that Gilead long ago knew that its drug TAF (tenofovir alafenamide) was a less toxic version of TDF (tenofovir disoproxil fumarate), one of the two drugs in Truvada, but deliberately withheld it from the market for years so that it could squeeze profits out of TDF’s patent run, then extend its patent rights by offering up TAF on the pretext that they had finalized a much-needed improvement to TDF.
“They were potentially harming people,” Staley, the case’s lead plaintiff, told TheBody. “The question for the court is whether the delay of TAF — and then how they manipulated doctors and patients to move from TDF to TAF — is technically illegal or just disgustingly unethical.”
Staley said the alleged Gilead moves were reminiscent of when the first HIV drug, AZT (zidovudine), came on the market in 1987 at the then-outrageous price of $10,000 a year, before Staley and other activists publicly shamed drugmaker Burroughs-Wellcome into reducing the price to $8,000.
“We find ourselves back where we started, with an anticompetitive monopoly situation with HIV drugs,” he said. “After 30 years and 30 drugs, HIV medication should be a mature and robustly competitive market. But it’s not, and our lawyers have figured out why. Basically we have a company, Gilead, that developed only two drugs, TDF and TAF, but that has leveraged and abused the system for all it’s worth to create dominance and exorbitant prices.”
According to Staley, the suit’s army of lawyers delved into Gilead’s long-available but overlooked Securities and Exchange Commission filings to discover deals that effectively blocked up to two dozen HIV generic combos from coming to market at prices that would have been around $20,000 annually, versus Gilead’s $35,000.
“If we’re fighting for a competitive market and innovation, then we don’t want a monopoly controlling our lives, slowing down access, and keeping the epidemic going,” said Staley, noting that in 2017 the CDC said that 49% of people with HIV in the U.S. were virally suppressed. “That’s the lowest rate in the world among comparable high-income countries. If people think there’s no relationship between the price of Gilead’s drugs and our suppression rates, they haven’t looked beyond their own copay assistance cards and their own privilege to study the issue deeply enough.”
Ideally, said Staley, a court would rule in the short term that TAF must become generic immediately, then rule down the line that Gilead must stop its anticompetitive ways. There is also the possibility of a settlement in which an enormous amount of Gilead money would be spread out among all payers for HIV drugs — individuals as well as public and private plans — who have overpaid for Gilead meds all these years.
But, he noted, there was also the possibility that the plaintiffs in the suit might split, with health plans taking a settlement while the HIV-positive activists insist on going to court to make Gilead change its ways.
The whole thing, he said, might take three to five years to play out. But Staley pointed optimistically to a 2013 Supreme Court ruling on a comparable case, FTC v. Actavis, that broke up a so-called “pay for delay” situation in which two drugmakers struck a deal to block competition.
“That case doesn’t raise exactly the same issues [as the Gilead case], but it has a similar feel,” said Scott Hemphill, an antitrust professor at New York University School of Law who has conferred with Staley and the other plaintiffs in the case.
All drugmakers named in the suit were contacted via email by TheBody for comment. A rep for Gilead replied: “We have entered into partnerships with other companies with the goal of bringing lifesaving therapies to patients in need. Any suggestion that we had improper motives is absolutely false.” A rep for BMS said that the company was reviewing the complaint and had no comment at this time.
A rep for Janssen said: “We enter into collaboration agreements to make lifesaving fixed-dose combination regimens available that offer better outcomes as quickly as possible to people living with HIV. Our work continues to innovate across the continuum of HIV care, from prevention to treatment, and hopefully, to cure.”
After Weeks of Headlines, Congress Calls in Gilead and Advocates
Called by Rep. Alexandria Ocasio-Cortez in the House Oversight Committee, the hearing on Thursday, May 16 (which is archived on YouTube, included a panel on which Gilead CEO Daniel O’Day and Steve Ezell of the Information Technology and Innovation Foundation defended the pharma business model. The panel also featured Rochelle Walensky, M.D., M.P.H., a Harvard Medical School professor and respected HIV clinician-researcher; Tim Horn, the director of medication access and pricing at the HIV policy organization NASTAD; and Aaron Lord, M.D., a New York University School of Medicine physician who is a member of the PrEP4All Collaboration, an advocacy group calling for the U.S. government to break the patent on the use of Truvada for HIV prevention.
Walensky, Horn, and Lord argued that Truvada’s price had to come down dramatically if the estimated 1.1 million Americans at high risk for HIV — most of whom are gay men of color — are going to get easy access to PrEP. Robert Grant, M.D., M.P.H., a University of California-San Francisco Medical School professor who led much of the early research on PrEP, explained that PrEP was mainly funded with taxpayer dollars and researched by the government.
“There are many reasons for the low uptake of PrEP in this country, but financing and pricing — the subject of today’s hearing — are undoubtedly among them,” said Horn. He later said: “A long-term sustainable approach to PrEP access requires a competitive generic market.”
Interestingly, even though it was reported the day before, the lawsuit against Gilead did not come up in the hearings until the end, and then only briefly. Rep. John Sarbanes (D-MD) asked O’Day if it was true, as the suit alleges, that Gilead knew TAF was less toxic than TDF years ago, but put TDF on the market first for purposes of maximum patent extension. O’Day denied it, but Lord pointed to a quote from Gilead’s CEO back in 2011 showing that the company indeed knew.
Unsurprisingly, questions and comments from representatives on the committee broke down along partisan lines, with Republican reps including Mark Meadows (NC) and Jim Jordan (OH) profusely thanking drugmakers like Gilead for bringing lifesaving meds to Americans via good old-fashioned capitalism, and saying it was terrible that they should be publicly vilified before Congress by Democrats looking to make “a political statement.”
Political or otherwise, statements on the Democratic side of the hearing were often blunt.
“You have used your power to manipulate our patent system … and line your pockets,” Rep. Ayanna Pressley (MA) said to O’Day, adding, “Your failure to [make PrEP affordable] is indefensible.”
Rep. Rashida Tlaib (MI) asked, “How much profit is enough, Mr. O’Day? When does it become immoral?” She then added: “Truvada belongs to us all.”
Eleanor Holmes Norton, Washington, D.C.’s non-voting representative, asked O’Day point blank: “Why don’t you simply lower the price of PrEP?”
“If we had lowered the price of our meds even a decade ago, we wouldn’t be sitting here with the innovations that changed the face [of HIV treatment],” O’Day replied.
“You’ve earned $36 billion [from Truvada], and you’re telling me that without that rate of revenue, we wouldn’t have PrEP at all? That the price is justified?” countered Holmes Norton.
O’Day, who came to Gilead last year with a pay package of more than $30 million, replied yes.
Ocasio-Cortez turned the focus not towards O’Day personally, but on the perverse incentives of the system.
“This isn’t about you,” she told O’Day. “I’m not here to vilify the work you’ve done, because you’re responding to a set of incentives. If you resigned today, someone would [do exactly what you’ve done]. I blame us. I blame this body,” she said, meaning Congress. “Every single developed country in the world guarantees health care as a right except us, because we can’t get it together. … We have legislated a system that allows [this] to happen.”
Ocasio-Cortez credited the hearing to Claudia Pagan, her 23-year-old staffer, for “first listening to the activists who raised this issue.”