The price of drugs becomes more contentious as some classes of drugs increase in price far faster than prevailing incomes. This overall trend appears to intensify with specialized new therapy classes, such as gene therapy where Novartis recently announced a $2 million treatment drug. Gilead’s TRUVADA® is an interesting case in the study for this dilemma. Recently, Gilead’s CEO Daniel O’Day visited Washington to get a grilling from the firebrand Alexandria Ocasio-Cortez. With a $30.2 million pay package, he was interrogated about the actual underlying patents of TRUVADA, and also to explain why the drug costs $8 in Australia and $1,500 in America.
Patent Controversy: Who Owns the Underlying HIV Drug Patents: U.S. Government or Gilead?
It was reported that taxpayers did foot the bill for a lot of the early work that led to the compound that would be TRUVADA. It is claimed that the ability of the drug to prevent HIV was uncovered in federal primate labs in Atlanta, based on some arguments. Additionally, Ocasio-Cortez questioned UCSF’s Dr. Robert Grant as to whether his publicly financed research was built on the government-patented CDC intellectual property from earlier years (that led to TRUVADA). He concluded it was the truth.
The Yale Law School Analysis
Yale Law School conducted a study titled “Summary of Statement on CDC’s Patents for PrEP” and authored by the Yale Global Health Justice Partnership with Christopher Morten as patent attorney. The study revealed that certain patents owned by the U.S. government appeared relevant to the use of TRUVADA® tablets for pre-exposure prophylaxis (“PrEP”) against HIV infection. The Yale Law School summary:
“The key conclusions of the Statement are these: The U.S. Patent and Trademark Office determined that U.S. government inventors affiliated with the Centers for Disease Control and Prevention were the first to determine that the drugs in Gilead’s TRUVADA® tablets can be used to prevent HIV transmission. Through patents that it owns, which we’ve termed “CDC’s Patents for PrEP,” the U.S. government appears to have a legal right to prevent anyone in the United States from using these drugs for this purpose without its permission.”
Government Chooses not to Enforce
Many in Washington didn’t know the CDC possessed such patents. It was a group of HIV/AIDs activists who opened the door to this case when they were researching Gilead’s patents for TRUVADA. Thus far, the government has elected not to enforce its patents and Day noted that Gilead had a collaborative relationship with the agency. Ocasio-Cortez has submitted a letter to U.S. Health and Human Services Secretary Alex Azar for records on what the administration has done to enforce these patents—if anything.
Back to the Price Chasm
TRUVADA (PrEP) costs about $8 in Australia and $1,500 in the United States. When asked by the congresswoman why the difference, Day calmly and coolly explained that TRUVADA is still on the patent in the United States but that would expire on September 2020, and, of course, the implication is that the price will come way down with generic competition. Well, it isn’t as simple as Day portrays. Actually, in Australia, the central government is active in negotiating and determining formulary via the Australian Government Department of Health Pharmaceutical Benefits Scheme. The New York Times last year corroborated the general theme as it highlighted in Africa HIV drugs cost about $75 while in the United States they cost $39,000! The lack of competition was a key problem and that appears to be changing. A lot of money was made in the interim.
Gilead Doesn’t Sit Still
In the meantime, Gilead claimed up on Capitol Hill that they have invested $6 billion in HIV/AIDs R&D. Recently, they demonstrated non-inferior results with Descovy, another HIV drug when compared to TRUVADA. And around the same time, Gilead submitted a supplemental New Drug Application (sNDA) to the FDA for Descovy® (emtricitabine 200 mg and tenofovir alafenamide 25 mg tablets) for pre-exposure prophylaxis (PrEP) to reduce the risk of sexually acquired HIV-1 infection among individuals who are HIV-negative and at risk for HIV. Gilead received a “Priority Review Voucher,” which was submitted with the filing, leading to a six month review time. Gilead’s Board will make sure O’Day earns every dollar of that package.