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The drugmaker Gilead Sciences has seen its fortunes buoyed by its blockbuster hepatitis C drugs in the last two years. But that cash flow is slowing down — and it’s hitting the company’s bottom line.

Combined sales for the powerful drugs, sold as Sovaldi and Harvoni, were $4.3 billion in the first quarter of this year, missing the average analysts’ estimate by nearly $300 million and falling $600 million below the previous quarter, Gilead reported on Thursday. That helped drive a lower-than-expected profit margin for the company.


The company has said it expects its US sales of its hepatitis C drugs to flatten this year.

The high prices of Sovaldi and Harvoni have made the drugs flash points in the public and political uproar over drug prices. The medications are priced at $84,000 and $94,500, respectively, for a full course of treatment, though patients and their insurers generally pay far less thanks to negotiated discounts.

Gilead got a victory this week when New York agreed to pay for more Medicaid patients to get its hepatitis C drugs. But the earnings out Thursday showed that wins like these aren’t translating to higher sales.


Gilead’s hepatitis C drugs actually reached more patients in the United States, the company’s biggest and most important patient market, this quarter compared to last quarter. Even so, revenue was down, in large part because of steep discounts and rebates to offset the high list price of the medications.

CEO John Milligan told investors on Thursday’s earnings call that it’s “a remarkable achievement” to have treated nearly 1 million patients worldwide with the hepatitis C drugs, which can cure the chronic liver disease in a matter of weeks. The company said it believes there’s a large untapped market of 3 million hepatitis C patients in the US, though half of them have never been diagnosed with the disease.

The company is also trying to sell its drugs overseas, including in developing countries where it has had to lower its price.

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With revenue from the hepatitis C drugs slowing, some investors are clamoring for Gilead to strike new deals. Earlier this month the company said it would pay $400 million for a drug from Nimbus Therapeutics to treat fatty liver disease. Milligan said it’s open to doing more.

“We are actively assessing options,” he said, “and we will make moves when the right opportunities present themselves.”