As part of a strategy to switch patients to newer HIV treatments, Gilead Sciences late last week raised prices on a pair of older HIV medications that face patent expiration. This sort of maneuver is often found in the pharmaceutical playbook, but is triggering still more criticism by AIDS activists of its overall pricing strategies.
Here’s what Gilead did: the company raised the wholesale acquisition cost, or list price, for the two older medicines — Complera and Stribild — by 7 percent, to $2,508 and $3,469 a month, respectively. This follows price hikes of 7 percent and 5 percent last January, which Cowen analyst Phil Nadeau noted is a deviation from the typical annual price hikes that Gilead takes on its HIV drugs.
Meanwhile, Gilead left intact prices for two much newer versions of these drugs — Odefsey and Genvoya – which remain priced at $2,346 and $2,578 per month. Nadeau, who first reported the changes in an investor note, pointed out that Odefsey is now priced at a premium to Complera, while the difference between Stribild and Genvoya has widened. A Gilead spokeswoman confirmed the new prices.
By boosting prices for the older HIV treatments twice in just six months, Gilead is clearly hoping that doctors will prescribe its newer drugs. And physicians have an added impetus for doing so: the newest Gilead medications are more potent and studies have indicated they are likely to cause fewer side effects.
This is because the older treatments contain a compound called tenofovir, or TDF, which until recently had been a cornerstone of the combination HIV treatments sold by Gilead. But the patent on TDF expires in December 2017 and Gilead is replacing it with a modified version known as TAF. The patent on TAF doesn’t expire until May 2022, and the added years of exclusive marketing is very valuable.
However, even though TAF is more potent and is less likely to cause bone damage and kidney toxicity, AIDS activists argue Gilead knew of these differences, but deliberately delayed testing TAF in humans for several years in order to extend patent protection for as long as possible on the best-selling older drugs. The allegations, which Gilead has denied, surfaced in a lawsuit filed earlier this year.
The most recent round of price hikes has angered AIDS activists, who say the higher prices reflect indifference to the ability of payers to absorb higher drug costs. Gilead already has been skewered over the cost of its very effective hepatitis C medicines. A US Senate investigation last winter claimed the company put profits ahead of patients, since payers complained the prices overwhelmed their budgets.
“This sort of behavior from Gilead, alas, is not surprising,” said James Krellenstein, a member of ACT UP New York. “As we saw with their practices in the development of TAF and the pricing of (Sovaldi, the first hepatitis C medicine that Gilead began selling in early 2014), patient choice and safety takes a back seat when it comes to the company’s bottom line.”
Moreover, the older drugs are still considered highly effective and safe for many people living with HIV, according to Tim Horn, HIV project director of the Treatment Action Group and a member of the Fair Pricing Coalition, two other activist organizations.
“With both public and private payers seriously struggling under the weight of drug price increases that are seriously out of lockstep with rates of inflation in the US — burdens that are ultimately felt by every American — the move should be to lower drug prices to provide a competitive edge,” he said. “Gilead, instead, is choosing to position TAF products in the most artificial and unflattering light possible, by inflating the costs of their older competitors.”
And the AIDS Healthcare Foundation believes the price hike is a good reason to push to invalidate Gilead patents. The non-profit, which operates 46 health centers in the US for which it purchases many medicines, filed a lawsuit earlier this year seeking to have the TAF patents invalidated. “The small savings from the cheaper new drugs pales in comparison to how cheap they would be if they went generic,” said AHF president Michael Weinstein in a statement.
A Gilead spokeswoman wrote us that the price hikes will not affect a price freeze the company offered state AIDS Drug Assistance Programs in 2008 and extended through this year. She added that about half of all patients taking Gilead’s HIV drugs receive them through federal programs at deeply discounted prices, although she did not provide figures. And the company, she said, continues to invest in HIV R&D.
Investors, meanwhile, are likely to view the price hikes favorably. As Nadeau wrote, the higher prices “ensure (the) durability of the HIV franchise,” which he estimated will generate $12 billion in sales this year, and such moves reinforce the “sustainability” of revenues more than investors appreciate, given ongoing controversy over hepatitis C drug costs.
This story was updated to include a comment from the AIDS Healthcare Foundation.
They wont find cure its hige amount of money they are blackmailing world
The last paragraph sums up the greed and hypocrisy of Big Pharma and Wall Street. They are only interested in making huge amounts of money, at the expense of people’s plight. They have no interest in cures, only maintain long term customers.
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