Nov 8, 2019

Federal lawsuit against Gilead puts patent rights on trial

Truvada generated $3 billion of sales in 2018. Photo: Justin Sullivan/Getty Images

The Trump administration's decision to sue Gilead Sciences — the maker of HIV prevention pills known as pre-exposure prophylaxis, or PrEP — pours gasoline on the debate about how patents and prices should work when important drugs are developed by both public institutions and private companies.

Yes, but: "None of this will address drug pricing more generally or the unique circumstances of the HIV drug market," Jen Kates, an HIV policy expert at the Kaiser Family Foundation, said in a thread on Twitter. "And ultimately, the stakes are quite high given that PrEP can save lives."

Where it stands: The Department of Health and Human Services said in the lawsuit that Gilead has "exaggerated its role in developing" the HIV medicines and has willfully infringed patents owned by the federal government, leading to excess profits on the backs of taxpayers. The Washington Post detailed this backstory in March.

  • The government is asking for damages and royalties, which would be used to lower the prices and distribute the drugs to more people.
  • Gilead said in response the government's claims are false and any dispute should be handled through the official patent review board, not the courts.

By the numbers: The two drugs in question, Truvada and Descovy, are significant moneymakers for Gilead.

  • Both drugs have price tags around $1,800 per month, before any discounts. Truvada had $3 billion of sales last year, while Descovy had $1.6 billion of sales.
  • Generic versions of Truvada in other parts of the world cost as little $30 per person per year.
  • Gilead's U.S. patent for Truvada expires in 2021, and the U.S. patent for Descovy expires in 2022, although the company is attempting to extend that to 2025.

The bottom line: This lawsuit faces a long road in court, and pharmacies will soon stock generic versions of Truvada. But these HIV medications remain unaffordable for a lot of people, and the lawsuit is the most direct action the Trump administration has taken to address affordability concerns and monopoly drug pricing.

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