The House Oversight Committee just held a hearing to examine Gilead Sciences’ pricing on Truvada for PrEP — an HIV prevention drug that was funded almost entirely by the U.S. taxpayer and private charities, not the pharmaceutical industry. Not since the 1989 hearing over AZT has the House held a hearing on HIV drug pricing.
Truvada, the most effective method of HIV prevention, was FDA approved in 2012. Despite this and the revelation that effective HIV treatment makes the virus untransmittable, new HIV diagnoses in the United States have remained virtually the same. In addition, less than 10 percent of the people who need PrEP are on it, with people of color and trans women accessing the drug at significantly lower rates than their white male counterparts.
{mosads}Truvada costs approximately $6 per month to make, but Gilead Sciences charges up to $2,000 per month to consumers. Unlike HIV treatment drugs, HIV prevention drugs are not covered by the Ryan White Care Act, so there are significant barriers that prevent vulnerable communities from taking the drug.
Generally, pharmaceutical companies justify such massive markups by citing the money they poured into research and development for the drugs they manufacture. In the case of Truvada, however, the federal government and private charities spent over $55 million to develop the drug.
As a result of the federal government’s investment in Truvada’s research, the CDC owns numerous patents protecting Truvada. In a statement from March of this year, Christopher Morten, an attorney at Yale Law School’s Global Health Justice Partnership, said “ I have no reason to believe that the patents would be found invalid or unenforceable, if asserted in court.”
In further support of its enforceability, Gilead Sciences listed these patents as threats in its Q2 2017 SEC filings. Both the CDC and Gilead have claimed to be in negotiations regarding these patents and the Washington Post reported last month that the Justice Department was researching the CDC’s patents.
In addition, the Post reported that a lawsuit has been filed against Gilead accusing it of entering into anticompetitive deals with generic drug manufacturers to delay the entry of generic PrEP and other HIV treatment drugs. According to StatNews, the company has denied that the government any hand in developing the drug.
This has kept prices artificially high even after the exclusivity date on Gilead’s name-brand compounds has passed.
Gilead Sciences recently announced a donation of enough Truvada to cover 200,000 individuals for up to 11 years, less than one fifth of the population who would benefit from the drug. This donation would cost the company $10 million — less than 1 percent of its $3 billion annual revenue from Truvada.
In fact, the New York Times Editorial Board opined that this donation acts as a gigantic tax write-off, allowing the company to reduce its tax burden by up to a billion dollars.
None of this comes as a surprise — some pharmaceutical companies have acted in their own self-interest without regard for public health for decades. What is shocking is the CDC’s negligence in curbing the HIV epidemic despite having all the tools at its disposal to do so. The CDC has done nothing to enforce its patents domestically despite enforcing them internationally, thereby raising the price of generic PrEP in places like Australia.
Furthermore, even if the agency wanted to avoid going as far as enforcement, why hasn’t it used its intellectual property as leverage in negotiations with Gilead? The CDC has failed massively in its HIV response, seemingly betraying its mission to protect public health. Who deserves to answer for its failures? Should Secretary Alex Azar, Director Robert Redfield and Director Jono Mermin still have jobs? Almost certainly not.
The solution to the HIV epidemic is a national HIV prevention program. As we’ve learned through the Ryan White HIV/AIDS program, federally funded HIV programs that include free drugs, clinical care and culturally competent support services are the most effective methods we have.
For the same cost the American health-care system currently spends on Truvada alone, we could provide free generic drugs and clinical care to all 1.2 million Americans who need PrEP and still have half a billion dollars left over to pay for support services including transportation, counseling and housing.
Layer in the additional $1 billion in potential revenue from CDC patent royalties. and the benefits to public health would be staggering. Unlike Trump’s plan to end the HIV epidemic, this one would actually work.
The oversight committee hearing last week marks a turning point in the battle for the public health of communities at risk for HIV. By calling in Daniel O’Day, CEO and chairman of Gilead Sciences, the House of Representatives is holding the pharmaceutical industry accountable.
We need congressional oversight into the CDC’s negotiations with Gilead, a seat at the table and a guarantee that the federal government will use all powers at its disposal to implement a national HIV prevention program. Anything less guarantees that this epidemic will continue to ravage our communities for decades to come.
Christian Urrutia and Nicholas Faust are co-founders of The PrEP4All Collaboration, an activist group that created the #BreakThePatent campaign and advocates for a national HIV prevention program.