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Amid growing reports that the drug maker Gilead has fixed prices for their widely used HIV treatments and withheld safer alternatives, a popular lawmaker accused the company of placing profits above human lives at a recent hearing.
U.S. Representative Alexandria Ocasio-Cortez grilled Gildead CEO Daniel O’Day at a hearing before the House Committee on Oversight and Reform last week, asking why Truvada, which is used as both an HIV treatment drug and as a prophylactic against the spread of the disease, cost $2,000 in the United States, but only $8 in Australia.
Ocasio-Cortez told O’Day that “people are dying” in the U.S. due to the drug pricing. O’Day responded that the cost difference was due to patent protections in the U.S., which are not present in Australia, where a generic version of the drug has been available.
However, the hearing came just two days after a group of plaintiffs filed a class action lawsuit over the HIV drugs, alleging that Gilead and some other drug makers purposefully price-fixed Truvada and similar tenofovir disoproxil fumarate (TDF) medications in the United States.
According to the lawsuit, Gilead, Johnson & Johnson, Bristol-Myers Squibb and other drug makers conspired to restrain competition, unlawfully extend patent protection in the U.S. and charge exorbitant prices for the drugs.
O’Day defended the company’s approach in his testimony (PDF), saying Truvada’s price increases in recent years reflected the drug industry as a whole.
“Since launching Truvada, Gilead has increased the WAC price of Truvada by an average of 7% annually, with year-on-year increases typically ranging between 6% and 10%. These annual increases are consistent with single-digit year-over-year price increases in the pharmaceutical industry as a whole,” his testimony states. “Moreover, since its initial launch, Truvada’s clinical value has been reaffirmed time and again as the drug has proven effective as a backbone treatment therapy across a broad range of patient populations.”
Committee Chair Elijah Cummings acknowledged the good Gilead’s HIV drugs have achieved, but expressed concerns about the drugs’ availability to those who need them. He noted that Ocasio-Cortez had been “leading the charge” on tackling the issue and bringing it to Congress’s attention. He called the prices “astronomical,” noting that when the drug was first approved in 2004, it cost about $800 per month. Since then, the price has risen to $2,000 per month, or about $70 per pill.
“In that same time period, Gilead has made massive windfalls on this treatment – more than $36 billion in revenues. Let me say that again — $36 billion on this drug alone,” Chairman Cummings said in his opening statement (PDF). “How can Gilead do this? How can our system allow a company to take a drug treatment that was developed with taxpayer funds and abuse its monopoly to charge such astronomical prices?”
Many critics say that the U.S. Centers for Disease Control and Prevention actually owns the patent on the drugs, particularly when used for prevention of HIV, known as PrEP. O’Day denied this in his testimony.
Just before the hearing, administration officials announced Gilead was donating 2.4 million Truvada pills, which would serve about 200,000 at-risk individuals without health insurance. However, there are an estimated 1.1 million such individuals in the U.S., and U.S. customers, or their insurance companies, pay 250 times as much for Truvada as someone in Australia pays for the exact same medication.
In addition, Gilead now faces a growing number of individual HIV drug lawsuits. The lawsuits claim Gilead knew enofovir alafenamide (‘TAF’) HIV drugs were less toxic than TDF drugs like Truvada because it could be administered at a lower dose with the same effectiveness. The company shelved TAF in 2004, and did not begin to sell TAF-designed drugs until 2015, plaintiffs point out, which gives them patent protection until 2032. TDF drug patents began expiring last year.