[Ip-health] New York Times: Maker of Hepatitis C Drug Strikes Deal on Generics for Poor Countries

Thiru Balasubramaniam thiru at keionline.org
Mon Sep 15 05:06:40 PDT 2014


<http://www.nytimes.com/pages/business/international/index.html>Maker of
Hepatitis C Drug Strikes Deal on Generics for Poor Countries

15, 2014

NEW DELHI — The maker of one of the costliest drugs in the world announced
on Monday that it had struck agreements with seven Indian generic drug
makers to sell lower-cost versions of its $1,000-a-pill Hepatitis C drug in
poorer countries.

The deals are intended to provide greater access to the medicine Sovaldi
for most of the nearly 180 million infected worldwide with Hepatitis C who
do not live in rich countries. Some 350,000 people die every year of
Hepatitis C infections, most of them in middle- and low-income nations.

Sovaldi, in only its initial year on the market, is on pace to exceed $10
billion in sales in 2014, becoming one of the world’s best-selling drugs.
Its high price has led to intense criticism even in the United States,
where officials say it could wreck Medicaid budgets and insurers say it
could cause increases in private insurance premiums.

But executives at Gilead Sciences, the California-based drug maker, say its
price is similar to those of other Hepatitis C treatments and is a bargain
compared to the costs of liver failure and liver cancer, which it may

In the United States, Sovaldi costs $1,000 a pill or $84,000 for a typical
12-week course of treatment. It is likely to be sold in India for less than
$1,800 for a 24-week course of treatment.

The seven Indian generic drug makers will pay royalties to Gilead to
manufacture the drug for 91 developing countries, where there are more than
100 million people infected with Hepatitis C, more than half of the world’s
infected population.

“These agreements are essential to advancing the goals of our humanitarian
program in these countries,” said Gregg H. Alton, a Gilead spokesman.

Hepatitis C infections are caused by a virus that is generally transmitted
through medical procedures or intravenous drug use. Infections can go
undetected and unnoticed for years but can eventually cause liver scarring
and failure.

With Monday’s announcement, Gilead executives have sought to ensure that
they do not fall into the trap of the expensive HIV/AIDS drugs that became
available over 15 years ago, whose high prices were seen as immoral in
Africa and other developing nations where millions were infected but were
consigned to die because they could not afford them.

Drug makers earn much of their profits in the United States, where prices
are uncontrolled and the federal government has forsworn direct
negotiations for lower prices in the Medicare program. Steep discounts in
poorer countries rarely cut a company’s earnings significantly.

By contracting with generic companies, Gilead avoids any criticism that its
price may not reflect the actual cost of making the drug.

Nonetheless, Gilead’s deals were instantly criticized by patient advocacy
groups as inadequate, because under terms of the deals the companies would
not be allowed to sell their drugs in some middle-income countries where
patients and governments would struggle to afford the drug.

“Gilead’s licensing terms fall far short of ensuring widespread affordable
access to these new drugs in middle-income countries, where over 70 percent
of people with Hepatitis C live today,” said Rohit Malpani of Doctors
Without Borders, the international emergency aid group.

The battle over the license reflects a continuing debate over whether the
global patent system is an effective way of both encouraging innovation and
ensuring wide access to new discoveries.

Even critics in the United States say patent laws sometimes discourage
research, particularly with the recent explosion of court cases involving
companies termed “patent trolls.”

In the developing world, officials are less concerned about encouraging
research than they are about guaranteeing access. So Indian patents are
generally more difficult to obtain than those in the United States, where a
patent application on a peanut-butter-and-jelly sandwich was approved in

Gilead has applied for an Indian patent on Sovaldi, although the
application has been opposed by the Indian Pharmaceutical Association and
others. The company already has patents on the drug in the United States
and many other countries.

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