[Ip-health] Wall Street Journal: Gilead Deal to Sell Sovaldi in Poor Countries Meets Criticism

Shailly Gupta shailly.gupta at geneva.msf.org
Mon Sep 15 23:19:15 PDT 2014




In a bid to forestall criticism over the price of its expensive Sovaldi
hepatitis C treatment,
<http://online.wsj.com/public/quotes/main.html?type=djn&symbol=GILD> Gilead
Sciences  has reached
licensing deals with seven large generic drug makers based in India to sell
lower-cost versions in 91 developing countries.

The goal is to provide greater access to the estimated 185 million people
who live in low and middle-income countries, and avoid the reputational
damage the pharmaceutical industry sustained more than a decade ago in South
Africa over litigation surrounding access to costly AIDS medications.

The deal calls for the generic drug makers - including Cipla,
Ranbaxy Laboratories and the Indian unit of
<http://online.wsj.com/public/quotes/main.html?type=djn&symbol=MYL> Mylan
Laboratories - to pay royalties to Gilead for the right to make both Sovaldi
and ledipasvir, which the biotech hopes to sell very soon along with Sovaldi
as a fixed-dose combination in the U.S.

Sovaldi costs $84,000 for a 12-week course of treatment and clinical studies
indicated it has a 90% cure rate. Gilead has argued the price is a bargain
compared with older treatments that are less effective, although state
Medicaid programs and private insurers worry the drug will become a budget

Such concerns have spread to other countries where patient incomes are much
lower than in the U.S., but by striking the deal with the generic drug
makers, Gilead hopes to avoid criticism that the price of a copycat version
does not fairly reflect the actual manufacturing cost of its drug.

The 91 countries covered by the deal - including Egypt, Vietnam, India and
many countries in Africa - have a per capita income of nearly $1,900 and
account for about 54 percent of those with hepatitis C, according to
Knowledge Ecology International, a non-profit that tracks drug access and

Nonetheless, more than three dozen patient advocacy groups say the licensing
deals do not go far enough, because the deals excludes
ICs.pdf> many middle-income countries - such as Brazil, China, Turkey,
Thailand and Ukraine - where governments and individuals may not be able to
afford the Gilead drug.

The patient groups are concerned the licenses will preclude the generic drug
makers from selling lower-cost versions to those countries and potentially
excluding millions of patients with hepatitis C from gaining access to
treatment. For this reason, Doctors Without Borders says the deal "falls

Some provisions of the deal are also generating concern. The generic drug
makers are allowed to make and supply countries that were excluded from the
91-nation deal - even if a patent does not exist in, or if a compulsory
license has been issued, by a country that was not named in the agreement.

But a Gilead spokesman confirms the licensing deal would be breached if a
generic drug maker attempted to sell a copycat version of Sovaldi in any of
the excluded countries - if a patent is still pending in India and that
excluded country. And Gilead patents on Sovaldi are being challenged in

Tamir Ahin of the Initiative for Medicines, Access & Knowledge says this is
designed to thwart generic competition in middle-income countries, since the
deal involves some of the largest generic suppliers in the world. "In one
fell swoop, Gilead has locked up the main competition" for generics. I-MAK
filed some of the  <http://www.i-mak.org/sofosbuvir/> patent challenges in

Rohit Malpani, director of policy and analysis at Doctors Without Borders,
maintains the wording of this particular provision - which emphasizes
pending patent filings and challenges - takes advantage of the uncertainty
in the Indian legal process.

"They've taken steps to make it difficult for Indian generic drug makers to
sell in those other countries until a patent is ultimately rejected in India
and in those [excluded] countries," says Malpani.

"They're exploiting uncertainty in the Indian legal process. As long as
Gilead can says there's a pending patent, a generics company can't sell
outside the [countries named in the] licensing agreement."

Nonetheless, Jamie Love of Knowledge Ecology International believes the deal
offers several benefits, such as working with what he termed seven "very
strong" generic drug makers, and he suggests that competition between these
companies will drive the price down for the Gilead drugs.

But he also chastised Gilead for failing to include more middle-income
countries in the agreement. "In each of these areas, there are a significant
number of persons living with HCV who will not receive treatment at Gilead's
prices," he says in a  <http://keionline.org/node/2082> statement.
"Addressing these access gaps will be important."


Shailly Gupta

Advocacy & Communication Officer

MSF Access Campaign

K-30, Jangpura Extension

New Delhi - 14






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