FOSTER CITY, Calif.—Gilead Pharmaceuticals, the maker of the primary HIV-preventive drug Truvada, has signed an agreement with the U.S. Department of Health and Human Services to donate roughly 200,000 doses of the drug per year to be distributed by the agency. The agreement will last at least until the end of 2025, and may be extended until the end of 2030.
Truvada is what is known as a "pre-exposure prophylactic" drug, or PrEP for short, and Gilead, which earns about $26 billion per year from its various HIV treatment and prevention drugs—$3 billion on Truvada alone—sells a month's supply (30 pills) of Truvada for between $1,600 and $2,000, depending on the recipient's insurance. In contrast, generic versions of the drug produced in India have been sold in Africa for $60 per year, and in fact, Gilead has developed a second-generation PrEP drug called Descovy, for which it is currently attempting to get approval, and if/when that happens, Gilead will substitute Descovy for Truvada under the government program. Though Descovy is expected to cost much less to produce than Truvada, and is more powerful, it will also sell on the open market for roughly $20,000 per year.
President Trump, most recently in this year's State of the Union speech, promised to end the spread of HIV in the U.S. by 2030, and the administration's agreement with Gilead would go a long way toward fulfilling that goal. However, according to a New York Times report, "Dr. Rochelle P. Walensky, who led a team at Massachusetts General Hospital who analyzed the costs of the Obama administration’s AIDS plan and has looked at the cost of the Trump plan, said the Gilead deal was 'a noble effort—but it covers less than 20 percent of the people who need it.'"
Indeed; though many insurance plans cover Truvada, the out-of-pocket costs even with insurance makes the drug prohibitively expensive for many Americans. Moreover, according to CDC research, as reported on TheBody.com, "a majority of black and Latino MSM [men who have sex with men] surveyed in 2014 were willing to take PrEP to prevent HIV. However, 17% of the men surveyed were willing to take PrEP but could not pay for it, 48% were willing to pay between $1 and $50 per month, and 27% were willing to pay more than $50 per month"—figures that come nowhere near what Gilead charges for the drug.
Moreover, according to The Times, the U.S. Department of Justice is investigating whether Gilead has stiffed the Atlanta-based Centers for Disease Control and Prevention royalties for its work in developing the precursors of Truvada, and possibly even infringed the CDC's patents on its work.
UPDATE: The New York Times thought this development was worth editorializing about, so here are a few excerpts:
"[A]s drug policy experts regularly note, such donations have a long history of doing more for drug makers than for patients... The company is likely to receive a generous tax break for its latest donation. Drug policy researchers have speculated that if the value of that donation is set by Truvada’s list price, rather than its manufacturing cost, Gilead could reduce its tax liability by about $1 billion. The donated drugs will cost the company less than $10 million to produce.
"A month’s supply of Truvada costs roughly $6 to make and sells for more than $1,600 in the United States, according to the PrEP4All Collaboration, an advocacy group... Owing partly to those prices, only about 18 percent of the million or so at-risk Americans who need the drug have access to it, according to the Kaiser Family Foundation. Gilead’s donation could double that percentage, but only if it’s reserved for patients who aren’t already receiving Truvada through the company’s existing financial aid programs. The deal, which Mr. Trump is said to have negotiated himself, contains no such guarantee... No matter how Gilead’s donation turns out, a majority of patients who would benefit from Truvada—and whose tax dollars helped pay for its development—still won’t be able to get the drug.
"As The Washington Post has reported, Truvada was developed largely with taxpayer dollars. The Centers for Disease Control and Prevention holds a patent on the medication, and the Justice Department is investigating whether the company owes the federal government back royalties on that patent, which experts say could amount to as much as $1 billion. (Gilead has roughly $3 billion in annual global sales of Truvada.)
"Officials at the Department of Health and Human Services have resisted calls to sue the company for those royalties, saying that such a lawsuit would be expensive and time-consuming and would ultimately not make much of a dent in the drug’s price. They’re probably right. But the prospect of such a lawsuit should have given the government considerable leverage in its negotiations with Gilead."
Pictured: A model of the HIV virus
