Gilead Delayed Introduction Of New Version of HIV Drug, With Fewer Side Effects, Maximizing Its Patent Monopoly And Profits
Techdirt has been writing about evergreening" for many years. It refers to the practice by pharmaceutical companies of making small changes to a drug, often about to come off patent, in order to gain a new patent that extends its manufacturer's monopoly control over it. The New York Times has a story about the Big Pharma company Gilead Sciences that involves evergreening, but with a twist.
It concerns the drug tenofovir, which is used for treating HIV. Its patent expired in 2017, and Gilead naturally worked on a replacement that would extend its patent monopoly beyond that date. But Gilead stopped work on the new version in 2004. At the time, the company's press release explained this was because it didn't have a profile that differentiates it to an extent that supports its continued development." That's a rather implausible excuse, since the technique of patent evergreening is based on the idea that even tiny changes to a drug justify granting a new patent. Drawing on a trove of internal documents made public in litigation against the company," The New York Times says there was another reason why work on the new version was halted:
The promising drug, then in the early stages of testing, was an updated version of tenofovir. Gilead executives knew it had the potential to be less toxic to patients' kidneys and bones than the earlier iteration, according to internal memos unearthed by lawyers who are suing Gilead on behalf of patients.
Despite those possible benefits, executives concluded that the new version risked competing with the company's existing, patent-protected formulation. If they delayed the new product's release until shortly before the existing patents expired, the company could substantially increase the period of time in which at least one of its H.I.V. treatments remained protected by patents.
Despite those 2004 concerns over its profile", Gilead did introduce the new version, but just a couple of years before the 2017 expiry of the patent on the original version. As The New York Times notes, that was nearly a decade after it could have been made available had work on the new version not been paused. Because of this delay, Gilead has patents on its HIV drug that will run until at least 2031.
The delayed release is now the subject of state and federal lawsuits in which around 26,000 patients, who took Gilead's older version of tenofovir, claim that the company exposed them to kidney and bone problems that could have been avoided. The company denies this:
In court filings, Gilead's lawyers said that the allegations were meritless. They denied that the company halted the drug's development to increase profits. They cited a 2004 internal memo that estimated Gilead could increase its revenue by $1 billion over six years if it released the new version in 2008.
But that makes no sense. Why would a canny Big Pharma company forgo an estimated $1 billion in revenue for apparently no reason? It certainly wasn't because the new version's profile" was unsuitable, as its subsequent successful launch proves. Its hard not to see this as a calculated move to maximize sales and profits based on the (correct) assumption that drug prices would continue to rise strongly, making an extended patent monopoly even more valuable than a truncated one.
The move has certainly paid off for Gilead, but not for people with HIV. If the new version had been patented back in 2004, it would be coming off patent soon, which would mean cheap generics would be available, widening access to the drug. Moreover, as the lawsuits note, people would have been spared the serious consequences of taking a drug for years that had toxic effects on their bodies.
This is not the first example of Gilead behaving badly with its HIV drug. Back in 2019 Techdirt wrote about how Gilead was charging $24,000 annually per patient for a treatment, based on tenofovir, that was developed with US taxpayer money, and even patented by the US government. The cost of producing the treatment? Just $60 annually per patient.
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