“We believe that one of the greatest barriers to Truvada for PrEP access today is limited awareness of Truvada for PrEP’s role in HIV prevention…. The majority of people receiving Truvada for PrEP today who utilize our co-pay coupons pay less than $5 per bottle.” – Gilead Sciences
In July 2012, the U.S. Food and Drug Administration (FDA) first approved Truvada, an acquired immunodeficiency syndrome (AIDS) treatment manufactured by Gilead Sciences as a daily pre-exposure prophylactic (PrEP) treatment to reduce the risk of contracting human immunodeficiency virus (HIV) in sexually active individuals. Recently, this HIV PrEP treatment and its patent have been thrust into the spotlight thanks to a commercial for Truvada that Gilead ran during the January 27 broadcast of Rent: Live on the Fox television network.
Truvada is actually a combination of two pharmaceutical formulations contained within one pill: emtricitabine and tenofovir disoproxil fumarate. Both of these formulations are known as nucleoside reverse transcriptase inhibitors (NRTIs), medicines that block an enzyme known as reverse transcriptase, which enables HIV to multiply within the human body when a person is exposed to HIV. The Centers for Disease Control and Prevention (CDC) estimate that the once-daily treatment, which can be prescribed in four strengths from 250 milligrams (mg) to 500 mg, can reduce the risk of HIV infection by 92 percent when taken properly.
While many were encouraged by the fact that a national TV network was raising awareness about PrEP treatment, the commercial sparked a return to a debate over the high price of Truvada. As of June 2018, news reports indicated that once-daily Truvada treatment cost about $1,500 per month, or around $18,000 per year. Although the cost of Truvada is often covered by health insurance, the treatment hasn’t been adopted as widely as was expected when the drug was approved. Between January 2012 and March 2014, a review of half of U.S. pharmacies by Gilead showed that only 3,253 had begun a PrEP regimen during that time, far less than the estimated 500,000 people who would make good candidates for Truvada. That number has expanded rapidly to 77,120 U.S. PrEP users in 2016 and an estimated 136,000 users by the end of 2017’s first quarter, but that’s still far short of the estimated 1.2 million American adults at high risk of HIV infection who could benefit from PrEP.
In recent months, AIDS activist groups have called on Gilead and government agencies like the National Institutes of Health (NIH) to end patent protection for Truvada in order to get lower cost generic versions of the drug onto the market. #BreakThePatent is one such group that collects online signatures supporting march-in rights under the Bayh-Dole Act of 1980, arguing that one month’s supply of Truvada only costs Gilead $6 to create. The website also contends that Gilead didn’t invent PrEP and that the federal government and U.S. taxpayers fronted 100% of the costs to develop Truvada. In late February, New York City Council Speaker Corey Johnson publicly endorsed the #BreakThePatent campaign, becoming one of the most prominent U.S. politicians to support march-in rights to create access to generic Truvada. ACT UP New York, an AIDS awareness group founded at the height of the epidemic during the 1980s, has also come out publicly against Gilead’s pricing of Truvada.
According to FDA Orange Book data on Truvada, Gilead’s market exclusivity on the drug is protected by two patents:
- S. Patent No. 6642245, titled Antiviral Activity and Resolution of 2-Hydroxymethyl-5-(5-Fluorocytosin-1-yl)-1,3-Oxathiolane. Orange Book exclusivity under this patent ends in November 2020 (May 2021 for pediatric exclusivity).
- S. Patent No. 6703396, titled Method of Resolution and Antiviral Activity of 1,3-Oxathiolane Nucleoside Enantiomers. Orange Book exclusivity under this patent ends in March 2021 (September 2021 for pediatric exclusivity)
Certainly, asking people to pay $1,500 or more (#BreakThePatent reports that the price of Truvada is now $1,600 monthly) for a treatment that can prevent the spread of one of the worst diseases known to this world seems a little unfeeling. The promise of generic Truvada has increased overseas in the United Kingdom, where a court recently ruled against an extension of Gilead’s UK patent on Truvada. In August 2018, the FDA approved the first generic drug version of Truvada after an abbreviated new drug application (ANDA) was filed by Amneal Pharmaceuticals.
In all of this, it’s important to note that there are many considerations that have nothing to do with whether or not that medication is patent-protected that come into play when a pharmaceutical firm prices a medication. The potential size of a drug’s market and competition from other branded drugs treating the same disease are other factors that can inform pricing decisions, according to Patrick Gallagher, Partner at Duane Morris LLP and Chair of the firm’s Pharmaceuticals and Biopharmaceuticals Litigation and Regulatory group. Gallagher has represented both R&D firms and generic manufacturers in the pharmaceutical market. “If you have two products that are both branded that, for example, treat high blood pressure, they’re going to compete against each other in addition to any generic competition,” he said. Layered on top of those considerations are a myriad of complex interactions with the U.S. healthcare system, including insurers and the Medicare and Medicaid programs.
According to Gallagher, price erosion starts to heavily affect branded pharmaceuticals once there are two or three generics available on the market, which can cause prices to drop by 90 to 95 percent in some cases as the drug essentially falls to commodity prices. But the introduction of a generic doesn’t necessarily mean that a manufacturer will cut its prices for the branded drug. “Sometimes a brand company will actually raise prices in response to a generic if they believe that there’s some degree of loyalists that are insensitive to price and want to stick with the brand,” he said. However, for small molecule products, as soon as a generic product comes onto the market, automatic substitution laws essentially require pharmacists to substitute generic equivalents for the branded drug where those generics are available.
“One of the main benefits of generic drugs is access to lower-cost life-saving and health-serving medications,” Gallagher said. On the other hand, patent protection is vital to the firms who are actually pursuing the R&D necessary to cure new diseases. “The incentive to companies large and small that continue to invest or attract venture capital and angel investment comes in large part from the ability to have appropriate patent protection,” he said. “Otherwise, as soon as the product comes out on the market, it could be reverse-engineered by companies looking to compete.” This would have a drastic effect on innovation, he said. “You wouldn’t continue to have such robust R&D programs bringing about new therapies to cure cancer or new antibiotics. The balance between access and innovation is easy to talk about, but in practice it becomes really difficult to get perfect.”
But patents aren’t the only reason why generic equivalents to certain branded pharmaceuticals don’t exist. “Another major factor that impacts a lack of competition for drug products, which then leads to higher prices, is the cost of regulatory approval as a barrier to entry for any competing therapy, including generics,” Gallagher said. In recent statements, Food and Drug Administration (FDA) Commissioner Scott Gottlieb has acknowledged that regulatory hurdles, including the FDA’s own review process for generics, can delay their market entry. The FDA has even published a list of dozens of drugs that are off-patent, off-exclusivity but don’t have a generic equivalent on the market. A statement from FDA Commissioner Scott Gottlieb released on February 15 acknowledged that there are several hundred branded drugs with no patent protections or exclusivities and yet there’s no competitive generic available.
The Pharmaceutical Industry Responds
While the list price of Truvada is what has been generating a lot of the discussion around ending patent protection for the drug, it’s also important to note that very few people, if anyone, actually end up paying that price out of pocket. According to sources at the Biotechnology Innovation Organization (BIO), many medications, including Truvada, are widely covered by insurance and not even insurers typically end up paying the list price. The list price is typically just the start of a negotiation phase that involves insurers, pharmacy benefits managers and other players. Then there are initiatives like the 340B Drug Pricing Program that require manufacturers to provide drugs to certain populations and organizations at a significantly reduced cost. Indeed, that $1,500 list price for Truvada shouldn’t be viewed like a retail tag at a department store indicating a product’s shelf price. Rather, it’s more akin to a car manufacturer’s suggested retail price, which usually ends up getting negotiated lower at the dealership.
BIO also noted that many drug manufacturers offer rebates or other programs that reduce the price paid for a pharmaceutical, so that even the first buyer in the supply chain ends up paying much less than the list price. Some drug manufacturers offer rebates of 40% or more to buyers so that a drug listed at a price that sometimes approaches six figures often enters the supply chain at a much lower price. By the time that drug reaches a pharmacy, what a consumer ends up paying is a fraction of that.
Tom Wilbur, a spokesman for the Pharmaceutical Research and Manufacturers of America (PhRMA), provided the following statement on the importance of patents to the pharmaceutical industry:
“The lifeblood of the biopharmaceutical industry lies in inventions—each medical innovation that leads to new or improved treatments and cures. It typically takes 10 to 15 years to develop a new medicine from the earliest stages of discovery through FDA approval and costs an average of $2.6 billion. The biopharmaceutical industry spends more on research and development than any other industry in the U.S. economy—investing an estimated $90 billion in 2016 alone.
A strong U.S. patent system is vital in this process. It provides companies with certainty and time to engage in the lengthy and costly research process needed to develop safe and effective medicines. It also promotes competition and gives companies certainty that their invention is protected, while at the same time, the specifics of the invention are published so others can learn from it and use it as the foundation for future invention and discovery.
Without strong patent protections, researchers may not have the ability to explore new areas of medical innovations, which ultimately hurts patients.”
Is Truvada a Good Candidate for March-In Rights?
Calls upon the federal government to use their march-in rights under U.S. patent law in response to drug pricing concerns are nothing new. In recent years, the state of Louisiana proposed a similar solution to obtain generic competition for Gilead’s hepatitis C treatment, Sovaldi, which in 2016 had cost the state’s Medicaid program an average of $85,000 per year for each patient prescribed the drug. However, this January, Louisiana state officials announced that they had agreed to a subscription-based payment model to obtain unlimited access to Gilead’s hepatitis C treatment for the state’s Medicaid and prison populations.
There’s also some question about whether the situation with Truvada as a PrEP treatment makes a strong case for the exercise of march-in rights because of the drug’s history. Gilead’s combination of emtricitabine and tenofovir disoproxil fumarate had previously been approved as a treatment for AIDS and had been prescribed as such for many years prior to FDA approval of the drug as a pre-exposure prophylactic. The testing that determined Truvada as being effective as a preventative measure against HIV infection was funded by the federal government, but Gilead’s development of the drug itself was for the purposes of treating AIDS. So, while #BreakThePatent’s website argues that taxpayers fronted almost all of the costs of the research that went into Truvada’s PrEP designation, and while some point out that Gilead’s role in that research was simply donating the medication, it’s not as if Gilead was actively working to corner the PrEP market. The PrEP version of Truvada is also a voluntary treatment and, while it is widely covered by insurance, in reality this debate might have more to do with difficult decisions about insurance coverage rather than anything to do with patents.
Although the federally-funded research behind Truvada as a PrEP treatment doesn’t of itself give NIH the opportunity to exercise march-in rights on Truvada, the two Orange Book patents covering Truvada do acknowledge that federal funding went into the development of the invention and that the U.S. government has certain rights. However, march-in rights under Bayh-Dole require that the invention funded by the government isn’t available on “reasonable terms” before those march-in rights can be exercised. It’s important to note that a drug’s high price, while it may sway the court of public opinion, usually doesn’t qualify as an unreasonable term. In recent years, the NIH has refused to exercise march-in rights on high cost drugs when data showed that annual sales of the drug have increased, such as is the case with Truvada. March-in rights were written into the language of Bayh-Dole to prevent against situations where a federally-funded invention wasn’t being commercialized, and Truvada is absolutely being commercialized.
Pharmaceutical Patent Challenger I-MAK Weighs In
While it’s not part of the crowd calling for the government to utilize march-in rights on Gilead’s Orange Book patents covering Truvada, the Initiative for Medicines, Access, and Knowledge (I-MAK) has been an important player internationally in opposing patents for the purposes of promoting public access to generic medicines. The group challenges what it believes are unmerited patents that act as a barrier on access and, while it has focused more on developing economies, it has made forays into U.S. patent issues and grabbed some attention from U.S. policymakers and the media with its 2018 study Overpatented, Overpriced: How Excessive Pharmaceutical Patenting is Extending Monopolies and Driving up Drug Prices. The organization has had success in opposing Gilead patents covering the hepatitis C treatment Sovaldi in China, Ukraine and Argentina. I-MAK has also been successful in advancing generic forms of Truvada in India and Brazil.
“We’ve never said that there should never be pharmaceutical patents, we want to be loud and clear about that,” said Tahir Amin, Co-Founder and Co-Executive Director of I-MAK. “Our view is that the patent system has lowered the bar too much. Patents should be granted for genuinely true inventions and not for innovations where there may be utility but they’re not inventive.” Amin, who has 25 years’ experience as an IP attorney, argued that part of the problem was that the term innovation has been “muddied” into the idea of patents since the 1950s and that “innovation” is a different construct than “invention.” “The mindset of, ‘How dare we shift from the patent system,’ I think that’s fear-mongering and we need to get past that fear to get a better, more sensible conversation,” he said.
Among the patent-protected innovations Amin felt weren’t truly inventive were extended release, pill combinations and crystalline forms. “It’s not as if anyone’s never combined two pills into one before and that’s a common part of the evergreening toolkit used by companies to extend their franchise on a product,” he said. In particular, Amin found it “shocking” that crystalline compounds could be patented in the U.S. given that the FDA mandates that pharmaceutical companies screen for polymorphic forms, which includes crystalline forms. “I believe that allowing patents on those forms is encouraging companies to scrape the bottom of the barrel to get more exclusivity,” Amin said. He added that he was in favor of granting two to three years of exclusivity to innovations that are utilitarian but don’t represent major leaps in science rather than the maximum 20-year exclusivity period allowable under the law as it stands now.
Despite Amin and I-MAK’s stance, he also noted that there were issues specific to Truvada that may not be properly taken into account by those advocating the use of march-in rights to promote generic access. While he acknowledged that he wasn’t an expert on march-in rights, Amin’s understanding was that those rights could be used on the patents listed in the FDA’s Orange Book, which cover the pharmaceutical formulations and were developed in part through government funding, but that Gilead still holds other patents on antiviral combinations that would still block generic access. These patents include U.S. Patent No. 8716264, U.S. Patent No. 9457036 and U.S. Patent No. 9744181, each titled Compositions and Methods for Combination Antiviral Therapy. Unlike the FDA’s Orange Book patents on Truvada, the inventions covered by these patents weren’t funded by the federal government and thus march-in rights under Bayh-Dole cannot be exercised. Amin argued that these patents shouldn’t have been granted and noted that the equivalent patents in Europe had been successfully invalidated there, but he did note that the existence of these patents would likely prevent generic Truvada access in the U.S., regardless of the exercise of march-in rights.
Gilead Sciences: Focus on Awareness, Not Patents
After contacting Gilead Sciences for this story, Ryan McKeel, Senior Director, Public Affairs at Gilead, provided the following statement to IPWatchdog, which we have included here in its entirety:
“Gilead started working on HIV treatments in the late 1980s, when HIV/AIDS was seen as a death sentence that disproportionately impacted marginalized communities. Today, our medicines are helping prevent new infections and are helping people diagnosed with HIV enjoy healthier lives. In addition to working to develop new therapies for both treatment and prevention, we work to raise awareness of how HIV intersects with social determinants of health and understand that to have an impact on the epidemic, we need to address more than just the disease.
Based on feedback from partners and our work in the field, we believe that one of the greatest barriers to Truvada for PrEP access today is limited awareness of Truvada for PrEP’s role in HIV prevention, which is why we commit significant investments to educating both consumers and healthcare providers. In addition, lack of access to healthcare services as well as lack of experience with healthcare systems are critical issues. These serious challenges often fall most heavily on those at highest risk of infection, including young gay and bisexual men of color. We are in regular dialogue with public health officials, advocates and physicians to better understand and, where possible, help to address these challenges.
To help address these challenges, Gilead supports a broad range of programs such as the COMPASS Initiative (a $100 million commitment over 10 years to support organizations working to address the HIV/AIDS epidemic in the Southern United States) and PrEP community grants (more than $28 million in grants to more than 120 organizations working to raise awareness about HIV prevention since 2012), as well as our medication assistance and co-pay coupon programs.
Gilead is committed to ensuring that people who are at risk of HIV infection have access to Truvada for PrEP. We support comprehensive payer coverage and maintain support programs for qualified uninsured and underinsured people in the United States who cannot afford their medications. Gilead’s extensive efforts to provide access to Truvada for PrEP (and even before as HIV treatment) clearly satisfy the Bayh-Dole requirement of reasonable efforts to make an invention (emtricitabine) available for health and safety needs. We believe that there is no rationale or precedent for the government to exercise march-in or other IP rights related to Truvada.
Of note, before Truvada was indicated for PrEP, it was a groundbreaking medication for treatment of HIV. That was the context that led to its development and ultimate approval by the FDA in 2004. Subsequent to the approval of Truvada for treatment, we partnered with NIH and the Bill & Melinda Gates Foundation for additional clinical trials that established it could also be used for HIV prevention. The patents owned by Gilead for Truvada relate to the discovery of Truvada and its initial use in treating active HIV infections. Those patents were not extended with the subsequent PrEP indication, they have not expired, and they have not been invalidated.
Data from our patient support programs do not suggest that cost is a primary obstacle to treatment. The majority of people receiving Truvada for PrEP today who utilize our co-pay coupons pay less than $5 per bottle, and our co-pay assistance program is sufficient to meet the needs of the large majority of people who use it. We encourage anyone facing financial difficulties to contact us at www.GileadAdvancingAccess.com.
Additionally, the CDC estimates that less than one percent of people who are indicated for Truvada for PrEP have an unmet need for financial assistance. When cost is a barrier, we work to reduce it. We recently increased our patient support programs by raising the annual co-pay assistance from $4,800 to $7,200 and doubling patient eligibility for the Medication Assistance Program from six months to 12 months, making it easier to enroll and remain in the program.
An estimated 202,000 people are now taking Truvada for its prevention indication in the United States. The current Wholesale Acquisition Cost (WAC) price of Truvada is $1,676 per 30-pill bottle. Of note, the WAC price does not reflect rebates that payers may receive or the out-of-pocket costs that insured patients pay.”
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