The chief executive of Gilead Sciences, the nation’s leading manufacturer of HIV drugs, defended the high cost of a key drug that prevents the lethal infection, telling a House committee Thursday that its hefty profits pay for continued research.
“We have taken the disease from a death sentence to a manageable clinical condition, but we’re not done yet,” Gilead CEO Daniel O’Day told committee members. “We have to be sure that Americans get our medicines at a price that allows us to invest in research.’’
He said Gilead has spent $6 billion on HIV/AIDS research since 2000.
Gilead’s HIV drug, Truvada, costs between $1,600 and $2,000 a month in the United States, compared with just a few dollars a month in some foreign countries, a disparity that has attracted widespread criticism of the San Francisco company and stoked claims of price-gouging.
Democrats on the committee zeroed in on tens of millions of dollars in government grants, as well as direct research conducted by government scientists at the Centers for Disease Control and Prevention, that proved Truvada could be used to prevent HIV.
They said that Gilead’s high prices are preventing broader use of Truvada. Only about 20 percent of the 1.1 million people who should be taking it for prevention are on the drug. That means preventable infections are occurring every day, lawmakers said.
“This treatment was developed as a result of investment made by the American taxpayers,” said House Oversight Committee Chairman Elijah E. Cummings (D-Md.). “The problem is that Gilead, the company that now sells the drug, charges astronomical prices.”
Gilead charged $800 a month for the drug when it was introduced in 2004. The drug now costs nearly $2,000 a month — or $70 per daily pill, Cummings said. “How can Gilead do this?” he asked. “How can our system allow a company to take a drug treatment that was developed with taxpayer funds and abuse its monopoly to charge such astronomical prices?”
The fight over Truvada’s price took on new urgency after The Washington Post reported in March that the government had opted not to file an infringement suit to enforce a 2015 patent on Truvada from the CDC. The ability of the drug to prevent HIV infection was discovered in federal primate labs in Atlanta, according to the government.
O’Day repeated Gilead’s claim that the government patent is invalid. In prepared testimony submitted to the committee, he cited a number of examples in which scientists had researched use of the drug for PrEP, as the prevention use is known, before the CDC filed its patent application in 2006.
“We have chosen not to challenge those [CDC] patents because we value our collaborative relationship with the agency,” he told the panel.
Since the Post report appeared, members of Congress have written letters to the Department of Health and Human Services demanding to know why the patent has not been enforced. The Justice Department has opened a review of the patent, which would be an initial step toward more aggressive enforcement.
HIV/AIDS activists who have been reviewing Gilead’s patents for Truvada unearthed the CDC patent last year. But the Oversight Committee did not invite any government officials to its hearing Thursday.
Cummings credited Rep. Alexandria Ocasio-Cortez (D-N.Y.) for pushing the issue and calling for a hearing to question Gilead executives. Cummings and Ocasio-Cortez wrote to HHS Secretary Alex Azar on Thursday asking for records that would show what the administration has done to enforce the government patent.
Rep. Jim Jordan (R-Ohio), the ranking Republican on the committee, accused the Democratic majority of “demonizing” Gilead and applauded the company for its innovative work. Republicans repeatedly accused Democrats of impugning Gilead’s profit motives. “Folks are alive today because of the work you’ve done, and we’re going to beat you up,” he told O’Day sarcastically.
That drew a heated response from Cummings, who described a young man he knew whose life was claimed by AIDS.
“Nobody is coming here to beat you up,” Cummings snapped. “But there is nothing like holding the hand of someone who is dying from AIDS.”
The hearing’s planners sat O’Day at the witness table immediately next to an HIV/AIDS activist, Aaron Lord, co-founder of the PrEP4All Collaboration.
“Mr. O’Day, we are suffocating under the weight of your company’s pricing,” Lord said, reading from his prepared remarks. “Mr. O’Day, you have given the American people a very bad deal for our money.”
O’Day, in his prepared testimony released Thursday morning by the committee, cited Gilead’s recent agreement with the HHS to distribute enough free Truvada to treat 200,000 people a year. That is the equivalent of 2.4 million bottles of pills.
Truvada has earned Gilead about $3 billion a year and $36 billion since the drug was approved in 2004, but it is about to lose its exclusive patent protection. The first generic will be available beginning in 2020, with more likely to follow in 2021.
Meanwhile, Gilead has a newer brand-name drug for treatment, Descovy, which has fewer side effects than Truvada and is expected to get Food and Drug Administration approval for HIV prevention. It has asked for a patent extension to 2025 for HIV prevention for Descovy, according to Gilead’s annual report. Patients in the free drug giveaway will get the new drug, O’Day said.