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Gilead is accused of cutting anti-competitive deals to extend profit on HIV drug combinations

(Stephen Lam/Reuters)

Combination drug “cocktails” to treat HIV infection are an important part of patients’ routine, allowing them to reduce the number of pills they must take each day. But the lifesaving tablets also were the focus of anti-competitive schemes by the nation’s leading HIV drug manufacturer, Gilead Sciences, according to a consumer lawsuit filed Tuesday.

Gilead forged deals that blocked generic competition, even after Gilead’s brand patents on key medications in the combination pills expired, according to the civil antitrust lawsuit brought in U.S. District Court in San Francisco by HIV/AIDS activists and two service unions.

Combination pills are created using medicines from multiple manufacturers. Gilead’s agreements with those partner companies required that Gilead-brand versions of the HIV-fighting medication tenofovir, which prevents the virus from replicating, would remain in the pills, the lawsuit alleged, even when generic ingredients could be used at a fraction of the price.

In other words, Gilead got its most likely competitors to promise not to compete, according to the suit.

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“This looks like a new type of agreement that we haven’t seen before, that sure looks like a per-se illegal effort to extend the life of the patent,’’ said Mark A. Lemley, a Stanford Law School professor and a lead attorney in the litigation. “And they’re doing so in a market where there really is a public health crisis.’’

As a result of the deals, according to the lawsuit, individual consumers and health plans paid far too much for the drug combinations. Prices for brand-name combination HIV treatments start at $30,000 a year.

Among the partners named along with Gilead as defendants were Bristol-Myers Squibb and Janssen, a division of Johnson & Johnson. Gilead said it was still digesting the 135-page lawsuit Tuesday and could not comment in detail.

“We have entered into partnerships with other companies with the goal of bringing lifesaving therapies to patients in need,” Gilead spokeswoman Sonia Choi said. “Any assertion that we worked to delay availability of lifesaving medication to patients is absolutely false.”

Activists contend that artificially inflated prices have hampered broader use of crucial HIV medicine. “This gross profiteering explains why less than half of people living with HIV in the U.S. are virally suppressed, one of the lowest rates among the world’s high-income countries ,” said one of the plaintiffs, activist Brenda Goodrow, 23, who was born with HIV.

The lawyers behind the lawsuit dug into Gilead’s filings with the Securities and Exchange Commission and found the agreements that formed the core of the case.

Patent-law specialists said the allegations in the lawsuit appeared to have merit and will further raise hackles on Capitol Hill.

Gilead chief executive Daniel O’Day is scheduled to be questioned by members of the House Oversight Committee on Thursday about Gilead’s contention that a government patent is invalid for use of the drug Truvada for HIV prevention.

Gilead agreements with other companies to block generics take the concept of “pay for delay” to a new level, said Michael A. Carrier, a patent expert and professor at Rutgers Law School.

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Typically in “pay for delay” schemes, brand drug companies pay generic companies to keep a copycat drug off the market after an infringement lawsuit invalidates the brand patent. Extending those sorts of agreements beyond the life of the patent, as Gilead is accused of doing for tenofovir, is a new twist, Carrier said.

“You have collusive behavior, and you have generic entry being held off even after the patent expires, and that is very concerning,” Carrier said.

The lawsuit also accuses Gilead of a practice known as “product-hopping.” Gilead introduced an improved version of tenofovir with fewer side effects in another combination tablet and began shifting patients onto that new product — with patent life that extended further, according to the suit.

Gilead could have reduced the active ingredient in the older pill to reduce negative side effects but chose not to, according to the lawsuit. Carrier said that is an especially troubling aspect of the allegations.

“The result of that is that consumers suffered adverse side effects . . . and that was not good for patients,” Carrier said. “That is really concerning conduct.”