Pharmaceutical Giant Makes Billions from HIV Treatment Funded by Taxpayers

I have touched on this topic before, but it bears addressing again since Donald Trump, a/k/a Der Trumpenführer, has again declared war on the Affordable Health Care Act and seeks to throw the general public at the mercy of greedy insurance carriers and even greedier pharmaceutical companies.  The preferred Trump/GOP health care system is one that maximizes profits to insurance companies, for profit health care providers and greed driven pharmaceutical companies and says to hell with average Americans and taxpayers other than the very wealthy.  A piece in the Washington Post looks at the obscene profits - $3 billion last ear - being raked in by Gilead Sciences on a drug that was developed at taxpayer expense and patented by the federal government  Something is seriously wrong with this picture even before one considers the fact that the high prices charged by Gilead makes the drug unobtainable for many who need it.  While the drug that is the subject of the article is HIV related, the same ridiculous screwing over of American taxpayers/consumers applies to many other drugs as well.  Here are article highlights (Note: (i) Gilead has made $36.2 billion off a government funded drug; and (ii) the same drug which cost $3,000/month in the USA costs $200 in the United Kingdom):

Thomas Folks spent years in his U.S. Centers for Disease Control and Prevention lab developing a treatment to block deadly HIV in monkeys. Then San Francisco AIDS researcher Robert Grant, using $50 million in federal grants, proved the treatment worked in people who engaged in risky sex.

Their work — almost fully funded by U.S. taxpayers — created a new use for an older prescription drug called Truvada: preventing HIV infection. But the U.S. government, which patented the treatment in 2015, is not receiving a penny for that use of the drug from Gilead Sciences, ­Truvada’s maker, which earned $3 billion in Truvada sales last year.

Gilead argues that the government’s patents for Truvada for PrEP, as the prevention treatment is called, are invalid. And the government has failed to reach a deal for royalties or other concessions from the company — benefits that could be used to distribute the drug more widely.

The extraordinary standoff between the CDC and a drug company over patent rights raises a big question for the Trump administration: How aggressively should the government attempt to enforce its patents against an industry partner?

The Department of Health and Human Services, which includes the CDC and the National Institutes of Health, has patented more than 2,500 inventions created with taxpayer dollars since 1976, according to the U.S. Patent and Trademark Office.

It routinely licenses new pharmaceutical compounds to private companies that take those publicly financed discoveries into the marketplace.

Gilead, which enjoys a U.S. monopoly on Truvada, charges between $1,600 and $2,000 for a month’s supply of a pill that can be manufactured for a fraction of that amount [actually about $0.6 per pill]. The number of new HIV infections in the United States has barely budged, meanwhile, and is stuck around 40,000 a year, according to CDC estimates.

Activists want the government to take a more aggressive stance against Gilead. Their complaints are part of a broader wave of anger over drug companies reaping hefty financial rewards by capitalizing on taxpayer-funded research.

“The CDC has all these patents, and is allowing Gilead to rip off the American people at the expense of public health,’’ said James Krellenstein, an HIV/AIDS activist and co-founder of the PrEP4All Collaboration, who has spent months digging into the government patents. Instead of enforcing its patent, Krellenstein said, the CDC is “twiddling their thumbs.’’

NIH and CDC officials see their role as encouraging the commercialization of government-financed discoveries, not placing curbs on them, Sukhatme said. That tends to take patent infringement lawsuits off the table. . . . But that stance increasingly is challenged by political anger over high drug prices. Consumer advocates and members of Congress have stepped up demands that the government exercise its rights under existing law to license generic competition or imports during shortages or unwarranted price spikes; several billswould enhance such “compulsory licensing’’ provisions.

The case of Gilead and Truvada for PrEP adds a new twist to these debates, with demands that the government be more aggressive in exercising its own patent to ease the cost effects of a monopoly.

After Truvada was shown to work as a prophylactic in primates, the CDC applied for its patents. That began a nine-year effort, using two outside law firms retained by the CDC, which made their case to U.S. Patent and Trademark Office examiners.

In addition to $50 million in government money, $17 million for the study came from the Bill & Melinda Gates Foundation, Grant said.

Federal officials estimated in 2016 that less than 10 percent of the 1.1 million people who should be on PrEP treatment are receiving the drug. Gilead says that has now improved to about 20 percent. The problem is particularly acute in Southern states, where cultural barriers and lack of education programs are holding back its use.

The CDC waged a successful defense of its patent in Europe, adding strength to its case that its patents are legitimate, Morten said.

“I have no reason to believe that these patents are not valid and enforceable, and moreover, they seem to be infringed [by Gilead] by the use of Truvada for PrEP,’’ Morten said in an interview. “These are public assets that were generated with public money that effectively are going to waste here.’’

In response to complaints about its price, Gilead said it offers discount coupons that reduce the cost to less than $5 for a monthly supply for patients who lack insurance. It says it has spent $138 million since 2012 on community grant programs to raise awareness and educate at-risk people. Gilead has earned $36.2 billion on Truvada since 2004, according to its annual reports.

Obtaining Gilead’s coupons for Truvada for PrEP is a cumbersome process, they said. If the CDC leveraged its patents to get money for Truvada, it could help cash-strapped state Medicaid programs undertake aggressive education and distribution programs. Virginia Medicaid said it pays $54.04 per pill, or $1,621.20 for a monthly course of treatment.

“What we’re seeing is that because city and local governments are spending so much on getting PrEP,’’ said HIV/AIDS activist Christian Urrutia, “they don’t have a lot of money left over to do these kinds of programs.’’ 

For the record, I have what is deemed "excellent" healthcare coverage and when I inquired about PrEP given the current controversy, I was advised that I would have to incur $3,600.00 in out of pocket expense before the coverage would reduce the cost.  Obviously, thousands of individuals do not have $3,600 lying around - and that assumes they have "excellent coverage", something most do not have.