The Astronomical Cost of HIV Prevention Tools
Big Pharma’s predatory pricing
Despite considerable scientific contributions to new HIV prevention tools since US President George W Bush launched the PEPFAR campaign to stop the disease in 2003, failure to ensure access to prevention options resulted in between 1.3 million and 1.7 new HIV infections in 2023. The growing range of HIV prevention options has failed to translate into more choices for people.
It is reasonable to lay some of the blame at the door of big pharma, with no better model than Gilead Sciences, Inc, the glamorous American biopharma company headquartered near the heart of Silicon Valley in Foster City, California that focuses on research and development of antiviral drugs used in the treatment of HIV/AIDS, hepatitis B and C, influenza and Covid-19, including ledipasvir/sofosbuvir and sofosbuvir for treatment of HIV/AIDS. Founded in 1987 by Michael L. Riordan, Gilead has developed drugs like Tamiflu and Vistide, better known as remdesivir, which was developed with US$166 million in grants from the US government and which brought Gilead US$5.6 billion in revenues by 2022 despite being described as a “mediocre treatment for Covid-19” by critics who questioned whether Gilead deserves to pocket potential billions from the drug when the federal government had played a significant role in its development.
While Gilead is a leader in medical advances to corral the disease, which has taken the lives of an estimated 42.3 million people since it was first diagnosed, the biotech firm has come under continued scrutiny over its business practices, including allegedly gaming the US patent system to protect monopolies on best-selling drugs and by extremely high pricing of drugs such as Sovaldi and Truvada in the United States relative to production cost vis-à-vis cost in the developing world.
There is no better example of this than Gilead’s lenacapavir, an antiretroviral vaccine, called a “pre-exposure prophylaxis,” that in a study dramatically reduced the risk of infection by HIV to zero or almost zero by one injection every six months. The study demonstrated 100 percent protection for women and girls. Later, another study showed that lenacapavir reduced HIV infections by 96 percent compared to background HIV incidence among transgender men and women and gender non-binary people. There were two incident cases among 2,180 participants, corresponding to 99.9 percent of participants not acquiring HIV infection in the lenacapavir group.
But in July, Gilead generated global outrage when it cited lenacapavir’s cost at more than US$42,000 per person per year, meaning that at such an astronomical price, a prevention option that is almost 100 percent effective in protecting people from HIV would reach none of those who need it most because they are too poor. Mounting pressure worldwide forced Gilead to announce that six generic companies would be given voluntary licenses to make it at a much cheaper price to make it more affordable in 120 countries. Gilead has not released any price estimates for generic lenacapavir, but research presented in Munich earlier this year suggested that US$100 a year was attainable, with manufacturing costs potentially falling to $40 a year at volumes of over 20 million doses -- and still generate a 30 percent profit margin.
"We continue to be dedicated to the development of therapeutic advances for the treatment of HIV, with ongoing research programs focused on existing and novel targets, hepatitis C and diseases of the lymphatic system," said John C. Martin, Gilead’s president and CEO, when the company discontinued research into two AIDS treatments. “We also continue to carefully evaluate potential partnership opportunities to complement the internal research programs that will grow our pipeline.”
And, despite the agreement making lenacapavir available at affordable prices to 120 nations, others are being left out. Gilead is prioritizing registration in Botswana, Eswatini, Ethiopia, Kenya, Lesotho, Malawi, Mozambique, Namibia, Nigeria, Philippines, Rwanda, South Africa, Tanzania, Thailand, Uganda, Vietnam, Zambia and Zimbabwe. Those in Peru, Argentina, Brazil, and Mexico – countries whose people participated in its studies – are being left out. Gilead has also failed before to deliver on promises to make an important drug available to people suffering from life-threatening HIV-related infections, according to criticism from the Paris-based Médecins Sans Frontières.
Gilead isn’t alone. The price of cabotegravir, another vaccine developed jointly by GlaxoSmithKline and Shionogi, is more than US$20,000 a year in the US but its makers sell it for about US$180 a year in low- and middle-income countries, raising questions about the predatory pricing and profits of Big Pharma. For example Asia Sentinel also reported in 2012 that India’s Patent Office, tiring of the German pharmaceutical company Bayer’s monopoly in India on the drug sorafenib tosylate, used to treat kidney and liver cancer, took away its patent rights, with competition from the generic version bringing the price of the drug down dramatically, from more than US$5,500 per month to close to $175 per month – a price reduction of nearly 97 percent.
This is also not Gilead’s first trip through this. On April 18, 208, Asia Sentinel reported that a “drug to control Hepatitis C that the American pharmaceutical giant Gilead Sciences Ltd sells for US$1,000 a dose in the US can be had for US$14 a pill in India. And it is exactly the same drug, both manufactured by Gilead to the same specifications. Gilead made the deal to sell the pills at cheaper prices overseas while charging as much as US$80,000 for a 12-week regimen in the US, according to a Hyderabad-based drug reform concern.”
In India, that 12-week regimen cost US$1,200. This wide disparity underscores the overarching difference between the Indian approach to medicine and the US one where prices of medicines are one of the world's most exorbitant, as Asia Sentinel reported. “The bizarre fact in this case is that the US drug and the Indian one are exactly the same. They are both manufactured by Gilead, according to the Cure Hep C Project, based in Hyderabad.” Gilead ended up signing licensed agreements with 13 Indian drug manufacturers that allowed the production and distribution of new Hepatitis C drugs in 101 developing countries.
Gilead and other US drugmakers, until the arrival of the Biden administration, were protected by a 2003 law put into place by the George W. Bush administration that prohibited price negotiation. Until the Biden administration reversed the law, the country’s Medicare regime was required to accept pharmaceutical prices without negotiation, meaning the drugmakers could charge the system what they believed was appropriate. Those prices bled out of the Medicare system into private medicine as well – paid for by insurance companies, which jack up the cost of health care premiums.
Pharma companies argue that the cost of development of new drugs, the arduous regulatory approval process and the time to market justify the phenomenal cost of new drugs. But a study done for the National Institutes of Health found that from 2000 to 2018 that compared the profits of 35 large pharmaceutical companies with those of 357 large, nonpharmaceutical companies found the median net earnings expressed as a fraction of revenue were nearly double for pharmaceutical companies compared with nonpharmaceutical companies at 13.8 percent vs 7.7 percent.
“We need to deliver new HIV prevention tools with speed, scale, and equity,” Mitchell Warren, executive director of the New York-based AIDS Vaccine Advocacy Coalition (AVAC), told Citizen News Service. “It is so wonderful to see a product do so well in clinical studies, but we have to remember too that this is not the first time we have seen an amazing prevention product (lenacapavir),” he said.
Inequities not only exist between the Global North and Global South but also within the Global North nations, Warren said. “If you look at the United States which has had oral PrEP since 2012 (when it was first approved by US FDA, it is having an impact for typically white older gay men and other men who have sex with men often in the northern part of the US, whereas black and brown young men, particularly in the southern parts of the US, or women who may be at risk of HIV struggle with inequitable access to it for a whole number of reasons. It is a structural barrier too.”
Shobha Shukla, Citizen News Service, contributed to this article. Shukla is the founding Managing Editor and Executive Director of CNS