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World CAB Meets With Gilead

April-July 2006

In July 2006, members of the International Treatment Preparedness Coalition's (ITPC) World CAB met with Gilead Sciences, the makers of Viread (tenofovir) and Truvada (tenofovir/emtricitabine) to discuss the company's plans for making their drugs available at affordable prices to ARV treatment programs in the developing world.

Although the company put into place a special Access program in 2002 to make its drugs available in a group of 97 countries at a no-profit price, the price of tenofovir has remained 6-8 times higher than the price of generic stavudine. Furthermore, the lack of registration with drug regulatory authorities in most of these countries has limited the ability of treatment programs to order and prescribe tenofovir.

In mid-2006, Gilead announced that it would grant licenses to several Indian generic drug makers to manufacture Viread for the Access Program countries as well as for the domestic Indian market with the expectation that competition and increased volume of sales would reduce prices.

Gilead's pricing policies differ based on the category of country (determined by gross national income per capita and weighted by HIV prevalence):

  1. Access countries (97)

  2. Lower middle income (LMI) countries

  3. Upper middle income (UMI) countries

  4. High income countries

Current Access country prices are $17/month for Viread and $26.25/month for Truvada. The standard price for LMI countries is $30/month and $45/month. There is no set price for UMI countries and prices will be based on negotiations with governments. High income countries pay full price.

Truvada is dark blue in US and light blue in the Access Program. Atripla is salmon colored in US and white in the Access Program. Both are FDA approved.

* * *

India: I hear you say that Gilead wants the drugs accessible to as many people as possible in the world. We like the drugs but why didn't you offer voluntary licenses in 2002. Why did you file the patent application in India? Why so slow?

Gilead: We were initially advised that we would only need registrations in a dozen countries and we could use the import mechanism for the rest. It was not practical. In South Africa it is only available on a named patient basis, in others it is not allowed at all. Gilead finally decided we have to do these registrations.

We started by relying temporary import permits and realized this was not working a year ago. A year ago, we decided to register in all 97 of our Access Program countries. We hope to complete by the end of the year.

India: Why are you seeking a patent in India?

Gilead: We can't offer a license without a patent. But we filed in India because we don't think a patent will inhibit access if it is not abused. If there had been a patent earlier, there might be better access in India now. We don't think the presence in India of a patent will slow this. The generic companies we are licensing will have the right to sell in 101 countries. The drugs will be approved by FDA and WHO. We think the patent will help accelerate competition. The main reason we filed in India was to protect markets like Brazil. The patent in India is not to protect in India, but to prevent Indian generics from importing into countries like Brazil.

India: If the patent is not granted then you don't have the right to license.

Gilead: If the patents aren't granted then the licenses are void. There were protests in May but we were working on this plan before then. We have been talking to some of the generic companies for two years. We could have started the technology transfer sooner.

India: What is happening about access to the drugs in India?

Gilead: We are relying on those generic companies to make drugs for India. We are seeking registration there. In India no price will be set. Thailand is a LMI country. We will allow Indian companies to sell there. Allowing the distributors to make a profit should assure commercial access in places like Thailand. We will go to free pricing and allow the generics and the Access Program to compete on price. In Africa the generics must beat $17 to compete.

USA: Must the Indian companies also register in Africa?

Gilead: If the branded product is already registered, then the generics only need to show bioequivalence. Indian manufacturers will submit bioequivalence data. If we haven't received registration in a country then it will be a problem for the generics too.

India: Our experience is that the generic is priced higher in India than in other countries.

Gilead: We don't have the experience yet within India but in other countries patents can impede access. We have to pay a royalty on the FTC component of Truvada, but we are not asking the generics to pay that.

China: If the prices are allowed to float in countries like India or Thailand, could the price actually go up? If you feel the price is out of line will you come in and sell at $17?

Gilead: We will watch things and intervene if there is abuse. We are filing in India because it gives us the option of going in ourselves. But we can't tell the generics what to charge due to antitrust reasons. The only tool we have is to reserve the option to go in ourselves.

India: Most of the 97 Access countries don't have patents anyway.

Gilead: We can't resolve our differences about deciding to patent our drugs.

Cameroon: My concern is with price. Only 10% of patients need second-line therapy. But the price for first-line is $6. The price for second-line is too high for people to afford.

Gilead: We had anticipated higher volume and lower prices by now. I think prices will end up around $12 for Viread and $18-20 for Truvada. The cost per mg is lower for tenofovir compared to stavudine, but the low dose makes stavudine cheaper.

We want to have multiple generic partners to help drive cost down on the API (raw materials) side. Normally, companies don't invest in process improvements because there is no economic need with full prices. But the Access Program drove manufacturing cost improvements. We have improved manufacturing yields.

Ukraine: Are you going to register tenofovir in Eastern Europe and Ukraine? We are preparing a Global Fund application. Can we plan for tenofovir?

Gilead: We should file later this year after we finalize our agreements with Merck. The price will be the Access price for Ukraine. There are no Indian generics in Ukraine.

We have an agreement with (generic maker) Aspen Pharmaceuticals to represent us in sub-Saharan Africa. They will manufacture the drug supply for Gilead's Access Program. Aspen manufactures finished product according to US GMP (good manufacturing process) for all Access countries. They distribute products under their global trade names in Africa. They will pursue registration approval in Africa where it is not already registered. Aspen is free to buy API from anyone.

Portugal: Gilead acknowledged the delays in the past, where are the bottlenecks now?

Gilead: The initial registration filings are the easy part but following up and babysitting all the applications is much harder. In Thailand you have a two-year window to develop local safety data. In the past year, we filed an average of three applications a day. It is a huge logistical challenge. I'm not sure now smooth this will go.

This is an issue for all companies working in these regions. The other companies have been communicating between themselves. We would like to see registration harmonization between countries in Africa. Not one of these applications has required unique data. Only two countries of the 54 African countries have harmonization.

Portugal: What is the status of tenofovir getting on the WHO Essential Medicines List (EML)?

Gilead: Viread was turned down for inclusion on the EML in 2005 as a result of poor communications. It is not a transparent or standardized process.

They requested information that was confidential, which we deal with all the time. After we submitted the data, they said they were going to put it on the website. We said no, and WHO removed the data from the application.

We think the interval for considering the EML every two years is too long. In Zambia the government did not allow PEPFAR to use Viread because it was not on the list.

After recognizing how important the EML is, we are now prequalified and have good communication and will submit in the fall of 2006. The next approval date will be in April of 2007. We would like them to approve sooner.

The last time there was no proactivity at WHO, but this time we are in communication. You can't submit for prequalification unless WHO has asked for it in an expression of interest. You need to be on one list to get on another list.

India: The several Indian companies will be charged a royalty. How much? Are there any other restrictions?

Gilead: We are charging 5%, which is less than the law allows, especially if you provide technology transfer. It is enough to cover all of our activities for regulation and hiring people who will work for us in these countries. Cipla will have competition sooner than they expected. Others will get to market sooner. This is not the easiest drug to make. We will give them process descriptions so they can make it right away.

South Africa: There will be less competition in the middle income countries because you have a monopoly.

Gilead: We are unapologetic about getting a patent. Without patent protection there is no motivation to seek therapies for certain diseases. I do think many companies abuse their patents. But if we are responsible in our pricing then I think it is fair.

China: Are there any other restrictions on the generic producers?

Gilead: Five percent royalty. Must seek registration for GMP for PEPFAR or WHO prequalification -- if they fail, then we sit with them and we will help them, but if there are serious problems, we will suspend the license.

They can sell tablets in 97 countries plus Cuba and Thailand.

They can only sell API to licenses in India or to Aspen or Gilead.

Every one will have the same agreement.

There are no restrictions on prices and we will assist in registrations.

The license is for tenofovir. We don't have a patent for FTC in India. They can combine it with other agents if they want to.

Portugal: What is the Brazilian deal?

Gilead: There were good discussions with the Ministry of Health. The price is $114/month for Viread. The $114 price is good for three years. There is a statement about respecting our intellectual property rights. There are also purchase quantity requirements.

India: Does that mean they could not oppose a patent?

Gilead: That is an issue for the patent courts. But if they did oppose we would probably void their contract.

South Africa: All avenues are blocked for competition in Upper Middle Income countries.

Gilead: For example we have a patent in Mexico. We just voluntarily reduced our price in Mexico by 50%. We are going back to countries and dropping the price.

Morocco: If there is a compulsory license?

Gilead: We would not let a compulsory license happen. Brazil asked for a voluntary license but threatened a compulsory license in the press. Their terms for making the drug were the same as for buying the drug. A new Minister of Health came in and found that his manufacturers were deficient so he decided to purchase. Their biggest concern was continuity of supply. And they have had problems with that. They saw the potential of 100,000s of people adding tenofovir and wanted assurances of supply. We offered a safety stock but eventually they didn't need it. Some people wanted a compulsory license on principle.

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This article was provided by Gay Men's Health Crisis. It is a part of the publication GMHC Treatment Issues. Visit GMHC's website to find out more about their activities, publications and services.