Hedge Fund Billionaires Are New Target for Hepatitis C Cure Protests
The New York City home and offices of former hedge fund manager Julian H. Robertson were targeted by protest groups in a series of simultaneous direct actions in early May. Robertson is ranked No. 512 on Forbes' list of "the world's billionaires" with a reported net worth of $3.4 billion. "Robertson is making a killing off of people with Hep C," read one sign.
The protests targeted high profile hedge fund investors who have reaped substantial profits from the California-based pharmaceutical giant Gilead Sciences. Hedge Clippers, a coalition of labor, community and social justice groups including VOCAL-NY, seeks to draw links between hedge funds and income inequality, mass imprisonment, climate change, health disparities, and other challenges. Gilead has been targeted because of what has been called "exorbitant" pricing for its groundbreaking new class of drugs that can cure hepatitis C virus (HCV), such as Sovaldi, and the enormous profits they have generated.
Clippers here at SAC Capital offices delivering our message. We will not sit idly by while Cohen profits from sick pic.twitter.com/UDXdTUh2sw— Hedge Clippers (@GoHedgeClippers) May 5, 2015
HCV infection "is the most common chronic blood borne infection in the United States [and] approximately 3.2 million persons are chronically infected," according to the U.S. Centers for Disease Control and Prevention (CDC). About 150 million people around the globe are living with HCV -- disproportionately the poor, uninsured and incarcerated -- which in its advanced stages can cause cirrhosis or liver cancer.
Coinfection with HCV is a significant challenge among people living with HIV in the United States. About 25 percent of the estimated 1.2 million people living with HIV in the U.S. are coinfected.
A surge in heroin and injectable opioid drug use across the country -- particularly in rural areas -- has fueled an increase in HCV cases. More Americans now die from HCV complications than HIV, according to a 2012 report from the CDC.
Until recently, the standard treatment for HCV infections usually lasted almost one year. The regimen included weekly injections of interferon -- a synthetic version of a protein that "stimulates the immune system to neutralize or destroy" the virus -- and were often accompanied by flu-like side effects. Many people could not tolerate the side effects and were forced to interrupt treatment, which allowed the infection to progress.
The new class of antiviral medications has revolutionized treatment. Sovaldi (sofosbuvir) has demonstrated a higher cure rate, fewer side effects and a drastically reduced duration for therapy. The price for the 12-week course is about $84,000 or about $1,000 per pill. Gilead's manufacturing cost is reportedly less than $200 per pill. Gilead's newer combination pill, Harvoni, approved in October 2014, adds a second drug, ledipasvir, that improves effectiveness for treating HCV genotype 1 -- the most common strain of HCV in the United States, Japan and Europe. It costs $94,500 for the eight-week course. The Fair Pricing Coalition, a consortium of HIV and viral hepatitis activists, has proposed a uniform "price per cure" for all HCV patients based on an eight-week cost of $63,000.
Sovaldi's pricing has become a bonanza for Gilead and its investors. Gilead sold $10.3 billion of Sovaldi in 2014, "a figure that brought it close to being the best-selling drug in the world in only its first year on the market," reported The New York Times. Sovaldi represented almost half of the pharmaceutical's total sales last year.
"It's fabulous," billionaire Robertson said on CNBC and applauded "the fact that the company would be 'inundated with cash from the profits on the hepatitis C drug,'" according to Hedge Clippers. Robertson and five other prominent hedge fund managers reportedly increased the value of their collective holdings in Gilead from $45 million to $844 million during 2014.
"The sudden huge increase in spending on Sovaldi has strained the budgets of health plans, state Medicaid programs and prison systems," The New York Times reported in February. The Southeastern Pennsylvania Transportation Authority (SEPTA) became among the first public agencies to file a class action lawsuit against Gilead for Sovaldi's alleged "price gouging." The Philadelphia public transit system's lawsuit filed in December 2014 claims it spent "at least $2.4 million on Sovaldi for employees and retirees" and that Gilead is "bleeding health and welfare plans around the country."
Gilead says Sovaldi could save money for insurers by preventing people living with HCV from getting sicker and needing more expensive medical care. But critics maintain the pricing of Sovaldi and Harvoni has done just the opposite. "Many resource-constrained programs, such as Medicaid, have only been covering Sovaldi-containing regimens for patients with advanced liver disease," said FPC co-chair Murray Penner, "despite the fact that people with early stages of disease can transmit the virus to others and may suffer health consequences if treatment is delayed."
The pricing controversy has spread beyond the United States. Just a few weeks after the Hedge Clippers took action, the New York City-based Initiative for Medicines, Access & Knowledge (I-MAK), which advocates for improved access to affordable medications, filed challenges against Gilead's patent on Sovaldi in Argentina, Brazil, China, Russia and Ukraine. A generic, $10 a pill version of Sovaldi called Incepta is now available in Bangladesh and could be marketed in Southeast Asia, Africa and other developing regions not covered by Gilead's patent. The $900 cost for three months is the same price that Gilead will charge for the drug in India. That's almost a 90 percent reduction in price.
Rod McCullom has written and produced for ABC News and NBC, Scientific American_,_ The Atlantic, Ebony, Poz and many others. He has been selected as a Knight Science Journalism Fellow at the Massachusetts Institute of Technology.