Gilead announced price of remdesivir at 400X what analysts say is necessary for them to profit from drug

REMINDER: Gilead sued by government last year for price gouging on HIV drug developed with taxpayer funds…charging up to $20,000/year

Generic being sold overseas at a fraction of the price Americans asked to pay….for drug their tax dollars helped develop

Washington, DC – Today, Patients Over Pharma released a new analysis highlighting how on the same day that Gilead Sciences announced its predatory pricing levels for their COVID-19 drug remdesivir, which was developed with taxpayer support, it paid out as much as $850 million in dividends to its shareholders. This adds to the over $2 billion in dividends and buybacks the company handed out in the first quarter of 2020.

“It’s not too surprising that Gilead is once again engaging in pandemic profiteering, but it’s particularly egregious for them to be padding their profits on a COVID-19 drug at patients’ and taxpayers’ expense while handing billions of dollars in profits to their shareholders,” said Eli Zupnick, spokesman for Patients Over Pharma. “Congress should take this as a wake-up call to finally ensure that drug companies can’t unilaterally set absurdly high prices on drugs like remdesivir that were developed with taxpayer funding.”

Gilead recently announced that they set the price of a full treatment course of its COVID-19 drug remdesivir at up to $4,290 for governments and $5,720 for private insurers starting in July. Public Citizen recently released an analysis showing that Gilead could price remdesivir at less than $1 per dose, or $10 for a full treatment, and still earn a profit.

Analysis: Gilead handed over $2B to shareholders while spending only $50 million on remdesivir manufacturing costs 

Gilead Paid Out $874M In Cash Dividends To Shareholders And Made $1.3B In Stock Buybacks In First Quarter Of 2020. “As of March 31, 2020, Gilead had $24.3 billion of cash, cash equivalents and marketable debt securities, compared to $25.8 billion as of December 31, 2019. During the first quarter 2020, Gilead generated $1.4 billion in operating cash flow, repaid $500 million of debt, paid cash dividends of $874 million and utilized $1.3 billion on stock repurchases.” [Gilead press release, 4/30/20]

  • Gilead Confirmed It Would Offer A Q2 Cash Dividend To Shareholders At Price Of $0.68/Share, Payable On June 29, 2020. [Gilead press release, 4/30/20]
  • As Of June 30, Gilead Had 1.25 Billion Shares Outstanding. [Bloomberg, accessed 6/30/20]
  • At Rate Of $0.68/Share With 1.25B Shares, Gilead Paid Out Approximately $850M In Dividends For Q2. [Gilead press release, 4/30/20; Bloomberg, accessed 6/30/20]

Gilead Increased R+D Spending On Remdesivir By $50M In Q1 Of 2020. “R&D expenses and non-GAAP R&D expenses increased primarily due to Gilead’s ramp up of remdesivir, an investigational antiviral for the treatment of COVID-19, including approximately $50 million of manufacturing scale-up and clinical trial costs, partially offset by lower clinical trial expenses as a result of Gilead’s pause or postponement of other clinical trials resulting from the pandemic.” [Gilead press release, 4/30/20]

  • Gilead Stated In Earnings Call That The “Potential Range” For Remdesivir Investment In 2020 Was “Up To $1 Billion.” “As we ramp up further development and manufacturing of remdesivir, we will incur additional costs beyond those forecast at the beginning of the year. The magnitude of this investment is dependent on the continued evolution of the data, the duration of the pandemic and other factors. The potential range of this investment for 2020 is upto $1 billion in the accounting treatment of this investment is dependent upon a number of factor, including potential regulatory approvals.” [Gilead Q1 earnings call, 4/30/20]

Background: Remdesivir developed with taxpayer support 

Headline: Washington Post: “Taxpayers paid to develop remdesivir but will have no say when Gilead sets the price.” [Washington Post, 5/26/20]

Washington Post: “Gilead Needed Help From U.S. Taxpayers. Lots Of Help. Three Federal Health Agencies Were Deeply Involved In Remdesivir’s Development.” “To make progress, Gilead needed help from U.S. taxpayers. Lots of help. Three federal health agencies were deeply involved in remdesivir’s development every step of the way, providing tens of millions of dollars of government research support. Now that big government role has set up a political showdown over pricing and access.” [Washington Post, 5/26/20]

Analysis Found U.S. Government Likely Has Legal Right To Patent Claim On Remdesivir. “The HIV-prevention advocacy group PrEP4All Collaboration, working with the Technology Law & Policy Clinic at New York University, released an analysis Tuesday that said the government, because it helped cull the drug from hundreds of compounds, probably has a legal right to claim it co-invented remdesivir. It contends government scientists should have been listed as co-inventors on remdesivir patents because of their contributions. It says the Trump administration should be leveraging the government’s involvement to ensure the United States and other countries can get access at a low cost.” [Washington Post, 5/26/20]

Remdesivir, Originally Labeled GS-5734, Was Discovered Through A Collaboration Between Gilead, CDC And The U.S. Army Medical Research Institute Of Infectious Diseases (USAMRIID) On Ebola Treatments.GS-5734 is a monophosphoramidate prodrug of an adenosine analog that was discovered through a collaboration among Gilead, the Centers for Disease Control & Prevention, and the U.S. Army Medical Research Institute of Infectious Diseases. Discovered in 2014, the compound already has been shown to wipe out signs of the virus in monkeys.” [American Chemical Society – Chemical & Engineering News, 7/6/16]

October 2015: Gilead Press Release Confirmed GS-5734 Was Identified In Collaboration With CDC And USAMRIID. “GS-5734 was discovered as part of Gilead’s program to screen compounds in its libraries for activity against a range of potential emerging viruses, including Ebola. In collaboration with the Centers for Disease Control and Prevention (CDC) and the United States Army Medical Research Institute of Infectious Diseases (USAMRIID), the company identified GS-5734 in vitro activity against the Ebola virus. In animal studies conducted at USAMRIID, treatment initiated on day 3 post-infection with Ebola virus resulted in 100 percent survival of monkeys.” [Gilead press release, 10/21/15]

March 2016 Study Of Effect Of GS-5734 In Monkeys Was Led By Researchers At USAMRIID. “Travis Warren, Ph.D., a principal investigator at the U.S. Army Medical Research Institute of Infectious Diseases (USAMRIID) and first author of the paper, said the work published today is the result of continuing collaborations between USAMRIID and Gilead Sciences of Foster City, Calif. Scientists at the Centers for Disease Control and Prevention (CDC) also contributed by performing initial screening of the Gilead Sciences compound library to find molecules with promising antiviral activity. That initial work identified the precursor to GS-5734, a small-molecule antiviral agent, which led to the effort by Gilead and USAMRIID to further refine, develop and profile the compound. Led by USAMRIID Science Director Sina Bavari, Ph.D., the paper’s senior author, the research team used cell culture and animal models to demonstrate the compound’s antiviral activity against several pathogens, including Ebola virus.” [USAMRIID press release, 3/3/16]

Initial GS-5734 Studies Were Conducted With Funding From The Department Of Defense And CDC. “These studies were in part supported by The Joint Science and Technology Office for Chemical and Biological Defense (JSTO-CBD) of the Defense Threat Reduction Agency (DTRA) under Plan No. CB10218. CDC core funding supported the work done by M.K.L. at CDC.” [Journal of Medicinal Chemistry, 1/26/17]

2016: Department Of Defense Awarded $1.2M To Gilead To Fund A Study On Ebola Treatment. In 2016, the Department of Defense awarded Gilead $1,196,950 for a “blinded randomized controlled study for Ebola.” [USASpending.gov, start date 5/12/16]

Background on Gilead Sciences, taxpayer funding, and price-gouging

Headline: Washington Post: “An HIV treatment cost taxpayers millions. The government patented it. But a pharma giant is making billions.” [Washington Post, 3/26/19]

U.S. Government Funded Research That Led To Gilead HIV Drug Truvada – Gilead Has Fought Government Attempts To Collect Royalties Or Distribute The Drug More Widely. “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.” [Washington Post, 3/26/19]

November 2019: Trump Administration Sued Gilead For Abusing Patents On HIV Drug It Developed With Taxpayer-Funded Research.“The Trump administration on Wednesday sued Gilead Sciences, a pharmaceutical company that sells H.I.V.-prevention drugs that can cost patients up to $20,000 a year, accusing the company of earning billions from research funded by taxpayers without paying taxpayers back. The government said the company infringed upon patents owned by the Department of Health and Human Services, and had refused attempts by the department to license its patents and collect royalties. The company sells two drugs, Truvada and Descovy, that can be taken once daily to prevent H.I.V. infection, a strategy called pre-exposure prophylaxis, or PrEP.” [New York Times, 11/7/19]

Gilead Priced Its HIV Drug At As Much As $20,000/Year In The U.S. “The Trump administration on Wednesday sued Gilead Sciences, a pharmaceutical company that sells H.I.V.-prevention drugs that can cost patients up to $20,000 a year, accusing the company of earning billions from research funded by taxpayers without paying taxpayers back.” [New York Times, 11/7/19]

Generic Versions Of Gilead’s HIV Drug, Truvada, Cost Roughly $60/Year In Africa – Gilead Has Sued To Prevent Efforts To Introduce A Generic In U.S. “In Africa, generic Truvada costs about $60 per patient per year. Gilead has sued companies that have tried to bring generic versions to the United States, keeping them out of the market after secret settlements.” [New York Times, 11/7/19]

Gilead CEO Defended Company’s Pricing Practices As Necessary For Research Investment, Noting It Spent $6B On HIV/AID Research Since 2000. “The chief executive of Gilead Sciences, the nation’s leading manufacturer of HIV drugs, defended the high cost of a key drug that prevents the lethal infection, telling a House committee Thursday that its hefty profits pay for continued research. “We have taken the disease from a death sentence to a manageable clinical condition, but we’re not done yet,” Gilead CEO Daniel O’Day told committee members. “We have to be sure that Americans get our medicines at a price that allows us to invest in research.’’ He said Gilead has spent $6 billion on HIV/AIDS research since 2000.” [Washington Post, 5/16/19]

Gilead’s HIV Drug, Truvada, Has Earned Them Six Times That – $36 Billion – Since 2004. “Truvada has earned Gilead about $3 billion a year and $36 billion since the drug was approved in 2004, but it is about to lose its exclusive patent protection.” [Washington Post, 5/16/19]

Headline: FiercePharma: “Pfizer, BMS, Gilead, AbbVie and others hike prices on hundreds of meds to ring in 2020.” [FiercePharma, 1/2/20]

Gilead Raised HIV Drug Prices By 4.9% For 2020; Claimed It Wouldn’t Affect Patient Access. “For its part, Gilead raised HIV drug list prices by 4.9% to “reflect the rising costs of goods and services necessary to produce groundbreaking medicine,” a spokesman said. The company doesn’t anticipate that the changes will affect patient access, and Gilead further supports access programs for HIV prevention and treatment options, he added.” [FiercePharma, 1/2/20]

Headline: CBS News: “VA can’t afford drug for veterans suffering from hepatitis C.” [CBS News, 12/1/15]

2015: Gilead Priced Hepatitis C Medication At $1,000 Per Pill – So Cost Prohibitive That Department Of Veterans Affairs Told Some Patients It Couldn’t Afford To Offer The Treatment. On Tuesday, a Senate report found Gilead Sciences, which makes a cure for a fatal form of hepatitis, is more interested in profits than patients. The cure was invented under the leadership of a celebrated doctor in the Department of Veterans Affairs, but at $1,000 a pill, even the VA can’t afford to save the lives of veterans who need it. . . . The drug — sofosbuvir — is sold as Sovaldi and Harvoni — and claims to cure up to 99 percent of hepatitis C patients. But there’s a catch, the retail price for a 12 week treatment is $84,000. The Department of Veterans Affairs gets a 50 percent discount, but even with that the VA told Yisrael they can’t afford to give it to everyone who needs it — including him.” [CBS News, 12/1/15]

Headline: FiercePharma: “Gilead prices hepatitis C giant Sovaldi in China at one-fifth the U.S. price: report.” [FiercePharma, 11/28/17]<

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