Over the last twenty years, new medications have dramatically changed the fight against HIV/AIDS. These medications – called pre-exposure prophylaxis, or PrEP – are remarkably effective at preventing new HIV infections, even if an individual is exposed to the virus.
Yet, for many years, the only medication available was a brand drug sold by Gilead Sciences called Truvada – and it came with a heavy price. Recently, an article from The New York Times exposed how Gilead not only set the price of Truvada out of reach for many – but also worked behind the scenes to keep the price of PrEP as high as possible.
When it came to market in 2012, Gilead set the price of Truvada at a whopping $14,000 per year. By 2021, Gilead pushed that price even higher to $22,000 per year – a 57% increase for a pill that remained unchanged.
As the Times explains:
In 2004, Gilead Sciences decided to stop pursuing a new HIV drug. The public explanation was that it wasn’t sufficiently different from an existing treatment to warrant further development.
In private, though, something else was at play. Gilead had devised a plan to delay the new drug’s release to maximize profits, even though executives had reason to believe it might turn out to be safer for patients, according to a trove of internal documents made public in litigation against the company.
This type of move is a common tactic used by brand drug companies. The lawsuits charge that Gilead kept the better drug in reserve, and then released it a higher price – and with longer patent exclusivity – just as Truvada was about to go off patent. Called product hopping, this often effectively locks patients into more expensive drugs just as they should be able to receive more affordable alternatives.
While egregious – these types of moves are not limited to Gilead. Research conducted by MGA Health for CAPD in 2020 showed that just five instances of product hopping on some of the most popular prescription drugs in America – Prilosec, TriCor, Suboxone, Doryx, and Namenda – cost American patients and the health care system nearly $5 billion in higher costs each year.
And it’s not just patients who pay more, according to our analysis of research from MGA Health:
“It’s also the cost shouldered by employers, unions, and government programs that help pay for health coverage. These higher costs push premiums higher, limit wage growth for working Americans, and force higher spending on U.S. taxpayers—all so pharmaceutical companies can get a second bite at the apple.”
Now, as the Times’ reporting illuminates, Gilead’s decision to de-prioritize the safer version of their drug is the subject of lawsuits from thousands of patients claiming that their health was directly damaged by the side effects of the riskier drug that Gilead prioritized. Meanwhile, Gilead’s patents on the newer version now extend until 2031 at the earliest, and perhaps longer.
Gilead’s patent games aren’t unique. But the extent to which they may have jeopardized patients’ health in doing so shows the lengths to which big drug companies can go to defend their higher prices.
American patients deserve better. As CAPD’s report found: Policymakers can stop anticompetitive pricing schemes like product hopping by brand drug companies.