Pharmaceutical company Gilead Sciences sued for delaying launch of HIV drug for profit motives

The company Gilead Sciences, one of the largest pharmaceutical companies in the world, in 2004 stopped the production of a new drug to combat the HIV virus. The public explanation was that its effectiveness was not too different from an existing treatment to warrant further development. The company is being sued by about 26,000 patients across the United States.

Despite Gilead’s justification, the company had devised a plan to increase its profits. According to the complaint, the company sought to manipulate the US patent system in order to protect profitable monopolies on top-selling drugs.

At that time, the company was responsible for two of the main successful treatments against HIV, based on a version of the drug tenofovir. Executives were aware that the new drug had the potential to be less toxic to patients’ kidneys and bones compared to treatments already on the market.

However, fearful that the promising new drug could compete with the company’s existing formulation of tenofovir, they delayed the product’s launch for years.

The company maneuver

According to the documents, Gilead expected to delay the launch until just before the expiration of patents on treatments already available on the market. Thus, the company could switch patients to the new product shortly before the generic drug was made available on the market. The new drug, however, was only released almost a decade later, in 2015. The patents for this product are valid until 2031.

Gilead’s apparent maneuver with tenofovir is so commonplace in the pharmaceutical industry that it has a name: product jump. Companies take advantage of their monopoly on a drug and, just before generic competition arrives, switch—or “skip”—patients to a more recently patented version of the drug to prolong the monopoly a little longer.

Internal company records from the early 2000s show that Gilead executives sometimes struggled with deciding whether to bring the new formulation to market. At some points, the documents present the two iterations of tenofovir as similar from a safety point of view.

But other memos indicate the company believed the updated formula was less toxic, based on laboratory and animal studies. These studies showed that the new formulation had two advantages that could reduce side effects. It was much better than the original at delivering tenofovir to its target cells, meaning it leaked far less into the bloodstream where it could travel to the kidneys and bones. And it could be given in a smaller dose.

_{Scientist working in the Gilead Sciences laboratory (Photo: reproduction/NBCNews/Bloomberg/GettyImages)}

Patients’ complaints

Due to the deliberately delayed launch, around 26,000 patients who took the company’s oldest drugs went to court, claiming that they had been unnecessarily exposed by the company to kidney and bone problems.

Gilead’s lawyers have denied the allegations, calling them “groundless“. They denied that the company purposefully stopped production of the drug to maximize patent profits. The defense filed a 2004 internal memo that estimated that the company could increase its revenue by about $1 billion over six years if it launched the new product in 2008.

If the pharmaceutical had continued the development of the medicine in 2004, the patents of the medicine considered promising would have expired or would be close to expiring. With the delay, the company has a few more years of exclusivity over the drug, preventing generic drugs from being made available on the market.

Featured Photo: Gilead Company. Playback/BioSpace.