On November 6, the U.S. Department of Health and Human Services sued Big Pharma giant Gilead Sciences, Inc. for infringement of secondary, new-use patents on HIV antiretrovirals previously used to treat HIV and now authorized for use to prevent HIV. The story of federal research funding, patent shenanigans, extortionary pricing, and lost prevention opportunities is an object lesson on the broken monopoly-based model for researching and marketing medicines. The best solution to the resulting patent quagmire is negotiating voluntary licenses to allow generic competition or the issuance by the U.S. government of compulsory licenses on Gilead’s branded version of pre-exposure prophylaxis, Truvada® (a combination of tenofovir disoproxil fumarate or TDF and emtricitabine or FTC) and Descovy® (a combination of tenofovir alafenamide fumarate or TAF and FTC)—to undo the harm of Gilead’s profiteering.
The discovery of tenofovir and emtricitabine both start in university laboratories. Tenofovir was first discovered and synthesized at the Czech Academy of Sciences in 1984 and found to be active against HIV shortly thereafter. The first tenofovir patent was filed in 1985 but has now long since expired. In 1997, University of California at San Francisco researchers and scientists from Gilead showed that tenofovir was effective in treating HIV in humans after Gilead discovered an oral-friendly pro-drug form, TDF, which it immediately patented. Gilead also discovered TAF, a different prod-drug form, and conducted research on it in 2002, but announced its was stopping TAF research in 2004. Nonetheless Gilead continued to file TAF-related secondary patents, including in 2005, via its Japanese partner, a patent on TAF combination products. Gilead kept TAF on the shelf, however, and did not publish positive results until 2014.
FTC was synthesized at Emory University in the mid-1980s and patented in 1990/1991 and is chemically nearly identical to an earlier antiretroviral lamivudine. Emory’s research on FTC was subsidized by NIH and the U.S. Department of Veteran’s Affairs with at least $3.344 million. Emory entered into a licensing agreement with Triangle Pharmaceuticals, Inc. in 1996. Gilead acquired Triangle in 2003 and started marketing FTC shortly thereafter. In 2005, Gilead and Royalty Pharma paid Emory a lump-sum $525 million to buy out the future royalty stream.
Although the original patent on tenofovir was strong, meaning it was novel, non-obvious, and useful, almost all of the patents on tenofovir and emtricitabine and their combination are weak in terms of patentability criteria. In an attempt to maximize profits, dozens of patents have been filed on methods of manufacture, formulations, combinations with other ARVs, and new uses, including to treat hepatitis B. Most relevant to the current controversy, combination patents were granted to Gilead for TDF/FTC and TAF/FTC, though both are weak on novelty and inventiveness/non-obviousness grounds. These combination patents, however, are set to expire in the near future.
Building on top of this weak foundation of secondary patents on pro-drug chemical entities, new uses, and non-inventive combinations, the U.S. government invested in a clinical trial of TDF/FTC to investigate its effectiveness and safety for HIV pre-exposure prophylaxis (PrEP). Specifically, the Center for Disease Control (CDC) invested nearly $52 million in the iPrEX trial at the same time that the Bill and Melinda Gates Foundation funded the sister Partners PrEP trial. Based on those trial outcomes, Gilead filed for FDA approval of the Truvada® PrEP indication and received it in 2012.
Once the PrEP indication was approved, Gilead doubled the price and happily sold PrEP at high cost for several years earning billions of dollars in PrEP sales. At the same time it was selling PrEP for nearly $20,000 per person per year in the U.S., it entered into pay-for-delay deals with multiple generic companies that were otherwise challenging its weak and expiring Truvada® patents. But it could foresee the collapse of its PrEP goldmine, and so it brought TAF out of mothballs, combined it with FTC and undertook to convince prescribers and patents to product hop from Truvada® to Descovy®. It was so intent on product hopping to Descovy® before Truvada® faced generic competition that it rushed through clinical trials for Descovy®’s use for PrEP and conducted studies only in men who have sex with men and transgender women. The highly vulnerable population of cisgender women who desperately need PrEP as a self-administered tool to prevent HIV infection, including millions of young women in sub-Saharan Africa, were excluded. As a result, the initial approval of Descovy® for PrEP excludes cis-gender women (pregnant and non-pregnant). Gilead pursued this reckless course only because its monopoly protections for Descovy® were longer than its monopolies on Truvada®.
Even before its IPrEX trial and Gilead’s marketing of Truvada®PrEP, the CDC filed its first applications for a new-use PrEP patent on FTC + tenofovir derivatives on Jan. 31, 2007. Because of patent term extensions, that patent has an expiration date in 2031. Two CDC “continuation” patents relating to the original patent were subsequently filed in 2015 and 2017 and have expiration dates in early 2027. All of these patents have been granted. They have also been ignored by Gilead.
Gilead rejects and is now challenging the validity of the CDC PrEP patents. Because it had refused to enter into a licensing agreement with the CDC for several years, the Department of Health and Human Services belatedly filed its recent patent infringement lawsuit. This lawsuit claims past royalties of $1 billion and further claims that its recovery should be tripled because Gilead’s infringement was willful. It is not clear that the government is seeking alternative remedies of PrEP licenses for generic producers or 90%–or greater–price reductions from Gilead.
A pure royalty remedy is a highly undesirable outcome even if it would go into CDC coffers and provide some dedicated resources for community HIV prevention services. Although collecting past due royalties might seem harmless, collecting ongoing royalty rates would inevitably increase the future price on PrEP medicines as Gilead would simply add the royalty rate to its selling price. It would be far superior to use the claim for $1 billion in retroactive royalties and entitlement to future royalties to force Gilead to grant immediate licenses to TDF/FTC and TAF/FTC to multiple generic producers who are selling a year’s supply of PrEP for as little as $60 per person per year in many low- and middle-income countries. The CDC could further leverage its demand for licenses by virtue of its “march-in” rights to the fruits of federally funded research if resulting medicines are not made available to the public on reasonable terms. As an additional source of leverage, HHS could threaten to use 28 U.S.C. section 1498 to issue a government use license that would allow the U.S. source generic PrEP for all federally supported programs.
Access to PrEP is painfully and shamefully limited because of Gilead’s monopoly pricing and product hopping and because of the government’s failure to set up a PrEP program that could serve the interests of all 1.2 million people in the U.S. needing immediate access to affordable PrEP. Instead, Gilead has tried to pull the wool over our eyes by “donating” a limited supply of PrEP for just 200,000 persons over the next ten years, aided and abetted by the Trump administration which has recently given $6 million to Gilead to distribute a small quantity of its “free” PrEP to just 4,250 patients – that’s a whopping $1412 per person!
Rather than subsidize Gilead’s distribution, the U.S. government could use money saved from purchasing low-cost generic PrEP to appropriate money for comprehensive HIV prevention services for at-risk populations. CDC and AIDS service organizations should not be in the unenviable position of having to rely on continued high prices charged by Gilead to get dimes on the dollar of what should otherwise be appropriated by Congress on a sustainable basis.