How a drugmaker benefited from slow implementation of promising HIV

How a drugmaker benefited from slow implementation of promising HIV therapy

In 2004, Gilead Sciences decided to stop developing a new HIV drug. The public explanation was that it was not sufficiently different from an existing treatment to warrant further development.

In private, however, something else played a role. Gilead had devised a plan to delay the new drug’s launch to maximize profits, although executives had reason to believe it might prove safer for patients, according to a wealth of internal documents released as part of a lawsuit against the company.

Gilead, one of the world’s largest drugmakers, appeared to be using a tried-and-true industry tactic: exploiting the US patent system to protect lucrative monopolies on its best-selling drugs.

At the time, Gilead already had two blockbuster HIV treatments, both based on a version of a drug called tenofovir. The first of these treatments should lose patent protection in 2017, leaving competitors free to introduce cheaper alternatives.

The promising drug, then in early testing, was an updated version of tenofovir. Gilead executives realized it could potentially be less toxic to patients’ kidneys and bones than the earlier version, according to internal memos unearthed by attorneys suing Gilead on behalf of patients.

Despite these potential benefits, executives concluded that the new version risks competing with the company’s existing, patent-protected formulation. If they delayed the release of the new product until just before the existing patents expired, the company could significantly extend the period that at least one of its HIV treatments remained protected by patents.

The “patent renewal strategy,” as it was repeatedly called in the Gilead filings, would allow the company to keep the prices of its tenofovir-based drugs high. Gilead could switch patients to its new drug just before cheap generic drugs hit the market. By getting tenofovir on track to remain a profitable juggernaut for decades, the strategy was potentially worth billions of dollars.

Gilead finally introduced a version of the new treatment in 2015, nearly a decade after it would have been available had the company not halted development in 2004. Its patents now run until at least 2031.

The delayed release of the new treatment is now the subject of state and federal lawsuits, in which about 26,000 patients who took Gilead’s older HIV drugs allege the company unnecessarily exposed them to kidney and bone problems.

In the court filing, Gilead’s attorneys stated that the allegations were unfounded. They denied that the company halted development of the drug to boost profits. They cited an internal memo from 2004 that estimated that Gilead could increase its sales by $1 billion in six years if it released the new version in 2008.

“Had Gilead been motivated solely by profit, as plaintiffs allege, the logical decision would have been to expedite development of the new version,” the attorneys wrote.

Gilead’s senior attorney, Deborah Telman, said in a statement that “the Company’s research and development decisions have always been and continue to be guided by our focus on providing safe and effective medicines to the people who prescribe and use them.”

According to IQVIA, an industry data provider, a generation of expensive Gilead drugs containing the new version of tenofovir now accounts for half of the HIV treatment and prevention market. One popular product, Descovy, has a sticker price of $26,000 per year. Generic versions of its patent-expired predecessor, Truvada, now cost less than $400 a year.

If Gilead had started developing the updated version of the drug back in 2004, its patents would have expired or would have expired soon.

“We should all step back and ask, ‘How did we let this happen?'” said James Krellenstein, a longtime AIDS activist who advised attorneys on the lawsuit against Gilead. He added, “This is what happens when a company intentionally delays the development of an HIV drug for monopolistic reasons.”

Gilead’s apparent maneuver with tenofovir is so common in the pharmaceutical industry that it has a name: product hopping. Companies suspend their monopoly on a drug and, just before generic competition emerges, switch their patients to a newer patented version of the drug to prolong the monopoly.

Drugmaker Merck, for example, is developing a version of its blockbuster cancer drug Keytruda that can be injected under the skin and will likely expand the company’s revenue streams for years after the infused version of the drug first faces competition from other companies in 2028. (Julie Cunningham, a spokeswoman for Merck, denied that the company is product hopping, saying the new version is “a novel innovation aimed at bringing greater levels of convenience to patients and their families.”)

Christopher Morten, a drug patent law expert at Columbia University, said the Gilead case shows how the US patent system creates incentives for companies to slow down innovation.

“Something completely wrong happened here,” said Mr. Morten, who provides free legal services to an HIV advocacy group that unsuccessfully challenged Gilead’s efforts in 2019 to extend the life of its patents. “The patent system has actually encouraged Gilead to delay development and launch of a new product.”

David Swisher, who lives in central Florida, is one of the plaintiffs suing Gilead in federal court. Beginning in 2004, he took Truvada for 12 years and developed kidney disease and osteoporosis. Four years ago, when he was 62, his doctor told him he had “the bones of a 90-year-old woman.”

It wasn’t until 2016, when Descovy was finally on the market, that Mr Swisher shut down Truvada, which he believed was harming him. By that point, he said, he had become too ill to work and had retired from his job as a flight operations manager.

“I feel like I’ve been robbed of all my time,” he said.

First synthesized by researchers in what was then Czechoslovakia in the 1980s, tenofovir was the stepping stone to Gilead’s dominance of the HIV treatment and prevention market

In 2001, the Food and Drug Administration first approved a product containing Gilead’s first iteration of tenofovir. Four more would follow. The drugs stop HIV, the virus that causes AIDS, from multiplying.

You have decisively changed the fight against AIDS and saved millions of lives worldwide. The drugs were used not only for treatment, but also as prophylaxis for people who were at risk of infection.

But a small percentage of patients taking the drug to treat HIV developed kidney and bone problems. It proved particularly risky when combined with booster drugs to increase its effectiveness – a practice that was once common but has now fallen out of favor. The World Health Organization and the US National Institutes of Health advise against using the original version of tenofovir in people with fragile bones or kidney disease.

The newer version doesn’t cause these problems, but it can lead to weight gain and high cholesterol. Experts say the two tenofovir-based drugs — the first known as TDF and the second known as TAF — offer roughly equal risks and benefits for most people.

Internal company records from the early 2000s show that Gilead executives at times debated whether to speedily bring the new formulation to market. In some places, the docs classify the two iterations of tenofovir as similar for safety reasons.

However, other memos suggest that the company believed the updated formula was less toxic based on studies in labs and on animals. These studies showed that the newer formulation had two benefits that could reduce side effects. It was far better than the original at delivering tenofovir to its target cells, meaning far less of it made it into the bloodstream where it could get to the kidneys and bones. And it could be administered in a lower dose.

The new version “could result in a better side effect profile and lower drug-related toxicity,” according to an internal memo from 2002.

That same year, the first human clinical trial began with the newer version. A Gilead employee designed a development schedule that would have brought the newer formulation to market in 2006.

But in 2003, Gilead executives started moving forward. They feared it would “eventually cannibalize” the growing market for the older version of tenofovir, according to minutes of an internal meeting. Gilead’s then-principal of research, Norbert Bischofberger, directed company analysts to study the potential of the new formulation as an “intellectual property expansion strategy,” a colleague said in an email.

That analysis led to a September 2003 memo describing how Gilead would develop the newer formulation to “replace” the original, with development “scheduled to be introduced in 2015.” In the best-case scenario, company analysts calculated that their strategy would generate more than $1 billion in annual profits between 2018 and 2020.

Gilead began reviving the newer formulation in 2010, putting it on track for a 2015 release. John Milligan, Gilead’s president and future CEO, told investors it would be a “kinder, gentler version” of tenofovir.

After receiving regulatory approvals, the company launched a successful marketing campaign aimed at doctors, promoting the new version as safer for the kidneys and bones than the original.

According to Ipsos, a market research firm, by 2021 nearly half a million HIV patients in the US were taking Gilead products containing the new version of tenofovir.

Susan C. Beachy contributed to the research.