In 2004, Gilead Sciences decided to stop looking for a new HIV drug. He public explanation was that it was not different enough from an existing treatment to warrant further development.
In private, however, something else was at stake. Gilead had devised a plan delaying the launch of the new drug to maximize profits, even though executives had reason to believe it might be safer for patients, according to a trove of internal documents made public in a lawsuit against the company.
Gilead, one of the world’s largest drugmakers, appeared to be adopting a well-known industry tactic: gaming the US patent system to protect lucrative monopolies on top-selling drugs.
At the time, Gilead already had a couple of successful HIV treatments, both supported by a version of a drug called tenofovir. The first of those treatments would lose patent protection in 2017, at which point competitors would be free to introduce cheaper alternatives.
The promising drug, then in the early stages of testing, was an updated version of tenofovir. Gilead executives knew he had the potential to be less toxic to the kidneys and bones of patients than the previous iteration, according to internal memos uncovered by the lawyers who are suing Gilead on behalf of the patients.
Despite those potential benefits, executives concluded that the new version risked competing with the company’s existing patent-protected formula. By delaying the launch of the new product until shortly before the existing patents expired, the company could substantially increase the length of time that at least one of its HIV treatments remained off-patent.
The “patent extension strategy,” as Gilead’s documents repeatedly call it, 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 generics hit the market. By putting tenofovir on the path to remain a lucrative giant for decades, the strategy was worth potentially billions of dollars.
Gilead ended up submitting a version of the new treatment in 2015, nearly a decade after it might have been available had the company not halted development in 2004. Its patents now extend until at least 2031.
The delay in launching the new treatment is now the subject of state and federal lawsuits in which some 26,000 patients who took Gilead’s older HIV drugs say the company needlessly exposed them to kidney and bone problems.
In court documents, Gilead’s lawyers said the allegations were without merit. They denied that the company halted development of the drug to boost profits. They cited a 2004 internal memo that estimated Gilead could increase its revenue by $1 billion over six years if it released the new version in 2008.
“Had Gilead been motivated solely by profit, as the plaintiffs contend, the logical decision would have been to speed up” development of the new version, the lawyers wrote.
Gilead’s lead 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 delivering safe and effective medicines to the people who prescribe and use them.”
Today, a generation of expensive Gilead drugs containing the new iteration of tenofovir account for half the market for HIV treatment and prevention, according to IQVIA, an industry data provider. One widely used product, Descovy, has a sticker price of $26,000 a year. Generic versions of its predecessor, Truvada, whose patents have expired, now cost less than $400 a year.
If Gilead had gone ahead with developing the updated iteration of the drug in 2004, its patents would have expired by now or soon.
“We should all take a step back and ask: How did we let this happen?” said James Krellenstein, a veteran AIDS activist who has advised the lawyers who sued Gilead. He added: “This is what happens when a company intentionally delays the development of an HIV drug for monopoly purposes.”
Gilead’s apparent move with tenofovir is so common in the pharmaceutical industry that it has a name: product jumping. Companies take advantage of their monopoly on a drug and then, shortly before generic competition arrives, switch, or “jump,” patients to a newer patented version of the drug to prolong the monopoly.
Drugmaker Merck, for example, is developing a version of its hit cancer drug Keytruda that can be injected under the skin and is likely to expand the company’s revenue streams for years after the infused version of the drug faces its first competition from other companies in 2028. patients and their families).
Christopher Morten, an expert in pharmaceutical patent law at Columbia University, said the Gilead case shows how the US patent system creates incentives for companies to slow down innovation.
“Something profoundly wrong happened here,” said Mr. Morten, who provides pro bono legal services to an HIV advocacy group that in 2019 unsuccessfully challenged Gilead’s efforts to extend the life of its patents. “The patent system actually encouraged Gilead to delay developing and launching a new product.”
David Swisher, who lives in Central Florida, is one of the plaintiffs suing Gilead in federal court. He took Truvada for 12 years, starting in 2004, and developed kidney disease and osteoporosis. Four years ago, when he was 62, he said, his doctor told him that he had “the bones of a 90-year-old woman.”
It wasn’t until 2016, when Descovy was finally on the market, that Swisher turned off Truvada, which he believed was hurting him. At the time, he said, he was too sick to work and had retired from his job as an airline operations manager.
“I feel like all that time was taken from me,” he said.
First synthesized in the 1980s by researchers in what was then Czechoslovakia, tenofovir was the springboard for Gilead’s dominance in the market for HIV treatment and prevention.
In 2001, the Food and Drug Administration first approved a product containing Gilead’s first iteration of tenofovir. Four more would follow. The drugs prevent the replication of HIV, the virus that causes AIDS.
Those became revolutionaries in the fight against AIDS, credited with saving millions of lives around the world. The drugs came to be used not only as a treatment but also as a prophylactic for those at risk of becoming infected.
But a small percentage of patients taking the drug to treat HIV developed kidney and bone problems. It proved especially risky when combined with booster drugs to enhance the effectiveness of a third anti-HIV drug in the regimen, a practice once common but has since fallen out of favour. He World Health Organization and the United States National Institutes of Health advise against the use of the original version of tenofovir in people with brittle bones or kidney disease.
The newer version doesn’t cause those problems, but it can cause weight gain and high cholesterol levels. For most people, experts say, the two tenofovir-based drugs, the former known as PTOthe second call taf — offer approximately equal risks and benefits.
Internal company records from the early 2000s show that Gilead executives at times struggled to decide 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. Those studies showed that the newer formulation had two advantages that could reduce side effects. It was much better than the original at delivering tenofovir to its target cells, meaning much less of it leaked into the bloodstream, where it could travel to the kidneys and bones. And it could be given at a lower dose.
The new version “may translate into a better side effect profile and less drug-related toxicity,” an internal memo from 2002 reads.
That same year, the first human clinical trial of the new version was launched. A Gilead employee mapped out a development timeline that would have brought the newest formulation to market in 2006.
But in 2003, Gilead executives began to sour for rushing it. They worried that doing so would “ultimately cannibalize” the growing market for the older version of tenofovir, according to minutes of an internal meeting. Gilead’s head of research at the time, Norbert Bischofberger, instructed the company’s analysts to explore the potential of the new formulation as an “extension strategy” for intellectual property, according to a colleague’s email.
That analysis resulted in a September 2003 note which described how Gilead would develop the newer formulation to “replace” the original, with development “scheduled such that it will be released in 2015.” At best, the company’s analysts calculated, its strategy would generate more than $1 billion in annual profit between 2018 and 2020.
Gilead moved to resurrect the newer formulation in 2010, putting it on track for launch in 2015. John Milligan, Gilead’s president and future CEO, told investors it would be a “kinder, gentler version” of tenofovir.
After obtaining regulatory approvals, the company embarked on a successful marketing campaign, targeting physicians, which promoted their new iteration is safer for the kidneys and bones than the original.
By 2021, according to Ipsos, a market research firm, nearly half a million HIV patients in the United States were taking Gilead products that contained the new version of tenofovir.
susan c beach contributed research.