Gilead Sciences, Inc. Faces Challenges For High Prices Of Sovaldi In Europe

Gilead Sciences, Inc. Faces Challenges For High Prices Of Sovaldi In Europe

Gilead faces legal challenges in Europe by the Medecins du Monde over the exorbitant prices for Sovaldi

By Aliya Kaleem on Feb 10, 2015 at 9:32 am EST

Gilead has been legally challenged by the European Medecins du Monde (MdM) for charging "exorbitant" prices for its Hepatitis C (HCV) treatment, Sovaldi.

The global health charity organization accused Gilead Sciences, Inc. (NASDAQ: GILD) of charging extraordinary prices for Sovaldi – generically known as sofosbuvir – and “abusing” its patents.

MdM mentioned that the challenge marks the first time that a medical charity organization in Europe has adopted such means of making expensive treatments more affordable and accessible.

MdM claimed that sofobuvir was not innovative enough to be eligible for the patent. The charity organization said, "While using sofosbuvir to treat hepatitis C represents a major therapeutic advance, the molecule itself, which is the result of work by many public and private researchers, is not sufficiently innovative to warrant a patent." It concluded that "As Gilead is abusing its patent to impose prices which are unsustainable for healthcare systems, (MdM) has decided to contest it."

Gilead’s spokeswoman declined to comment on the challenge at the moment.

According the World Health Organisation, approximately 150 million people are infected with Hepatitis C worldwide. A majority of these belong to developing or underdeveloped middle or low-income countries, which cannot afford these expensive treatments. In Europe alone, 7.3-8.8 million people are estimated to be infected by the chronic virus.

Sovaldi works by blocking proteins that are known to aid HCV cells in multiplying and spreading. It was approved by the FDA in 2013 and costs $84,000 for a 12-week treatment course. The drug generated sales of $5.8 billion in the first six months of its launch, marking the most successful drug launch in history.

Sovaldi has long been facing criticisms regarding its exorbitant price tag. Gilead had initially justified the high prices with the high cure rates and the very few side-effects associated with it. However, with increasing pressure from health insurers, and AbbVie Inc (NYSE: ABBV) bringing in its competitive treatment at a lower price, Gilead ultimately announced that it will be offering the drug at a significant discount to pharmacy benefit managers in the US in 2015.

Sovaldi was approved and launched in Europe in January 2014. According to MdM, the drug costs $50,160 (£33,000) – around a 40% discount compared to the US prices for the drug, which still cannot be afforded by many people.

Sovaldi is one of the most significant drugs in the Hepatitis C treatment space, as various other HCV drugs from other drugs makers are administered in combination with it.

The legal challenge by MdM, if successful, could open the door to competitive and cheaper generic versions of the Hepatitis C treatment in the European market; it is said that the drug could be produced for costs as low as £66.

MdM's director for the French programs, Jean-François Corty said the challenge issued against Gilead by the charity organization was merely an act to defend the universal access to healthcare. He said, “The struggle against health inequality involves safeguarding a healthcare system based on solidarity.”

Mr. Corty added that even in high-income countries such as France – which has a drug budget of €27 billion per year – it is quite difficult to meet these high HCV-treatment costs, making it inaccessible to a large chunk of the population. He further added that the difficulty in meeting these medical needs is “seeing an arbitrary rationing approach that excludes patients from care."

Gilead has recently been facing similar patent issue in India, as the patent office rejected Sovaldi's patent for not being innovative enough.

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