Gilead ($GILD) opens process kimono on AIDS drug

It's counterintuitive in any manufacturing business, including pharma. Yet turning over the process keys is one way that drugmakers are getting high-demand drugs to patients in low-income countries.

Gilead Sciences ($GILD), maker of the HIV drug Viread, provides a case in point. It sells the drug at cost to poor countries after working to minimize component costs. "This is our manufacturing cost, the cost of distribution," executive VP Gregg Alton tells PBS Newshour. Other drugmakers have adopted a similar approach to get needed drugs to the poor.

But Gilead doesn't stop there. The Bay Area drugmaker is also licensing its formulations to Indian generics makers. Alton says Gilead provides the "manufacturing know-how" to make the drug, including its API.

They will produce and sell the drug for less than what Gilead charges in its no-profit model; far less than what it charges in its for-profit pricing for rich countries. The generics makers are allowed to sell the drug in India and nearly 100 other countries.

Selling AIDS drugs at no profit in poor countries appears to becoming part of the business model. Most drugmakers have accepted that they "must recoup their research costs in the rich countries," according to the program. 

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