Gilead scheduling meet-up with Massachusetts AG over hep C pricing: Globe

Gilead Sciences ($GILD) is scheduling a meeting with Massachusetts Attorney General Maura Healey after last week's threat of legal action against the company. And though some legal experts doubt Healey's standing in a court fight over Gilead's high prices on hep C drugs, the AG's office apparently sees some backing for the idea.

Massachusetts Attorney General Maura Healey

In an arm-twisting move against Gilead's hep C prices, Healey wrote CEO John Martin suggesting a potential unfair trade practice claim. Now, as the Boston Globe reports, the state's top lawyer won't discuss how her office would build a case against the company.

But they have said they're looking at a complaint under the state's consumer protection law--which has huge firepower, and provides for triple damages, according to an expert on the statute who spoke to the Globe. But it would require proving that Gilead engaged in "unfair and deceptive" practices. Overpricing in itself probably wouldn't qualify, but Healey could try to make a case that "general harm to a vulnerable population" would meet the legal standard.

It's a long shot, according to some industry observers, who cite the failure of a Pennsylvania health fund to advance a similar argument in California. The Southeastern Pennsylvania Transportation Authority (SEPTA) sued Gilead last year, accusing the company of price-gouging, but a state judge ruled on summary judgment that federal patent law supersedes state claims.

Healey may have something else in mind, the Globe notes. The AG's office might press Gilead in other ways--using its investigatory powers, for instance. It might also be trying to let public pressure do its work.

Gilead is experienced at resisting that sort of pressure, however, and public criticism of its hep C drug pricing has been going on ever since it set an $84,000 list price on its first next-gen treatment, Sovaldi. Meanwhile, competition from AbbVie's ($ABBV) Viekira Pak--and now, Merck & Co.'s ($MRK) brand-new two-drug cocktail Zepatier--has forced Gilead to offer big discounts to payers on the drugs. Merck significantly undercut both Gilead and AbbVie with its Zepatier pricing--$54,600 per treatment course, $40,000 less than Gilead's two-drug combo, Harvoni.

- read the Globe piece

Special Reports: Top 15 pharma companies by 2014 revenue - Merck - AbbVie - Gilead | Biopharma posts a chart-topping 41 new drug approvals in 2014 - Harvoni - Viekira Pak

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