Gilead wins HIV patent manipulation suit but AIDS health group to appeal

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For as long as Gilead Sciences ($GILD) has been making HIV and AIDS meds, it has been the target of AIDS groups over its pricing and availability of drugs. In the latest skirmish, the California company has brushed aside a lawsuit on a patent issue, but the healthcare group that accused it of anticompetitive practices says it will appeal and take the matter to the Supreme Court if necessary.  

The U.S. District Court for the Northern District of California last week granted Gilead’s motion to dismiss the case, which had been filed in January. But the AIDS Healthcare Foundation (AHF), which spends millions of dollars a year on Gilead meds for its four dozen health centers, found enough encouragement in the judge’s ruling to decide “this case is ripe for reconsideration by higher courts.”

The issue involves Gilead’s new HIV meds containing tenofovir alafenamide fumarate, or TAF, which can work at a fraction of the dose of last-gen product Viread, a TDF,  significantly cutting down on side effects. In its lawsuit, the AHF claimed that while Gilead had data on the drug a decade ago, it delayed TAF in “a calculated, anticompetitive manner” to keep the prices on Viread high and prevent generics-makers from snapping up market share.

But Judge William Alsup ruled last week while Gilead may have delayed bringing the meds to market the AIDS Healthcare Foundation had been unable to explain “how the delay constituted unfair competition.”

He wrote that Gilead’s patents gave it a monopoly over both TDF and TAF and that it was under no obligation to introduce the improved product at an earlier date. It said any competitor could have beaten Gilead to market for a better med. “Without more, it is not unlawful [under antitrust law] for any competitor in any market to delay the introduction of a new product or an entire line of new products until, as [the plaintiff] alleged in this case, the competition forces such introduction,” Alsup wrote.

AHF said Monday it has decided to appeal the ruling, “all the way to the Supreme Court, if necessary, should that be required to prevent Gilead from using a faulty patent process to garner more profits at the expense of patient health.” It also has taken the issue to lawmakers in Washington, hoping to get Gilead investigated for its pricing, as some other drugmakers have been.

The ruling actually comes at the same time that Gilead is raising the prices on its older TDF-based drugs apparently to try to move patients to newer meds before patents expire. A Cowen & Co. analysts report recently said that since taking its annual price increase of 5% to 7% in January, the biotech has upped the tags on a range of older meds by another 7% to 10%.

The report points to Stribild and Complera, whose prices both went up 7%, making them now more expensive than their follow-up meds Genvoya and Odefsy, respectively.

“We suspect that these increases were taken on the TDF-based regimens to help accelerate the switch from TDF to TAF in advance of TDF patent expirations beginning in 2018,” the analysts said in a recent investor note.

- read the court’s ruling
- here’s the foundation release

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