Louisiana wants HHS head Price to sidestep Gilead hepatitis C patents: report

Under a strained healthcare budget, Louisiana’s health secretary Rebekah Gee is preparing to request that the U.S. government sidestep Gilead patents on hep C meds. Photo courtesy of Stuart Seeger on Flickr: https://www.flickr.com/photos/stuseeger/2171280729.

Under great pressure to make an M&A move and grappling with crashing hepatitis C sales, Gilead Sciences could soon find itself facing another challenge, this time from the U.S. government.

Louisiana’s health secretary Rebekah Gee is working with experts to craft a request that HHS secretary Tom Price sidestep patents on Gilead’s critical hep C meds in order to buy drugs and treat the state’s patients who don’t have insurance or who are on Medicaid, Kaiser Health News reports.

Gee brought up the idea in an April letter to health experts, and those discussions have gained steam, KHN says. Now, Gee and others are crafting a proposal that, if granted, would allow the state to bypass Gilead’s patents. It’d require the government pay some compensation to Gilead and prove the process would benefit the government. Other states could duplicate the effort if it proves successful.

Gilead and the pharmaceutical lobbying group PhRMA didn’t comment on the proposal, according to the news service.

Related: Senator asks VA to yank patent on Gilead's Sovaldi to crush its price

Louisiana’s patent-busting discussions represent just the latest threat to Gilead during a tough time for the California biotech. Quickly after launching Sovaldi back in 2014, the company attracted heaps of criticism over its $84,000 list price but pressed ahead to reap billions in sales in subsequent years. Since then, it’s launched combo treatments Harvoni and Epclusa, but has seen competition in the market take a huge cut out of its revenues.

Under those challenges, investors and analysts have been pressing the company for several quarters to make an acquisition. CEO John Milligan this week said the company is looking at oncology as one area of focus.

“A number of different opportunities … could play out over the coming year as we start to make progress in getting partnerships and potential acquisitions together,” Milligan said.

Related: Gilead's new deal scout faces tough task as investors clamor for M&A

It’s not the first time officials have proposed sidestepping Gilead’s patients in order to treat  patients with tight healthcare budgets. Back in 2015, Sen. Bernie Sanders asked the Department of Veterans Affairs to use the same law to buy drugs for sick veterans.

More recently, Memorial Sloan Kettering Center official Peter Bach, proposed that the government actually purchase Gilead in order to save on hep C treatments. In January, Bach and MIT Center for Biomedical Innovation director Mark Trusheim wrote that Gilead could fetch a price of $156 billion. After the government sold off unneeded assets, Gilead would cost about $40 billion, they calculated. At that price, it’d cost $15,700 per patient to treat the nation’s hep C patients.

Related: Should the U.S. try M&A to save on hep C? Gilead would be a good buy, experts say

Bach recently released an interactive Louisiana budget calculator, demonstrating the types of tradeoffs the state government would need to make in order to treat its hep C patients.