Gilead strikes deal on cheaper version of hepatitis C drug

The shifting global pharmaceutical industry shifted a bit more Monday when Gilead Sciences said it struck a deal with seven India-based generic drugmakers, including a subsidiary of Pittsburgh-based Mylan Inc., to make and sell cheaper versions of Gilead's $1,000-per-pill hepatitis C medication, Sovaldi, in 91 developing nations.

Brand-name drug companies usually fight generic competition for as long as possible, to keep profits high. Gilead's announcement does not completely change that dynamic - the price won't change in the United States - and the company, like others, has had tiered pricing with other medications, such as those for HIV/AIDS, depending on national wealth.

Still, given the attention, price, and revenue associated with Sovaldi since it received U.S. Food and Drug Administration approval in December, Monday's deal reflects the quickly changing landscape of global competition and governments intent on treating patients without bankrupting their nation. Hepatitis C is a big global problem, killing 350,000 people a year and afflicting up to 150 million worldwide, according to the World Health Organization. Three million to four million Americans have hepatitis C.

"We have set three basic pricing tiers (based on a country's per capita income and hepatitis C prevalence) that serve as the starting point for negotiations with national governments. The tiers are low-income, low middle-income, and upper-middle income," Gregg Alton, Gilead Sciences' executive vice president for corporate and medical affairs, said, according to the Times of India.

Sovaldi not only is much easier to take than previous hepatitis C treatments, which required more pills and injections, it also has cured from 80 percent to 90 percent of patients. Gilead justified the U.S. price of $84,000 for a 12-week regimen by stressing that other treatments, such as liver transplants, would be avoided. In the first two quarters of 2014, Sovaldi had revenue of $2.3 billion, then $3.5 billion.

Gilead will sell its version of Sovaldi in India at $300 for a month's supply - 99 percent less than in the U.S. Copies rarely can be sold for more than the original, so the generic price will drop. Ranbaxy, which has a subsidiary in Princeton, is among the other generic companies involved. Besides India, the licenses are for sales in countries as large as Indonesia, Pakistan and Egypt, but not China.

Gilead faced pressure from several corners. Merck was a hepatitis C competitor before it agreed in June to buy Idenix Pharmaceuticals for $3.85 billion. Idenix and Gilead are fighting patent battles with regulators in several countries, including the U.S. Even in India, Gilead has patent battles, though royalties from Monday's deal might generate cash and reduce those legal bills.

Meanwhile, U.S. senators want an explanation on the U.S. price, and nongovernmental groups want lower prices everywhere.

"Gilead's licensing terms fall far short of ensuring widespread affordable access to these new drugs in middle-income countries, where over 70 percent of people with hepatitis C live today," Rohit Malpani, director of policy and analysis for Doctors Without Borders, said in a statement.