GlobalData Release: Make Your Move: Gilead Sciences, Inc. Taunts Advocacy Groups With Stribild Pricing
Published: Aug 29, 2012
Picking fights with advocacy groups is not something Gilead is unfamiliar with. The US-based drug maker has been consistently maligned by various advocacy groups despite using access programs to make its anti-retroviral drugs available to developing countries at cheaper prices. Over the past two years, the company has worked to alleviate the impact of high drug prices on access to care by increasing its discounts to cash-strapped AIDS Drug Assistance Programs (ADAPs), thereby enabling patients on ADAP waiting lists to finally access lifesaving care. However, according to AIDS advocates, these actions are insufficient and Gilead should do much more, rather than continue to report billions in yearly revenues. GlobalData believes AIDS advocates might have scored a point with Gilead as the company, which recorded $8.1 billion in 2011 sales (a 9.4% increase from $7.4 billion in 2010), recently signed agreements with Ranbaxy Laboratories, Mylan and Strides Arcolab, for the manufacture of high-quality, low-cost generic versions of Emtriva in developing countries. However, it remains to be seen if the company will make similar arrangements for Stribild. In June 2012, months before Stribild’s approval, a coalition of AIDS advocates spearheaded by the AIDS Healthcare Foundation (AHF) wrote to Gilead urging the company not to “decimate ADAP” by pricing the drug higher than Atripla, the most prescribed HIV/AIDS medication. This was based upon earlier fears that Stribild could cost up to $34,000 a year, 38% more than Atripla. The company’s decision to price Stribild at a WAC of $28,500 a year means it will cost about 12.3% more than Atripla. Without a doubt, Gilead would have envisaged some pushback from advocacy groups before pricing the drug. This brings to the fore the old debate about what the key motivators are for pharmaceutical companies to stay in business: to provide life-saving treatments to patients who are in dire need of them, or to announce huge profits and make shareholders smile all the way to the bank? The drug development process is surely an expensive and risky one but where, if at all, do we draw the line at pricing? GlobalData believes that the Stribild story has just begun and looks set to present many twists in subsequent weeks. AIDS advocacy groups will derive some encouragement from Gilead’s recent generic manufacturing deals and feel that they can pressure the company into reducing Stribild’s WAC, or grant them sizeable discounts. Gilead has named its price and a response is expected to follow. However, if history is anything to go by, patient advocacy groups can be very persistent and will travel great lengths to achieve their goals.
*Make Your Move: Gilead Taunts Advocacy Groups with Stribild Pricing
This expert insight was written by Adefemi Adenuga, GlobalData analyst covering healthcare industry dynamics. If you would like an analyst comment or to arrange an interview, please contact us on the details below.
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