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Our Take: U.S. government sues Gilead Sciences in dispute over PrEP patents

Nov 18, 2019

The Trump administration has filed a lawsuit in a federal district court on behalf of the Department of Health and Human Services (HHS) against Gilead Sciences, seeking damages for alleged infringement of HHS patents related to the use of Truvada and Descovy for pre-exposure prophylaxis (PrEP) for HIV prevention.

Our Take:
At first glance, that doesn’t seem to make much sense — considering that Gilead developed Truvada, a combination of two other drugs that Gilead developed for treating patients with HIV (Viread [tenofovir disoproxil] and Emtriva [emtricitabine]) — so we’ll break it down and provide some context.

 

When the Food and Drug Administration approved Truvada back in 2004, it was indicated as a treatment for people who were already infected with HIV. Then, in 2012, the FDA approved Truvada for PrEP. In this indication, uninfected people who are at high risk take Truvada every day to lower their risk of infection, should they be exposed to the virus. Incidentally, PrEP also includes other measures, such as practicing safe sex, attending risk reduction counseling, and getting tested for HIV on a regular basis.

 

Meanwhile, in the mid 2000s, researchers at the Centers for Disease Control and Prevention were investigating the use of HIV drug combinations as a means of preventing HIV infection. Since 2015, HHS has applied for and been granted four patents for this research. In a press statement HHS issued about the lawsuit, the agency states that “[h]undreds of millions of taxpayer dollars funded many of [the CDC’s] trials” and that the patents “entitle HHS to license CDC’s PrEP regimens and receive a reasonable royalty for their use.”

 

Gilead issued a statement in May in which it said the government “did not invent PrEP, Truvada, or Truvada for PrEP.” The company formally challenged the validity of HHS’ patents in August, stating that published materials “clearly show that well before HHS claims to have invented the concepts of PrEP and PEP [post-exposure prophylaxis] in 2006, others had conceived of using an antiretroviral therapy, including Truvada …, for both forms of prophylaxis.”

 

In response to the lawsuit, Gilead said it has acted in good faith to come to a resolution with HHS and that the company would be asking the court to stay the litigation until the Patent Office has completed the review Gilead requested in August.

 

There’s a lot of money at stake, so this “dispute” could get uglier, and it could be a while before it’s settled.

 

Truvada can cost patients $20,000 or more a year, and Gilead has earned billions annually on sales of the drug. According to Advisory Board, the wholesale price of Truvada has increased about 45% in the last six years.

 

And yes, as we mentioned above, the government’s lawsuit includes Descovy (emtricitabine/tenofovir alafenamide), another Gilead combination drug originally approved in 2016 as a treatment for HIV infection. The FDA just approved Descovy last month as a PrEP regimen for men and transgender women. (Gilead hasn’t conducted large-scale trials of Descovy as a PrEP regimen in cisgender women yet, which is why the FDA excluded that population from the approval.)

 

No other drug company sells an FDA-approved PrEP regimen in the U.S., and HIV/AIDS activists have accused Gilead of price gouging. One group, the PrEP4All Collaboration, said, “If HHS is truly invested in ending the HIV epidemic, it will use these patents as leverage to ensure that everyone who needs PrEP can get it.”

 

In May, HHS touted the fact that the Trump administration had secured a “historic donation of billions of dollars in HIV prevention drugs.” That’s when Gilead agreed to donate up to 2.4 million bottles of Truvada each year to the CDC for uninsured Americans at risk for HIV, through 2030. At the time, the company said it would transition the donation to Descovy if the FDA approved it for use as PrEP.

 

Gilead said that despite the dispute, it will continue to work with federal agencies, including HHS and CDC, toward ending the HIV epidemic.

 

 

What else you need to know
Private equity firm KKR & Co. submitted a formal bid to buy Walgreens Boots Alliance, Bloomberg reported last Monday. Although no purchase price was mentioned, the report, citing people “familiar with the matter,” said if the deal to take the company private were successful, it could be the largest leveraged buyout ever. Walgreens has a market value of approximately $56 billion and debit of $16.8 billion, according to Bloomberg. Walgreens’ CEO, Stefano Pessina, partnered with KKR to acquire Alliance Boots in 2007; that deal was valued at $22 billion. Walgreens shares closed up 5% at $62.25 on the day the news was reported.

 

The merger between Sanford Health and UnityPoint Health is off. The two nonprofit health systems, based in Sioux Falls, S.D., and Des Moines, Iowa, respectively, signed a letter of intent in June to form a combined entity with 76 hospitals, operations in 26 states, and annual revenue of $11 billion. Last Tuesday, however, they announced separately that discussions had ended. A letter written by UnityPoint CEO Kevin Vermeer and posted on the company’s website gave no specific reason, but Sanford Health’s CEO, Kelby Krabbenhoft, indicated in a statement that the deal fell through because “the UnityPoint Health board failed to embrace the vision.”

 

Providence St. Joseph Health will begin a multiyear rebranding initiative next year, starting midyear in Southern California. All sites of service within the Renton, Wash.-based health system will be unified under the Providence name and will bear the St. Joseph “cross” logo. Hospitals will keep their legacy names but will also feature the Providence name and the logo. Providence St. Joseph Health resulted from a 2016 merger between Providence Health & Services and St. Joseph Health. It’s one of the country’s largest Catholic health systems, with 51 hospitals, 829 clinics, and other facilities that provide services in seven states.

 

Geisinger’s medical school will offer free tuition to 40 students each year through the Primary Care Scholars Program, the Danville, Pa.-based health system announced last Wednesday. Those who are selected must commit to practicing in the primary care field after their residency — and within the Geisinger system for at least four years. Along with full coverage of tuition and fees, they will receive a living stipend of $2,000 per month throughout the four years of medical school. The program is being offered to current first- and second-year students at the school “on a competitive basis,” Geisinger noted, and applicants accepted into each incoming class (of 115 students total) will be invited to apply.

 

Highmark Health is partnering with Contessa to offer home-based hospital care. The joint venture company, known as Home Recovery Care LLC, “will provide all essential elements of inpatient care in the home through telemedicine, in-home providers, and robust care management oversight,” according to a press release. Participating members with low-risk health issues who go to the emergency department will have the option to receive treatment at home instead of being admitted. They will be monitored for 30 days to make sure they are following their care plans and going to follow-up appointments. The service is available to select Highmark commercial health plan members now; it will be expanded to Medicare Advantage members starting in January and to all plan members in Pennsylvania by the end of 2020.

 

Atrium Health and Novant Health are joining Blue Premier, the value-based network of Blue Cross and Blue Shield of North Carolina (Blue Cross NC). With the addition of Atrium and Novant, Blue Cross NC noted in a press statement that seven of the state’s largest health systems will be participating in Blue Premier next year, putting the insurer “on track to meet its goal of having 50% of its members served by providers in value-based, shared-risk agreements in 2020.”

 

Optum CEO Andrew Witty has been promoted to president of UnitedHealth Group (UHG), the company announced last Monday. In addition to being the CEO of Optum — a role he will retain — Witty served as executive vice president of UHG since March 2018. Before joining UHG and Optum, he was CEO of GlaxoSmithKline from 2008 to 2017.

 

What we’re reading
The Association Between Perceived Electronic Health Record Usability and Professional Burnout Among US Physicians. Mayo Clinic Proceedings, September 2019 (abstract available without subscription)

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