Gilead acknowledges that a majority of its drug sales are to government programs while reporting gross profit margins of between 74% to 76%, yet the company continues to raise the prices of new drugs and will soon introduce new HCV drugs that could cost upwards of $100,000 per year; Advocates criticize the $28.5K price of four-in-one AIDS treatment Stribild
SAN FRANCISCO (May 8, 2013) – A group of AIDS advocates from AIDS Healthcare Foundation who are also Gilead shareholders attended Gilead Sciences’ Annual General Meeting on Wednesday to press Gilead executives, including CEO John Martin—whose 2012 compensation package was reportedly $97 million—over the company’s drug pricing and policies. At the meeting, Gilead officials acknowledged that a majority of its drug sales are to government programs while they also reported gross profit margins of between 74% to 76%.
The AHF advocate/shareholders criticized the $28,000 price of Gilead’s four-in-one AIDS treatment Stribild (Gilead reported $92 million in First Quarter 2013 sales of Stribild—it’s second quarter of sales following its FDA approval last fall) and also raised global AIDS drug access issues to lifesaving antiretroviral medications worldwide at meeting, which took place at the Westin San Francisco Airport Hotel in Millbrae, CA.
In conjunction with the Gilead meeting, the advocates arranged for a giant mobile billboard with a 20 foot banner of the Gilead logo with letters ‘GREED’ superimposed over Gilead’s name and the URL www.johnmartin-AIDSprofiteer.org to be continuously driven by the site of Gilead’s AGM at the Westin in Milbrae and throughout the Foster City neighborhood where Gilead’s headquarters is located.
“This past year alone, Gilead posted record profits on its AIDS drugs; saw its market capitalization reach over $80 billion; paid $11 billion in cash to acquire Pharmasset, giving them a potentially dominant market position in Hepatitis C without having to do any of the research while John Martin personally became one of the highest compensated CEOs in the nation,” said Ged Kenslea, Communications Director for AIDS Healthcare Foundation, who spoke at the meeting. “Despite all of this, Gilead still refuses to offer meaningful price concessions on its drugs that will help thousands of new patients access care and ensure the stability of taxpayer-funded programs Gilead profits so heavily from. What is it is going to take for Gilead to act responsibly on pricing and finally do the right thing?”
“We have no problem with companies like Gilead doing well. We have a problem when you are doing too well and not giving enough back when there is still a global AIDS crisis and people are dying without treatment. Groups like AHF are obligated to urge you to do more,” said Terri Ford, Chief of Global Advocacy for AIDS Healthcare Foundation, who also spoke at the meeting. “The only way to conquer AIDS is in triangular attack – government, non-governmental organizations and the pharmaceutical industry. You are not the enemy. We need you. You have the magic potion in ARVs. You can be heroes – beyond profit. Be heroes!”
It has been reported that Gilead intends to recoup its $11 billion purchase of Pharmasset by charging in excess of $100,000 per year for its new Hepatitis C drugs. With the network of AIDS Drug Assistance Programs (ADAP) and other government programs already cash-strapped by the record price of Stribild, such an unseemly push on Hepatitis C drug prices would be disastrous for patients. The AHF advocate/ shareholders now question whether Gilead plans to act responsibly on its pricing of Hepatitis C drugs, or will it continue to push the limits of what taxpayers and the government will be forced to pay?
The sharp increases in AIDS drug costs are fueled by the skyrocketing prices of each new generation of drugs. By law, ADAP drug prices for existing drugs cannot increase more than inflation. However, there are no restrictions on the price charged for new drugs. The companies have exploited this fact, increasing the price of their new products by tens of thousands of dollars in order to offset the discounts they must provide to ADAPs and other programs.
This trend could not be clearer: Since 1995, the average price of new AIDS drugs has increased a whopping 163%.
AHF also placed a newspaper sticky note advertisement of the “Gilead/GREED John Martin/AIDS profiteer” image (as found on the mobile billboard) on copies of today’s San Francisco Chronicle that was delivered to homes of Chronicle subscribers in neighborhoods surrounding the company’s headquarters in Foster City, California—including Foster City, Burlingame, Millbrae, and Redwood City in San Mateo County, as well as to subscribers in portions of the city of San Francisco.