Corporate Welfare Fuels Gilead’s Record Q1 Profits

In Advocacy, News by AHF

Gilead’s profits and earnings in first quarter of 2013 are tied to price increases on key AIDS drugs, and the evergreening of older drugs into the pricey new combination Stribild and a Hep C drug priced so high it could impede access to medications through government programs, including cash-strapped AIDS Drug Assistance Programs (ADAPs)

AHF says Gilead reaping “ill-gotten gains” from taxpayer-funded programs—which account for at least 75% of the company’s U.S. revenues—continue to foot the bill while people with HIV/AIDS are denied access to lifesaving treatment and Gilead’s coffers overflow with cash

LOS ANGELES, CA (May 2, 2013)-Following the release of drug company Gilead Sciences, Inc.’s first-quarter 2013 earnings report, AIDS Healthcare Foundation (AHF) today challenged the company’s financial performance as one based on corporate welfare, as the company continues to reap enormous profits by charging taxpayer-funded programs like state AIDS Drug Assistance Programs (ADAPs) astronomical prices for key AIDS drugs, by the “evergreening” of medications soon to go off-patent and a scheme to drive up the price of its cure for Hepatitis C.

In 2012, Gilead raised the price of its best selling AIDS drug, Atripla, to $20,800 (Wholesale Acquisition Price – WAC), a 50% price hike since it was first approved in 2005. In September 2012, the company introduced its four-in-one HIV drug, Stribild, at a yearly wholesale price (WAC) of $28,500 per patient, making it the most expensive combination HIV drug on the market. Stribild uses the active ingredient Tenovofir, which is also used in Atripla and Gilead’s other older medications. The patent for Tenofovir expires in 2017, but Gilead will be able to keep the price high by using it in other drugs, such as Stribild.

In addition, Gilead has drawn the ire of the Hepatitis C community since the company has refused to cooperate with Bristol-Myers Squibb (BMS) on a cure for Hepatitis C.

“Make no mistake: the impressive financial results from the first quarter of 2013 announced today by Gilead are made off the backs of people living with HIV and AIDS who are being denied access to lifesaving medications because of the company’s greed. Corporate welfare fuels Gilead’s business, as they continue to callously scheme to squeeze as much profit out of taxpayer-funded state-run AIDS Drug Assistance Programs, designed for the poor,” said AHF President Michael Weinstein.

Added Weinstein: “Gilead is naïve to think that it can continue on this path of ill-gotten gains without it eventually coming back to hurt them where they live – the bottom line. Government and non-government purchasers of these drugs – and the taxpayers and customers they serve – will not tolerate endless price hikes on drugs that deny lifesaving care to patients, while Gilead’s CEO John Martin enjoys compensation up to $97 million, making him one of the top ten highest paid executives in the country. Gilead’s shareholders should take note: success stemming from corporate welfare at the expense of taxpayers and HIV/AIDS patients is not ultimately a sustainable business model.”

Stribild, Gilead’s four-in-one AIDS treatment combination, was approved by the Food and Drug Administration (FDA) in early September and immediately priced by Gilead at $28,500 per patient, per year, Wholesale Acquisition Cost (WAC). That price was over 35% more than Atripla, the company’s best selling combination HIV/AIDS treatment, and made Stribild the highest priced first line combination AIDS therapy today.

Already this year, on January 1st, Gilead raised the prices of four key AIDS medications in the U.S. by an average of 6%, including the price of Atripla, its best-selling three-in-one combination treatment, the price of which was increased by 6.9% to a Whole Acquisition Cost (WAC) of $1,878.23 per patient, per month. The other three HIV/AIDS medications that saw price hikes are Complera, which was raised by 5.8% to a WAC of $1,936.53; Emtriva, by 5.5% to a WAC of $478.45; and Viread, by 6% to a WAC of $771.39.

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