Patent

Gilead enters into licenses with 7 Indian generics for manufacture and sale of Sovaldi


business-partnershipsLast month we reported Gilead’s slashed pricing for ‘Sovaldi’ (its anti-Hepatitis C drug) in India as well as its proposals to tie up with Indian generics for the manufacture and export of the drug (see here and here). This week has seen the concretion of these deals with 7 Indian generic companies (see here and here).

The Price Slash

As the earlier posts outlined in detail, Gilead has been caught in widespread controversies across the world over its pricing for sofobuvir, brand name ‘Sovaldi’. At its most expensive in the United States, the drug is selling at a whooping 1000$ a tablet. With the required course of treatment ranging between 12 to 24 weeks, patients are looking at a minimum of 84,000$ on drug costs alone. However, by late March, 2014, a 300$ a bottle (for 12 weeks) deal for supply to the Egyptian government for distribution via state sponsored medical schemes in state run health centers was widely reported in the press. This was followed by reports that the same pricing deal would be offered to India as well.

The Licenses 

Gilead Sciences has now entered into licensing agreements with seven Indian generic manufacturers – Cipla, Cadila Healthcare, Hetero, Strides Arcolab, Ranbaxy, Sequent Scientific and Mylan. This license allows the companies to manufacture and sell the drug in any of the 91 voluntary licence (VL) countries at their own price but at a 7% royalty rate on any sales. The pool of 91 countries included in the deal comprise of 54 middle income countries and 37 low-middle income countries. This license includes the ‘next generation’ version of the drug which combines it with experimental therapy ledipasvir. It also includes complete technology transfer of Gilead’s manufacturing process. A further term is that manufacture of the active pharmaceutical ingredients (APIs) must be in India. It bears noting the that license does not prevent the sale of the drug to non listed countries where there is no patent for the drug or where there is a compulsory license. It would also permit the grant of a compulsory license for export as under Section 92A of the Patents Act for those countries lacking manufacturing capabilities for the drug (a compulsory license must also be granted in the importing country as per this section). The inclusion of strong generic competitors in the licensing arrangements is likely to ensure that the price stays low and dramatically increase access to the drug for 54% of HCV patients.

Concerns

While this is welcome news, access to medicines advocates such as MSF (Medecins Sans Frontieres) have raised concerns. At the same time that Gilead was facing heat for its pricing, it was also facing a formidable challenge to the grant of a patent for the drug in the first place. There have been reports that the Egyptian Patent Office was not going to grant a patent for Sovaldi. In India, three pre-grant oppositions are collectively pending against the pro-drug form of Sovaldi and the base product. Are these licensing measures then just attempts to regulate generic manufacture of the drug in the event of the failure to obtain a patent?

More importantly, the license restricts export to only the 91 listed countries. This excludes many important middle income countries, including China and Brazil. MSF stresses that this is a serious concern as over 70% of HCV patients are in middle income countries. KEI estimated the the listed countries cover 54% of the total patients with HCV in the world. Thus these health groups are arguing for a wider inclusion of countries in the list. Will these limitations on the manufacture and export of the drug continue to apply as part of continued licensing arrangements even if the patent application fails?

What is certain for India is that these licenses are likely to render the grant of compulsory license on the drug (if it receives a patent, that is) highly improbable since the grounds of reasonable access, affordable price and working of the patent are likely to be unavailable.

Conclusion

Gilead’s licences are an important victory for public health. It certainly stands out in contrast to the solely profit-maximizing, non transparent practices of many other pharmaceutical companies. Gilead leads the way for the rest of Big Pharma who sell life saving drugs and who hopefully will follow suit and ethically balance business with public health.

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