Gilead Expands Global HIV/AIDS Access Programme with Four Licensing Deals

Gilead Expands HIV/AIDS Access Programme

As US biopharmaceutical firm Gilead Sciences looks to accelerate access to its HIV/AIDS anti-retrovirals (ARVs), the firm today (12 July) announced the expansion of its global-access programme. The expanded programme consists of four non-exclusive rights licensing deals with four Indian generic manufacturers—Hetero Drugs, Matrix Laboratories (now part of US generic major Mylan), Ranbaxy laboratories and Strides Arcolab—for three drugs currently in late-stage clinical development—elvitegravir, cobicistat and the "Quad"—and two already marketed products, Viread (tenofovir disoproxil fumarate; TDF) and Truvada (emtricitabine/TDF) in 95 developing countries including India. The pacts allow the sale of Viread and Truvada in an additional 16 countries, with the former allowed to be manufactured and marketed as a chronic hepatitis B treatment in the expanded markets. Under the deals, Gilead will transfer technical know-how to the Indian firms including manufacturing processes, while the licensees will be allowed to establish their own prices but will have to pay royalties on sales of the finished products. The US speciality firm will waive royalty payments for paediatric formulations of the products covered by the licensing pacts. Gilead will receive 3% royalty on generic sales of tenofovir, which is also approved for use in hepatitis B, and 5% on the other products. Elvitegravir is an investigational integrase inhibitor licensed from Japan Tobacco (JT); Cobicistat is an ARV boosting agent while the "Quad" is a combination of four Gilead HIV medicines into a once-daily single tablet regimen. Viread and Truvada accounted for about 10% of Gilead's USD7.4 billion in revenues last year

Gilead Enters Pact with Medicines Patent Pool Foundation

In other news, Gilead announced it had granted the Medicines Patent Pool similar licensing terms as that of its Indian partners. The Medicines Patent Pool was established in July 2010 with the support of UNITAID, aiming to work with major pharma to expand global access to quality low-cost ARV therapy through licensing of patents and technologies. The Medicines Patent Pool is funded by a tax on airline tickets sold in 15 countries and other donations.

Outlook and Implications:

The four Indian firms are active suppliers of ARVs in the developing world (see World: 1 June 2011: UNITAID, CHAI, and DFID Announce ARV Drug Price Cuts). Gilead's entering into licence deals with will extend the reach of its ARVs in developing markets where it would otherwise have a limited presence. This move allows the US speciality firm to capitalise on both generic and innovative markets, allowing the firm to build market presence for its newly developed products and more quickly gaining revenues. With prices in developing countries significantly lower than developed markets, the revenue contribution from these individual markets will not be significant, but collectively could garner the firm sufficient revenues. Currently, more than 1.1 million patients in developing countries are on a Gilead HIV ARV drug manufactured by Indian generic firms; with approximately 500,000 on the firm's branded products, giving it 24% of the total ARV market in developing markets.

The licensing deals build on previous deals that have seen the prices of Gilead's ARVs in developing countries drop to USD6.15 per patient per month. The pacts allow Gilead in conjunction with its partners to boost manufacturing capacity to meet the growing demand for new ARVs as developing countries scale up their HIV/AIDS treatment programmes and the incidence of ARV drug resistance increases. As per UNAIDS figures, approximately 15 million people require ARV treatment globally, with the figure expected to grow to 30 million in the next five years. By including Viread under licence for chronic hepatitis B, Gilead gains market access to an additional 350 million patients who are mainly located in developing countries and India, markets which would have otherwise been inaccessible to the company or would have increased its operational expenses to gain access to.

Following much hesitation from drug majors to join the HIV/AIDS drugs patent pool (see World - United Kingdom - United States: 23 July 2010: UNITAID in Talks with Reluctant Drug Majors to Join HIV/AIDS Drugs Patent Pool), Gilead has taken the leap to be the first innovative firm to kick start the pool. This means firms interested in manufacturing generic versions of Gilead's ARVs for developing countries will be able to do so through the Patent Pool using the licensing terms agreed with the US firm. By adding its products to the patent pool, Gilead by-passes any compulsory licensing issues in developing countries. This could spur more generic firms to foray into the ARV segment, which is currently dominated by Indian firms Cipla in India and Ranbaxy, Strides Arcolab, Matrix, and Aurobindo in sub-Saharan Africa. With Gilead taking the plunge, other major pharma such as GlaxoSmithKline (UK), Bristol-Myers Squibb (US), Roche (Switzerland), Boehringer Ingelheim (Germany) and Pfizer (US) could be incentivised to join the pool. This could improve access to newer ARVs in developing countries, almost at the same time as developed ones, cutting the 5–10 year delay previously seen.

With both major pharma and generic firms facing increasing business pressures, both are turning to partnerships, using their respective strengths to capitalise on the potential of the developing and emerging markets. This trend is expected to continue in the immediate-to-medium term.