AHF: Gilead’s Record 76% Profit Margin Squeezes Taxpayer-Funded AIDS Programs

  AHF: Gilead’s Record 76% Profit Margin Squeezes Taxpayer-Funded AIDS
  Programs

  Gilead Sciences (GILD), makers of Stribild – the most expensive first line
combination AIDS therapy on the market today at $28,500 per patient, per year
– has outpaced industry averages in revenue growth and gross profit margin by
gouging the prices of combination AIDS therapy treatments that are paid for by
                             government programs

 Exploitation of Medicare, Medicaid, and other programs drives up healthcare
costs and keeps patients out of care – as patents on several Gilead drugs are
set to expire and the company hiked the prices of four HIV/AIDS medications by
  an average of 6% on Jan. 1, AIDS Healthcare Foundation (AHF) reaffirms its
                   demand that Gilead lower its drug prices

Business Wire

WASHINGTON -- January 17, 2013

According to a stock buy recommendation from New York-based stock analyst
group TheStreet Ratings released this week, pharmaceutical giant Gilead
Sciences (GILD) shows first quarter earning increases compared to this time
last year across the board that exceed industry averages by a large margin.
Leading global nonprofit AIDS Healthcare Foundation (AHF) contends these
record earnings come at the expense of patients who cannot access treatment
for HIV/AIDS due to Gilead’s price gouging.

TheStreet reported Gilead’s closing stock price has jumped 76.13% compared to
its closing price one year ago, and the group expects the price to rise even
higher. Additionally, the group said Gilead’s gross profit margin is
“currently very high” at 76.90%, another increase from the same quarter last
year. Additionally, the company’s net profit margin of 27.83% exceeds industry
averages. Gilead’s revenue growth was up 14.4% from this time last year and
again outpaces the industry average growth of 5.4%.

“AHF has repeatedly criticized Gilead and its CEO John Martin – whose income
last year was $54 million – for price gouging on its HIV/AIDS treatments, an
action that places the drugs out of reach for many patients due to increases
in healthcare costs trickling down to government programs and insurers such as
Medicare and Medicaid as well as private insurers and programs like the AIDS
Drug Assistance Program,” said Michael Weinstein, President of AIDS Healthcare
Foundation.

Stribild, Gilead’s four-in-one combination pill that was approved by the Food
and Drug Administration in early September of last year, is the most expensive
AIDS first line treatment on the market today at $28,500 per patient, per
year, which was 35% higher than the price of their best-selling treatment at
that time and is more than most HIV/AIDS patients earn annually.

Already this year, on January 1, Gilead raised the prices of four key AIDS
medications 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.

A new study released this week in the Annals of Internal Medicine compared the
potential economic savings of using generic antiretroviral treatment instead
of branded medication like Atripla to the possible reduction in drug efficacy,
caused largely by the increase in pill burden that threatens to knock patients
off their medical regimen with missed doses.

Though the study found the increased pill burden – requiring patients to take
two or three pills daily instead of the all-in-one combinations sold by Gilead
– could lead to a potential loss of 4.4 months of life per patient per
lifetime, the projected economic savings exceeded a billion dollars in annual
healthcare costs. The more affordable generic treatment options are the same
medications that have been keeping people living with HIV/AIDS alive in Africa
and developing countries like India for decades, as pointed out by AHF
President Michael Weinstein in a press statement earlier this week.

“The savings could be as much as one billion dollars per year here in the
United States, while the efficacy decreased relatively slightly when using
generics,” Weinstein said. “Now that Gilead’s patents on many key drugs are
expiring, the company must lower its prices of drugs like Atripla, Stribild—a
four-in-one combination that actually relies on several older Gilead drugs
that were otherwise approaching end of patent. In addition, we strongly
believe that local, state, and federal governments should use every tool at
their disposal to bring down drug prices. As tax dollars ultimately pay for
most of these drugs, we extend our call on Gilead for price concessions on
these AIDS drugs.”

About AIDS Healthcare Foundation

AIDS Healthcare Foundation (AHF), the largest global AIDS organization,
currently provides medical care and/or services to more than 183,000
individuals in 28 countries worldwide in the US, Africa, Latin
America/Caribbean, the Asia/Pacific Region and Eastern Europe. To learn more
about AHF, please visit our website: www.aidshealth.org, find us on Facebook:
www.facebook.com/aidshealth and follow us on Twitter: @aidshealthcare.

Contact:

AIDS Healthcare Foundation
Ged Kenslea, +1-323-308-1833
mobile: 323-791-5526
ged.kenslea@aidshealth.org
or
Kyveli Diener, +1-323-308-1821, ext. 1805
mobile: 310-779-4796
kyveli.diener@aidshealth.org
 
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