Gilead Allows Generic HIV-Drug Sales in Developing Nations

Gilead Sciences Inc. (GILD) will allow sales of generic versions of four HIV treatments in developing countries in the first agreement between a drug company and a patent-sharing body backed by the United Nations.

The deal permits copies of Gilead’s Viread and Emtriva medicines in 111 countries, while two experimental drugs, cobicistat and elvitegravir, will be available in 102 and 99 nations, respectively, after they’re approved by regulators, the Medicines Patent Pool Foundation said today. Gilead also announced new terms under which three Indian drugmakers will make and sell versions of three treatments.

“This license will help increase access to much-needed medicines for the treatment of HIV, and help accelerate the development of productive formulations of these medicines,” Ellen ‘t Hoen, executive director of the foundation, said at a London news conference. The Geneva-based organization said it’s negotiating to obtain licenses from six other patent holders.

Viread and Emtriva accounted for about 10 percent of Gilead’s $7.4 billion in sales last year. The Foster City, California-based company will get royalties of 5 percent for the generic sales, except for Viread revenue, which will carry royalties of 3 percent, Gilead said. Royalties will be waived for any medicines developed to treat children.

Besides the four drugs, the agreement also covers a one- pill mixture of the four medicines known as “the quad,” which is in clinical trials.

Indian Manufacturers

Gilead rose 28 cents, or less than 1 percent, to $41.55 at 4 p.m. New York time in Nasdaq Stock Market trading. The stock has gained 15 percent this year.

Indian drugmakers Ranbaxy Laboratories Ltd. (RBXY), Strides Arcolab Ltd. (STR), Matrix Laboratories Ltd. and Hetero Drugs Ltd. also will have the right to make and sell copies of the elvitegravir, cobicistat and the Quad once they’re approved for sale by regulators, according to a statement from Gilead, the world’s largest seller of AIDS medicines. The company first licensed Viread and Truvada to Indian drugmakers in 2006.

The original agreement, which covered 95 countries, is being expanded to include 16 additional nations, plus the experimental drugs, Gilead said. It also allows Viread to be sold for treatment of hepatitis B.

“What we realized is, if we could transfer our manufacturing technology to Indian generics non-exclusively, and have some competition develop there, access would increase,” John Martin, CEO of Gilead, said at the news conference.

Drug Access

Gilead doesn’t have an estimate for how much money will be generated by the royalties, he said. The company’s program to expand drug access to poor populations is meant to be non- profit, the company said.

The deal with Gilead “will enhance our capability to provide quality affordable medicines for the treatment of HIV/AIDS in the developing countries,” Rajiv Gulati, president of the global pharmaceutical business at Ranbaxy, said in a statement sent to the Bombay Stock Exchange.

About 2.6 million people became infected with HIV in 2009, and more than 1.8 million people died with AIDS-related causes, according to the Joint United Nations Programme on HIV/AIDS.

The patent pool is in talks with other makers of HIV drugs, except for Johnson & Johnson (JNJ), Merck & Co. and Abbott Laboratories (ABT), ‘t Hoen said. “We hope that the remaining three companies not yet in negotiations will come forward now and enter into formal negotiations,” ‘t Hoen said.

‘Very Competitive’

Abbott has had discussions with the pool and more talks are scheduled, said Dirk van Eeden, director of HIV communications and policy for the Abbott Park, Illinois-based drugmaker. He declined to discuss details.

Abbott’s top-selling AIDS drugs Kaletra and Norvir already have “very limited patent protection” that allows generic versions in all of Africa and other UN-designated “least developed countries,” van Eeden said in a telephone interview. The company’s HIV medications are “very competitive with any of the generic drugs that are on the market,” he said.

“Merck in principle supports the objective of the Medicines Patent Pool Foundation for expanding access to care, and we’ll continue to monitor and assess the patent pool proposal,” Pamela Eisele, a company spokeswoman, said in an interview. The Whitehouse Station, New Jersey-based company said June 9 it would reduce prices for its Isentress HIV drug in low- income countries.

Messages weren’t immediately returned by Tricia Geoghegan, a spokeswoman for New Brunswick, New Jersey-based J&J.

The agreement with Gilead doesn’t go far enough toward extending treatment to people with HIV in developing countries in part because it confines production to India and limits the supply of certain ingredients, Doctors Without Borders, a humanitarian agency, said in a statement.

“Most critically, people living with HIV in certain middle-income countries are excluded,” said Michelle Childs, a director at the aid group. “This license should not become the template for future agreements.”

To contact the reporters on this story: Charles Mead in London at cmead11@bloomberg.net; Adi Narayan in Mumbai at anarayan8@bloomberg.net

To contact the editor responsible for this story: Phil Serafino at pserafino@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.