Intended for healthcare professionals

Analysis

Betting on hepatitis C: how financial speculation in drug development influences access to medicines

BMJ 2016; 354 doi: https://doi.org/10.1136/bmj.i3718 (Published 27 July 2016) Cite this as: BMJ 2016;354:i3718

Pharmaceutical Hepatitis C Anti-viral Drug Pricing: Rogues or Robin Hoods

Roy and King provide a perceptive analysis illuminating the challenges faced by the National Health Service with regard to the price of patented drugs. However it is important to adopt a panoramic view of the socioeconomic situation. Both the NHS and Gilead exist in a global healthcare nexus. It cannot go unmentioned that Gilead in 2014 entered a licensing agreement with manufacturers in India to produce generic versions of sofosbuvir much more cheaply for distribution to now 101 third world countries(1). This includes in excess 100 million people, around 54% of the global population suffering from hepatitis. In addition, most third world countries have been awarded much more favourable arrangements with regard drug pricing. In 2014, of nations profiting from such agreement the lowest cost per 28-tablet bottle of sofosbuvir was $300 in India and Pakistan; compared to in excess of $15,000 and $18,000 in the US and UK respectively(2). On this analysis it could be argued that more affluent countries are subsidising treatment in the third world. Indeed viewed through this prism, Gilead is acting as a contemporary "Robin Hood": taking from the rich and giving to the poor; with western affluence coming at an unexpected price.

The license agreement is a step lauded by the World Health Organisation. However WHO recognises that even with these subsidised prices, the cost of newer hepatitis C therapy remains prohibitively expensive(3). The cost of 3-months treatment with sofosbuvir-daclatasvir is $1350 in Egypt(2). On one calculation treating every patient in Egypt afflicted with hepatitis C would still cost five times the Egypt's 2011 public health budget(4). This is all the more difficult to justify given that the production cost of a 12-week course of treatment with sofosbuvir-daclatasvir is estimated at $121 for Gilead(5). In addition a number of middle income countries with high hepatitis C burdens, such as Brazil, China, Georgia, Mexico, Thailand and Ukraine are excluded from such agreements(3).

Even this analysis is in some ways imperfect. Profits are theoretically recycled into the economy in the form of corporation tax. It is estimated that Gilead's corporation tax for the year ending 2015 was in excess of £3.5billion, predominantly on anti-viral sales totalling in excess of $30 billion(6,7). However at least some part of the due tax contribution may remain theoretical. It has been inferred from Gilead’s tax report that up to $28.5 billion of revenue is potentially sequestered in off-shore accounts. On repatriation to the USA this money would could be subject to a $9.7 billion tax bill(8).

Roy and King suggest that the patients pay twice, however more accurately they pay 2.5 times. One for drug development, secondly to subsidise cheap generics in the third world, thirdly for expensive drugs aiding profits; finally they are partially compensated by Gilead's tax contribution. The first two payments are commendable; however some consider the third in many ways objectionable.

(1) http://www.who.int/phi/implementation/ip_trade/sofosbuvir_report.pdf
(2) Andrieux-Meyer I, Cohn J, de Araújo ES, Hamid SS. Disparity in market prices for hepatitis C virus direct-acting drugs. Lancet Glob Health. 2015 Nov;3(11):e676-7. doi: 10.1016/S2214-109X(15)00156-4
(3) http://www.who.int/bulletin/volumes/93/11/15-157784/en/
(4) Londeix P. New treatments for hepatitis C virus, strategies for achieving universal access. Brussels: Médecins du Monde; 2014. Available from: http://hepcoalition.org/IMG/pdf/web_daas_strategies_for_achieving_univer...
(5) Hill A, Khoo S, Fortunak J, Simmons B, Ford N. Minimum costs for producing hepatitis C direct-acting antivirals for use in large-scale treatment access programs in developing countries. Clin Infect Dis. 2014 Apr;58(7):928–36
(6) https://www.stock-analysis-on.net/NASDAQ/Company/Gilead-Sciences-Inc/Ana...
(7) http://www.gilead.com/news/press-releases/2016/2/gilead-sciences-announc...
(8) http://www.forbes.com/sites/christopherhelman/2016/04/15/what-americas-m...

Competing interests: No competing interests

01 August 2016
Chika E Uzoigwe
Doctor
Harcourt House
Harcourt House