U.S. Government Sues Gilead over Alleged Infringement on HIV Prevention Drug

Posted on 11/08/2019

U.S. President Donald Trump campaigned to lower the cost of drugs for Americans, while combating the HIV academic. One of the president’s targets are abuses in the pharmaceutical industry, which at times profits off of U.S. taxpayer-funded research. According to recent filings, Gilead Sciences Inc. generated HIV product sales of US$ 11.9 billion for the nine months ended September 30, 2019, compared to US$ 10.6 billion for the same period in 2018. Gilead markets two drugs, Truvada and Descovy, as part of a regimen to help prevent HIV. These drug regimens are a key piece to reduce infections. Increased usage of Truvada has been a key component of revenue growth for Gilead. The HIV prevention business is big business for Gilead as total HIV drugs for the nine months ended September 30, 2019 were US$ 11.861 billion versus total product sales of US$ 16.323 billion. Vanguard Group and BlackRock are the largest institutional shareholders of Gilead. Norway Government Pension Fund Global holds 12,771,885 shares of Gilead at the end of December 31, 2018.

DOJ Files Complaint

The U.S. Department of Justice (DOJ) disclosed that the U.S. government filed a complaint in the U.S. District Court for the District of Delaware alleging infringement by Gilead Sciences Inc. and Gilead Sciences Ireland UC (collectively, Gilead) of four U.S. patents awarded to and owned by the United States, Department of Health and Human Services (HHS). These patents cover specific drug regimens used for pre-exposure prophylaxis (commonly referred to as PrEP) that prevents HIV transmission. The Department of Health and Human Services alleges that the U.S. government owns the PrEP patent for both Truvada and Descovy. The DOJ alleges that Gilead had repeatedly refused to obtain a license for use of the patented drug regimens, while continuing to profit from hundreds of millions of dollars of publicly funded research. Gilead has challenged the validity of all four patents before the U.S. Patent and Trademark Office (PTO).

“Gilead has received billions of dollars in revenue from HIV prevention regimens invented by HHS researchers and patented by the United States,” said Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division in a press release. “This lawsuit demonstrates the Department’s commitment to protect the government’s intellectual property and hold accountable those who seek to unfairly gain from the government’s research without paying reasonable royalties as the law requires.”

President Trump at his 2019 State of the Union address revealed an initiative to end the HIV epidemic with the goal of reducing new HIV infections by 90% by 2030. Back in the early 2000’s, researchers at the Centers for Disease Control and Prevention’s (CDC) Division of HIV/AIDS Prevention invented two-drug regimens that could, for the first time, prevent people from becoming infected with HIV. The U.S. government spent hundreds of millions of dollars on clinical studies of these treatment regimens. According to the DOJ press release, “patented research have shown that approximately 99% of at-risk persons who adhere to a once-daily PrEP regimen are protected from HIV transmission.”

Gilead Responds

“We are surprised that the government has requested that a district court judge and jury look at the same issues of patent validity that the Patent Office will be deciding,” Gilead said in a statement on November 7, 2019. “We will be asking the district court to stay the litigation until the Patent Office has an opportunity to undertake the review that we already have requested.”