Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Gilead allegedly manipulated patent system to extend patent exclusivity for HIV treatment drug, (Jan 27, 2016)

By Linda O’Brien, J.D., LL.M.

Research and pharmaceutical company Gilead Sciences has engaged in anticompetitive conduct by manipulating the patent system to extend patent exclusivity and delay generic competition for Tenofovir Alafenamide, an antiviral drug used in the treatment of human immunodeficiency virus (HIV), according to a complaint filed in the federal district court in San Francisco (AIDS Healthcare Foundation, Inc. v. Gilead Sciences, Inc., January 26, 2016).

AIDS Healthcare Foundation, Inc. (AHF) is the largest non-profit provider of specialized HIV/AIDS medical care in the United States. AHF provides counseling, testing, early intervention, and pharmacy services as well as medical care, referrals, and research on HIV care and treatment. Gilead Sciences is a biopharmaceutical company that develops and commercializes medicines. Its primary areas of focus include human immunodeficiency virus (HIV) and liver diseases.

The complaint states that tenofovir is an antiviral drug that is used in the treatment of HIV/AIDS. In 1999, Gilead obtained a patent on a prodrug formulation of tenofovir, Tenofovir Alafenamide (TAF), that allowed for absorption of tenofovir when administered orally. Gilead also obtained patents on a similar prodrug called Tenofovir Disoproxil (TDF). In 2015, Gilead sold over $15 billion of HIV antiviral drugs in the United States with about 80 percent of those drugs incorporating a prodrug of tenofovir. The patents on TDF expire in 2017 and 2018. The impending expiration of the TDF patents presented a financial challenge to Gilead, since the company was heavily reliant on the patent exclusivity period to prevent entry by generic pharmaceutical manufacturers.

AHF claims that Gilead developed an anticompetitive scheme to extend its exclusivity on drugs incorporating tenofovir. First, despite presenting test tube and animal data on the use of TAF for ten years, Gilead did not conduct clinical trials on humans using TAF until 2011 in order to extend patent protection on tenofovir by six years. Second, Gilead has refused to make TAF available as a standalone drug, even though the company continues to make TDF available as a standalone drug under the brand name Viread. Third, Gilead entered into licensing agreements with Japan Tobacco and Emory University to develop and sell compound drugs that have the patent protection of the TAF patents.

According to the complaint, Gilead’s tactics have allowed the company to reap outsized profits. By maintaining exorbitant prices for antiviral drugs, Gilead’s scheme avoids competition and expending money on research and development of new drugs. Furthermore, the high prices of antiviral drugs have impacted the availability of these lifesaving drugs and limit patient access through higher co-pays, limitations on existing insurance, and rationing of the drugs. AHF has been harmed by Gilead’s scheme to paying inflated pricing for drugs containing TAF.

AHF asserts claims for conspiracy in restraint of trade and monopolization in violation of Sections 1 and 2 of the Sherman Act. The action seeks declaratory and injunctive relief, treble damages, costs of suit, attorney fees, and any other just and proper relief.

The case is No. 3:16-cv-00443-MEJ.

Attorneys: Dorian S. Berger and Daniel P. Hipskind (Olavi Dunne LLP) and Tom Myers, Arti L. Bhimani, and Liza M. Brereton for AIDS Healthcare Foundation, Inc.

Companies: AIDS Healthcare Foundation, Inc.; Gilead Sciences, Inc.; Japan Tobacco, Inc.; Emory University

News: Antitrust CaliforniaNews