Gilead sanctions Indian generics production of HepC drug

Gilead Sciences will allow seven large Indian generic drug producers to make and sell its blockbuster hepatitis C drug Sovaldi in more than 90 developing countries, in a move it says will ensure affordable access to the potentially life-saving treatment.

The deal with companies including Cipla and Ranbaxy Laboratories follows months of fierce debate over the price of Sovaldi, which has been hailed as the biggest breakthrough in treatment for hepatitis C since the virus was discovered in 1989.

Sovaldi is on course to become the most successful new drug in industry history after generating $5.7 billion of sales in the first half of this year. But its high price – at $1,000 a day in the US – has drawn criticism from politicians, activists and insurers. California company Gilead said yesterday that it would introduce Sovaldi to the Indian market at a price of $300 per bottle, or about $900 for a 12-week course – about 1 per cent of the US price.

But Gilead also said seven generic manufacturers in India would be free to set their own prices for the drug – without any mandated floor price. The companies are to pay 7 per cent of their revenues in royalties to Gilead, which will provide full technology transfer to the Indian manufacturers, allowing them to produce both the active pharmaceutical ingredients and finished formulations.

Gregg Alton, executive vice-president of Gilead, said he believed the agreement would create a competitive marketplace that would help bring down the price and ensure widespread access.

“The purpose of these partnerships is to help us reach as many patients as possible, regardless of where they lie and regardless of how poor they may be,” Mr Alton said in New Delhi. “The competition and capabilities of these companies will bring down the price.”

Subhanu Saxena, chief executive of Cipla, said the deal showed that drugmakers had learnt the lessons of past controversy over pricing of HIV drugs. "The pharmaceutical industry is understanding the need for affordable access across the globe. Some companies have understood this better than others."

But activists from Médecins Sans Frontières, and others lobbying for improved access to life-saving medication, criticised Gilead for excluding key countries with high hepatitis C burdens, including China, Brazil and Ukraine, from the deal. That means Indian generic drugmakers will not be able to sell their less expensive medicines to those markets, unless any of those governments issues a compulsory licence overriding Gilead’s patent.

Mr Alton insisted that the drugs would be made available to patients in all emerging markets through Gilead’s own tiered-pricing system. “We’ll be having prices for countries like Thailand, Mexico and Brazil that are very different than the US price.”

MSF activists, who staged a protest at the hotel where the Gilead announcement was made, said even with the discount Sovaldi would still be more costly than many Indian patients could afford.

The other India-based generic drugmakers involved in the deal are Cadila Healthcare, Hetero Labs, Mylan Laboratories, Sequent Scientific and Strides Arcolab.

Copyright The Financial Times Limited 2014