Gilead to Sell Powerful HIV Drug to Poor Nations at Steep Discount

Drug maker Gilead Sciences Inc. today will announce plans to sell its top HIV drug to 68 poor nations at cost, or about one-tenth of its usual price, in a move applauded by AIDS activists.

Other drug companies have offered similar low-cost AIDS drug programs. But Charles Farthing, chief of medicine for the AIDS Healthcare Foundation, applauded Gilead’s plan because Viread is a relatively new AIDS drug that can also be used to treat hepatitis B.

“It’s a phenomenally good drug that will make treatment in the Third World easier because it is potent and relatively free of side effects,” said Farthing.

Gilead, based in Foster City, will sell Viread throughout Africa, and to various Third World countries elsewhere, for $468 a year per patient, which covers manufacturing and distribution costs, rather than the $4,320 charged in the U.S. Viread, approved by the FDA in 2001, generated $225.8 million in sales last year. Given in pill form, it’s in a class of drugs that work by preventing the HIV virus from altering the genetic material of healthy T-cells.

Many other drug manufacturers have either greatly reduced the price of their AIDS drugs for African nations, or sell them at cost, Farthing noted. But affordability remains a staggering problem, especially in sub-Saharan Africa, which accounts for about 30 million of an estimated 42 million HIV victims worldwide.

“Paying $468 a year for one drug like Viread is still a lot for a Third World country,” said Farthing.

Viread also must be used in a combination with at least two other HIV drugs, most commonly with GlaxoSmithKline’s medication Epivir and Sustiva, sold by Bristol-Myers Squibb. On Thursday GlaxoSmithKline said Epivir is already offered at a discounted price in Africa; while Bristol-Meyers could not be reached for comment.

However, there are three similar HIV drug cocktail versions already available in generic form that cost less than Viread alone, even at its reduced price, analysts said.

But Gilead’s drug has several advantages, doctors say, including that HIV patients need to add only one additional pill a day to an often staggering daily treatment regimen.

“We feel that this drug really should be used by the majority of AIDS patients in the world and it’s our goal to make that happen,” said Gilead senior vice president John Milligan.

One concern drug companies have when offering discounts is that their products will not reach patients in poor countries, but will get diverted to more affluent nations. To minimize the problem of resales of the drug, Milligan said Gilead will change the color of pills manufactured for this program.

Analysts expect Viread’s sales, which helped Gilead turn profitable in 2001, to double this year to $475 million.

On Thursday Gilead’s stock hit a 52-week high of $45.70 on Nasdaq, before closing at $44.58, up 91 cents.