Drug makers sign pact with Gilead for cheaper Hepatitis-C drug

The generic drug manufacturing firms will be free to price their products but will have to pay a royalty of 7% on sales to Gilead

Seven India-based drug makers – Cipla, Ranbaxy, Mylan, Strides Arcolab, Hetero, Cadila Healthcare and Sequent Scientific — have signed a licensing agreement with Gilead, a multinational drug company, which allows the generic drug makers to manufacture and sell low-priced versions of two new Hepatitis-C products in 91 countries.

Under the agreement, the generic drug manufacturing firms will be free to price their products but will have to pay a royalty of seven per cent on sales to Gilead. The two products are sofosbuvir and its next-generation version which would combine it with the experimental therapy ledipasvir. The second one is currently in the investigation stage.

Gilead also plans to launch sofosbuvir in India under its own branded Sovaldi and price it at $300 a month. The drug, usually prescribed for either three or six months, costs $84,000 for a 12-week course in America.  Under the licensing agreements, the domestic companies will also receive a complete technology transfer for Gilead’s manufacturing process. The 91 countries where the generic versions of Gilead’s drugs will be sold are 54 middle-income and 37 low-middle income countries.

“We need to have enough companies to have a competitive marketplace,” Gregg Alton, Gilead’s executive vice-president, corporate and medical affairs said, while announcing the agreement.

Public health groups and activists were critical of the deal, saying it raised concerns about access of the drug to several countries.

"Gilead's licensing terms fall far short of ensuring widespread affordable access to these new drugs in middle-income countries, where over 70 percent of people with Hepatitis-C live today. Gilead's deal excludes many middle-income countries considered by industry to be profitable emerging markets," said Rohit Malpani, director of policy and analysis, Medecins Sans Frontieres- Access Campaign.

The critics have also questioned the agreements by generic drug makers because there are no patents on sofosbuvir in India and several other countries. Instead, in various countries, including in India, Gilead is facing pre-grant opposition for its product.