Gilead Sciences, Inc. (NASDAQ:GILD) has decided to raise prices across a portfolio of its older drugs. That comes after the company early this year performed its typical annual raises that pushed up prices of drugs by between 5% and 7%. But what does the latest price hikes mean?
First, the latest drug price increases appear to be a stark deviation from Gilead’s normal schedule of raising prices of its products. The company typically raises the price of its drugs at the beginning of the year and maintains them at that level throughout the year.
Affected brands
Gilead’s latest price hike affects two of the company’s older HIV drugs whose newer versions were recently launched. Those older medicines are Stribild and Complera, whose prices have now gone up 7%. As such, the new wholesale acquisition cost of Stribild has moved to $2,890 a month and that of Complera has shifted up to $2,508 a month. In January this year Gilead increased the prices of the drugs by a factor of 5% and 7%, respectively, as part of its standard annual price review.
Gilead recently launched a newer version of Stribild called Genvoya and a version of Complera called Odefsy. The newer HIV drugs are based on a compound called tenofovir alafenamide (TAF), which eliminates the side effects in the original drugs. The older drugs contain a compound called tenofovir disoproxil fumarate (TDF).
What is Gilead up to?
Gilead has not explained why it raised the prices of its older HIV drugs again after it did so in January. But it is believed that the company performed another round of price boost for its older drugs to try and transition patients and prescribers to the newer drugs. The logic behind that is that the newer HIV drugs have a longer patent protection period than the older ones. For instance, Genvoya and Odefsy are expected to enjoy marketing exclusivity until 2022 but Stribild and Complera are set to lose the patent protection in late 2017.
The other motivation for raising prices of the older drugs is thought to be a desire by Gilead to squeeze the most value out of its aging products before generic competition catches up and dilutes sales.
