Humanitarian Organizations Challenge Gilead Sciences, Inc. (NASDAQ:GILD) Sovaldi Patent

Humanitarian Organizations Challenge Gilead Sciences, Inc. (NASDAQ:GILD) Sovaldi Patent

Medecins du Monde and Medecins Sans Frontieres have challenged a European patent that was issued to Sovaldi, a drug developed by Gilead Sciences, Inc. (NASDAQ:GILD) to treat Hepatitis C arguing that the science employed to come up with the therapy is not unique. The challenge is now before Europe’s patent office.

Medecins du Monde and Medecins Sans Frontieres have said that the prohibitive cost of the drug was blocking access to patients who needed the Hepatitis C therapy. Consequently, as a result of the prohibitive prices, governments are forced to ration or deny access.

Precedent set

Already, Solvadi patents have been revoked in countries such as Ukraine and China as disputes of the same nature rage in other countries. If the challenge is ruled in the favor of Medecins du Monde and Medecins Sans Frontieres, Sovaldi generic versions that are cheaper would be allowed in the market before even Gilead’s patent can expire.

In October last year, the European Patent Office annulled some part of the Solvadi patent that Gilead holds and this raised concerns that the treatment’s generic version could be introduced in the market 48 months earlier in 2024 as opposed to 2028.

Flagging sales

If the challenge succeeds, this would only compound problems for Gilead since the company has been facing slowing sales in the recent past from the treatments it manufactures for treating Hepatitis C. Besides Sovaldi, the pharmaceutical firm also makes Epclusa and Harvoni. After 2017, the revenues from these three drugs are expected to decline to a figure of about $2.5 billion. Three years later, revenues will only be $1.7 billion.

Last year, Sovaldi’s total worldwide revenue was $4 billion which was a decline from 2015’s 5.28 billion. Revenues generated by Sovaldi in Europe in 2016 were $891 million which was a decline of approximately 45% from 1.6 billion in 2015.

Besides fierce competition from multiple other drugs, Sovaldi is also having to fork out to payers bigger rebates in order to get favorable coverage from them.

On Monday shares of Gilead Sciences Inc fell by 0.01% to close the day at $67.50.