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Ocasio-Cortez grills CEO of pharma company making billions on government-patented HIV drug

Daniel O’Day faced scathing questions over taxpayers funding research and development for blockbuster drug

Rep. Alexandria Ocasio-Cortez, D-N.Y., was among the Democrats on the House Oversight Committee grilling Gilead CEO Daniel O’Day on Thursday over the high price of the HIV prevention drug, Truvada. (Tom Williams/CQ Roll Call)
Rep. Alexandria Ocasio-Cortez, D-N.Y., was among the Democrats on the House Oversight Committee grilling Gilead CEO Daniel O’Day on Thursday over the high price of the HIV prevention drug, Truvada. (Tom Williams/CQ Roll Call)

Gilead CEO Daniel O’Day faced scathing questions at a House hearing Thursday, with Democrats demanding answers on how the drug manufacturer could charge $1,700 a month for an HIV prevention drug discovered through taxpayer-funded research.

“How can Gilead do this? How can our system allow a company to take a drug treatment that was developed with taxpayer funds and abuse its monopoly to charge such astronomical prices?” Oversight and Reform Chairman Elijah E. Cummings asked at the top of the hearing. “This lifesaving treatment would not exist but for the research funded by the CDC and the NIH.”

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The hearing came on the heels of an investigation by the PrEP4All Collaboration into the invention of Truvada for PrEP. The activist group found that the Centers for Disease Control and Prevention holds patents on the drug, since federal money funded the researchers who made the discovery.   

O’Day contradicted expert researchers on the panel and Democrats on the committee Thursday, downplaying the role of public funds in the discovery of the drug combination’s use for HIV prevention.

“Gilead invented Truvada,” O’Day said. “Prior to 1995, Gilead assisted in studies designed to assess the efficacy of tenofovir for PrEP. Gilead donated all of the drug used in these studies, collaborated in the study methodology design, provided dosing guidance, and participated in analysis of the study results.”

Pre-exposure prophylaxis, commonly known as PrEP, is when people at risk of being infected with HIV take a daily dose of medicine to minimize their risk of contracting the disease. Truvada is a combination of two HIV medicines — tenofovir and emtricitabine — and is sold by Gilead.

The patent findings by PrEP4All were first reported by The Washington Post in March.

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O’Day’s testimony Thursday was contradicted by Robert Grant, a professor of medicine at the University of California, San Francisco, whom government watchdog group Public Citizen calls “the father of PrEP.” Grant testified that he devoted 20 years of research to developing PrEP with grants from the U.S. government and nonprofits.

Grant said the pharmaceutical company had been a “reluctant partner” as he researched the use of Truvada to prevent HIV. The company “did not provide leadership, innovation or funding,” Grant said, even as it sought to block competing drugs from coming to market. 

That means that taxpayers have paid for PrEP twice: By funding the research and development, then paying escalating prices at the pharmacy counter and through public health programs such as Medicare and Medicaid, Rep. Alexandria Ocasio-Cortez said at the hearing.

“There’s no reason this should be $2,000 a month. People are dying because of it,” the New York Democrat said. “We developed this drug.”

Cummings thanked Ocasio-Cortez for “leading the charge” to compel the hearing, who in turn credited HIV/AIDS activists and a staffer for raising the issue.

O’Day maintained that the U.S. government’s patent on Truvada for PrEP is invalid, but he was met with criticism from fellow witnesses on the panel.

“Mr. O’Day, what justification do you have for charging $2,000 a month for Truvada as PrEP, when the American people funded the invention of the molecule, invented its use as PrEP and funded four clinical trials to prove its efficacy?” said Aaron Lord, a patient advocate with PrEP4All, who sat next to O’Day.

Rising cost

At issue is whether the those most at risk for contracting HIV — lower-income patients and patients of color — can afford the drug. The list price of Truvada in the U.S. is about $1,700 per month, O’Day testified. 

Revenues from Truvada have exceeded $36 billion, Cummings said at the hearing. 

Meanwhile, just 200,000 of the estimated 1.1 million Americans at risk of contracting HIV currently receive Truvada for PrEP, according to the company’s own estimates. 

Activists have turned up the pressure on the CDC to assert its own patent protections. Some activists have also called on the Department of Health and Human Services to revoke Gilead’s monopoly on PrEP by asserting march-in rights under the 1980 Bayh-Dole Act

House Oversight ranking member Jim Jordan called PrEP “something of a miracle drug,” and accused some of the panel’s Democrats and activists and researchers at the hearing of “demonizing” profit-seeking.

The Ohio Republican commended President Donald Trump for progress on HIV/AIDS treatment, citing Gilead’s announcement last week that it will donate 2.4 million bottles of Truvada to the CDC to treat lower-income patients. 

The company has also attempted to help offset the price of the drug for some lower-income patients with the use of coupons. But critics Thursday pointed out that coupons can actually drive up the cost of drugs in the long term.

PrEP4All activists panned the donation as an effort to dampen public outcry over the price. The group estimated it will cost the company $10 million, The New York Times reported

The head of Trump’s domestic policy staff, Joe Grogan, was hired to the White House from Gilead. Grogan was  previously the company’s top lobbyist

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