In 2004, Gilead Sciences decided to stop treating a new HIV drug. The public explanation was that it was not sufficiently different from an existing treatment to warrant further development.

Privately, however, something else was at play. Gilead had came up with a plan delaying the release of the new drug to maximize profits, even though executives had reason to believe it could prove safer for patients, according to a trove of internal documents released in a lawsuit against the company.

Gilead, one of the world’s largest drugmakers, appeared to embrace a well-worn industry tactic: gaming the US patent system to protect lucrative monopolies on best-selling drugs.

At the time, Gilead already had a pair of blockbuster HIV treatments, both of which were backed by a version of a drug called tenofovir. The first of those treatments was set to lose patent protection in 2017, at which point competitors would be free to introduce cheaper alternatives.

The promising drug, then in the early stages of testing, was an updated version of tenofovir. Gilead executives knew it had the potential to be less toxic to patients’ kidneys and bones than the earlier iteration, according to internal memos unearthed by lawyers who are suing Gilead on behalf of patients.

Despite these potential advantages, executives concluded that the new version risked competing with the company’s existing, patent-protected formulation. If they delayed the release of the new product until shortly before the existing patents expired, the company could substantially increase the length of time that at least one of its HIV treatments remained protected by patents.

The “patent extension strategy,” as the Gilead documents repeatedly called it, would allow the company to keep prices high for its tenofovir-based drugs. Gilead could switch patients to its new drug just before cheap generics hit the market. Putting tenofovir on a path to remain a money-making juggernaut for decades, the strategy may have been worth billions of dollars.

Gilead ended up introducing a version of the new treatment in 2015, nearly a decade after it might have become available had the company not paused development in 2004. Its patents are now being extended. until at least 2031.

The delayed release of the new treatment is now the subject of state and federal lawsuits in which some 26,000 patients who took Gilead’s older HIV drugs claim the company unnecessarily exposed them to kidney and bone problems.

In court filings, Gilead’s lawyers said the allegations were without merit. They denied that the company halted the development of the drug to increase profits. They cited a 2004 internal memo that estimated Gilead could increase its revenue by $1 billion over six years if it released the new version in 2008.

“If Gilead was motivated by profit alone, as plaintiffs claim, the logical decision would have been to accelerate” the development of the new version, the lawyers wrote.

Gilead’s general counsel, Deborah Telman, said in a statement that the company’s research and development decisions have always been and continue to be guided by our focus on providing safe and effective medicines for the people who prescribe and use them.

Today, a generation of expensive Gilead drugs containing the new iteration of tenofovir accounts for half the market for HIV treatment and prevention, according to IQVIA, an industry data provider. One widely used product, Descovy, has a sticker price of $26,000 annually. Generic versions of its predecessor, Truvada, whose patents have expired, now cost less than $400 a year.

If Gilead had moved forward with its development of the updated iteration of the drug back in 2004, its patents would have either expired already or soon would have.

“We should all take a step back and ask: How did we allow this to happen?” said James Krellenstein, a longtime AIDS activist who advised lawyers to sue Gilead. He added, “This is what happens when a company deliberately delays the development of an HIV drug for monopoly purposes.”

Gilead’s apparent maneuver with tenofovir is so common in the pharmaceutical industry that it has a name: product hopping. Companies ride out their monopoly on a drug and then, shortly before the arrival of generic competition, they switch—or “jump”—patients to a more recently patented version of the drug to extend the monopoly.

Drugmaker Merck, for example, is developing a version of its best-selling cancer drug Keytruda that can be injected under the skin and is likely to extend the company’s revenue streams for years after the infused version of the drug faces its first competition from other companies in 2028. (Julie Cunningham, a spokeswoman for Merck, denied that it has a new target in a new product level. for patients and their families.”)

Christopher Morten, an expert on pharmaceutical patent law at Columbia University, said the Gilead case shows how the U.S. patent system creates incentives for companies to slow down innovation.

“There is something profoundly wrong that has happened here,” said Mr. Morten, who provides pro bono legal services to an HIV advocacy group that in 2019. unsuccessfully challenged Gilead’s efforts to extend the life of its patents. “The patent system actually encouraged Gilead to delay the development and launch of a new product.”

David Swisher, who lives in Central Florida, is one of the plaintiffs suing Gilead in federal court. He took Truvada for 12 years, starting in 2004, and developed kidney disease and osteoporosis. Four years ago, when he was 62, he said, his doctor told him he had “the bones of a 90-year-old woman.”

It wasn’t until 2016, when Descovy was finally on the market, that Mr. Swisher switched off Truvada, which he believed was harming him. By that time, he said, he had become too ill to work and retired from his job as an airline operations manager.

“I feel like all that time was taken away from me,” he said.

First synthesized in the 1980s by researchers in what was then Czechoslovakia, tenofovir was the springboard for Gilead’s dominance in the HIV treatment and prevention market.

In 2001, the Food and Drug Administration for the first time approved a product containing Gilead’s first iteration of tenofovir. Four more would follow. The drugs prevent the reproduction of HIV, the virus that causes AIDS.

These became game changers in the fight against AIDS, credited with saving millions of lives worldwide. The drugs were used not only as a treatment, but also as a prophylaxis for those at risk of infection.

But a small percentage of patients who took the drug to treat HIV developed kidney and bone problems. It proved particularly risky when combined with performance-enhancing drugs to enhance its effectiveness – a practice that was once common but has since disappeared. The World Health Organization and the United States National Institutes of Health discourage the use of the original version of tenofovir in people with brittle bones or kidney disease.

The newer version does not cause these problems, but it can cause weight gain and elevated cholesterol. For most people, experts say, the two drugs based on tenofovir – the first known as TDFthe second called TAF — offer approximately equal risks and benefits.

Internal company records from the early 2000s show that Gilead executives sometimes wrestled with whether to rush the new formulation to market. At some points, the documents cast the two iterations of tenofovir as similar from a safety standpoint.

But other notes indicate that the company believed the updated formula was less toxic, based on studies in laboratories and on animals. Those studies showed that the newer formulation had two advantages that could reduce side effects. It was much better than the original at delivering tenofovir to its target cells, meaning much less of it leaked into the bloodstream, where it could travel to kidneys and bones. And it could be given at a lower dose.

The new version “may translate into a better side-effect profile and less drug-related toxicity,” read an internal memo in 2002.

That same year, the first human clinical trial of the newer version began. A Gilead employee mapped out a development timeline that would have brought the newer formulation to market in 2006.

But in 2003, Gilead executives backtracked on rushing it forward. They worried that doing so would “ultimately cannibalize” the growing market for the older version of tenofovir, according to minutes of an internal meeting. Gilead’s head of research at the time, Norbert Bischofberger, instructed company analysts to explore the new formulation’s potential as an intellectual property “extension strategy,” according to an email from a colleague.

That analysis resulted in a Note from September 2003 that described how Gilead would develop the newer formulation to “replace” the original, with development “timed such that it is launched in 2015.” At best, company analysts calculated, their strategy would generate more than $1 billion in annual profits between 2018 and 2020.

Gilead moved to revive the newer formulation in 2010, putting it on track for its 2015 release. John Milligan, Gilead’s chairman and future chief executive, told investors it would be a “kinder, milder version” of tenofovir.

After winning regulatory approvals, the company began a successful marketing campaign, aimed at doctors that promoted its new iteration as safer for kidneys and bones than the original.

By 2021, according to Ipsos, a market research firm, nearly half a million HIV patients in the United States were taking Gilead products containing the new version of tenofovir.

Susan C. Beachy contributed research.

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