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Could a Pharma Company Be Liable for Stalling Development of HIV Drugs?

By Vaidehi Mehta, Esq. | Last updated on

Worry over the AIDS epidemic might have peaked in the 80s and 90s, but it remains a serious global health crisis that continues to plague the world. A staggering 40 million people have already died from the disease, and about the same number of people are currently living with it. Luckily, effective antiretroviral treatments have been developed and rolled out to enough of the world such that three-quarters of today's HIV/AIDS population is receiving these lifesaving drugs.

The California-based biopharmaceutical company Gilead Sciences is known – and was once celebrated – for developing the compounds behind many HIV-fighting treatments. But in recent years, a litany of lawsuits against the company has called its business practices into question. Currently, courts in California are deciding the outcome of numerous class action lawsuits against the company related to its drug patents. The outcome of these decisions could shape much more than the future of one drug company – it could have a sweeping effect on tort law and the future of pharmaceutical innovation.

A Tale of Two Tenofovirs

The tension lies between two drug patents developed to combat HIV: tenofovir disoproxil fumarate (TDF) in Truvada and tenofovir alafenamide (TAF). As their generic names imply, both versions of the HIV medication contain tenofovir, which is an active ingredient innovated by Gilead. Tenofovir doesn't cure HIV/AIDS, but it does treat it effectively. By inhibiting the replication of HIV in an infected person, it reduces the viral load in the bloodstream, increases white blood cell counts, and helps the immune system from taking the big hit that normally comes with the disease. As a result, HIV patients see a much slower progression of the infection and a reduced risk of transmission. Tenofovir is also useful in avoiding HIV in the first place, and also helps manage hepatitis B.

Gilead developed TDF first. After years of research and development in the 80s and 90s, it was FDA-approved in 2001. The company marketed TDF as a single-ingredient drug under the brand Viread, as well as several brands of drugs that contained TDF in combination with other components. It had an exclusive patent to sell the compound until 2017 (drug patents typically last 20 years from the date of filing). But most drugs aren't perfect, and TDF certainly comes with some serious side effects; most notably, TDF can cause major damage to kidneys and bones.

Gilead continued research into tenofovir products. Soon after TDF entered the market as Viread, Gilead discovered its cousin, TAF. TAF is less likely to cause kidney and bone damage. On the other hand, it's more likely than TDF to increase cholesterol and weight. It was only around 2016 that TAF was finally patented, FDA approved, and released into the consumer market under the brand Vemlidy – but Gilead allegedly discovered it many years before, and sat on the discovery.

But why do that? Because patents. Patents are the linchpin of Big Pharma, among other companies that innovate. Because drug companies have to spend a lot of time and money on the research and development of new pharmaceuticals, they want to make sure it's worth their while. Patents allow them to get an ROI on R&D by letting them have the monopoly on a drug before competitors can legally sell a generic version. By delaying the patenting and release of TAF while TDF's patent still had many years to live, Gilead could maximize the combined lifespan of its tenofovir patents.

Patients Lose Patience With Patents

For a while, HIV patients seemed to be celebrating the arrival of the rather effective tenofovir. Even if it came with side effects, it was still working well to tamp down the effects of a virus that had long been resistant to treatment. But when word got out that Gilead had known about TAF for years without releasing it, consumer groups got suspicious as to the company's motives.

When they started acting on their suspicions, lawsuits led to investigations into Gilead's internal communications. What turned up wasn't pretty: internal emails and memos showed executives in the company weighing the best strategy for releasing TAF. The evidence was pretty incriminating. Gilead was accused of embarking on what the American Association for Justice called a "deliberate campaign to squeeze every possible cent out of selling a drug it knew had dangerous side effects while deliberately choosing to hold back a new drug that it knew worked as well, but which had substantially fewer side effects."

Product Defect or Defective Prospects?

The question here is not about the morality of what Gilead did; the evidence is pretty damning on that front. But in terms of their legal obligation, did they do anything wrong? It's important to note here that lawsuits are not usually about who was morally right. With limited exceptions, our legal system more or less only goes by what the law is. You might argue that this is unfair and that people ended up worse off because Gilead decided to delay rolling out TAF. Unfortunately for consumers, this doesn't mean that those corporations can be held legally accountable.

Various class action plaintiffs brought suit under different legal theories, but the main controversy is over product liability. The plaintiffs aren't alleging that there was any defect in the drug or failure of the company to warn of its side effects, which are traditionally necessary to bring such a claim. Under current tort law precedent, Gilead didn't do anything illegal – and the plaintiffs seem to recognize that. Instead, the plaintiffs are asking the court to expand current product liability theory to find that Gilead had a duty to not delay the development of TAF, and that by intentionally slowing its roll-out, it breached its duty to consumers.

So, there is no defect in the product; is the defect in the plaintiff's argument? Many fear major repercussions for innovation if courts agree with the plaintiff's theory and allow the expansion of tort law this way. The U.S. Chamber of Commerce has argued that many industries – not just pharmaceuticals – would be greatly harmed by a ruling that found in the plaintiff's favor. " A duty to develop the safest products possible is a duty that seems to have no logical limit or predictable stopping point," it said in its amicus brief.

Gilead has already agreed to a $246.75 million settlement offer over a lawsuit alleging anticompetitive practices. After first covering administrative expenses, court fees, costs, and attorneys' fees, the remaining amount in the settlement would be distributed among anyone who can prove that they belong to the class of people who purchased these drugs. A hearing to approve the settlement is scheduled for September 21. Whether or not the case settles or the courts keep it in their hands, the outcome could be significant for the future of pharma.

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