The cost of PrEP

Sean Rameswaram: You are listening to the Today Explained podcast. Before I can begin, I must tell you about another podcast. It is called The Dream. It is not about that nightmare you had last night that you were stuck under a whale and nobody cared. It is not about the dream you have of one day whistling really loud with your two fingers like you're hailing a cab in New York City. It is about wellness, natural oils, healing crystals, detox juices, fuzzy exercise classes, magic little pills, all these things that are constantly being promoted by celebrities and people on the gram. These products, though, turns out they may not be rooted in truth, science, honest intentions, even. You can find out more on the podcast, The Dream. It is now playing in your favorite podcast app, The Dream.

There's a treatment called PrEP that you may or may not have heard of. All it is is one blue pill every day at a certain time. But PrEP is a life-or-death game-changer type of medical treatment for a very specific segment of the population. PrEP is a game-changer for gay men and men who have sex with other men and who have unprotected sex with other men.

Alex Abad-Santos: writes about culture and LGBTQ issues here at Vox. with gay men, especially in their relationship to sex, we've been told all this time that if you have sex, you have this risk of contracting this disease. And this disease is responsible for eliminating a whole entire generation of gay men that came before you and men who have sex with men. I think growing up as a kid in the 90s, and sex ed in the 90s, there was this panic that AIDS was going to kill you. And I could probably catch it. I'm probably going to die. and it would just completely change the way a generation of gay men thought about sex. And so every time I would go to the doctor for a blood test, for any kind of test, I would just be sweating bullets. And so I think that was kind of life before PrEP for me.

Post-PrEP, I think I'm still pretty cautious about all the precautions you've taken, more educated about how the disease spreads and whatnot. But I think you can sleep a little bit easier knowing that you have this precaution and protection that you can take every day. Who could find a problem with a treatment like that, right? How about Bernie Sanders and AOC? You cannot ask the question, how much will you pay to be alive? How much will you pay to live? Because the answer is everything. The answer is you will pay $10, you will pay $1,000, you will go into debt. You will do anything to live.

Shefali Lutra: I cover health care and health policy as it affects real people. For Kaiser Health News. This past week, activists involved with Prep for All, an advocacy group, charged that Gilead, the company behind the drug. Which is an American company? An American company, yes. One of the biggest pharmaceutical giants we have. They say they gamed the patent system and delayed bringing Descovy to market, delayed doing their research on it so that they could keep their monopoly on Truvada for longer and therefore charge higher prices for as long as they could. Which would make them tons of money? Billions per year.

Okay, so a lot of terms flying around here. Let's take a moment to make sure everyone's on board. We've got PrEP. PrEP is essentially a pill to prevent HIV. It's almost 100% effective. Before we had PrEP, right, if you're engaging in activity that could put you at risk, whether that's unprotected sex with someone whose status is unknown, sex with someone who has HIV, sharing IV-injected drugs. basically condoms are your best hope for sex. For drugs, it's hoping the person you're sharing needles with has clean needles or isn't infected. With PrEP, that changed things. You could take a pill, almost a three in four chance of preventing HIV from drugs, almost 100% from getting HIV through sexual transmission.

There are two different pills with different chemical formulations that can both achieve this PrEP regimen. They are Truvada and they are Descovi. So Truvada and Descovy are kind of like the Tylenol and aspirin of PrEP? Sure. If PrEP is painkiller and these are the branded products. Yeah, absolutely. And Gilead owns both of those. Gilead owns both of them. And how much does Gilead charge for these PrEP treatments, Truvada and Descovy? It's very cheap in other countries. And here it costs almost $2,000 a month. What does it cost for someone in Europe? or Australia or Canada or Asia. We do see in other countries it can cost as little as $6 a month. What? True of insulin, too. True of a lot of drugs that cost a lot here and cost pennies to produce and cost way less elsewhere. Really? It's a lot of money. $2,000?

Sean Rameswaram: There are two pills for PrEP. There's Truvada and there's Descovy. Truvada is slightly older. Descovy got designated for PrEP a couple months ago. Truvada will probably set you back... About a month Descovy about And these are both covered by insurance but that money still comes from somewhere And we seen how insurance covers pills change So you often have to pay a lot more out of pocket, your deductible before you get that benefit. So a lot more Americans are experiencing firsthand this increasingly high price of PrEP.

Which brings us back to Bernie and AOC being mad at Gilead. What are they asking for exactly? They are saying that the government should not extend the patent for Descovy, which is what Gilead is seeking right now, which is fairly common. If it takes longer to develop a drug, you get a longer patent. Patents are how we reward research and development for drugs in this country. These activists who have filed a complaint with the Patent and Trademark Office, now Senator Sanders, Representative Ocasio-Cortez, are all saying the patent extension should be denied. They say Gilead acted without transparency and in bad faith. They're also arguing that the government should step in and reissue the patent to other companies to license generic versions of the drug, bringing down the price.

Shefali Lutra: So Gilead is asking for a patent extension at the same time some very powerful politicians are accusing the drug manufacturer of gaming the system, delaying the whole patent process for these PrEP drugs. Tell me more about this patent. Sure. There are two patents in some ways at play. There was the right to the pill itself, and then the research that discovered that this pill could prevent HIV. Gilead had the rights to Truvada already. It was an HIV treatment pill. And then government-funded research helped determine that this drug could be used as a prevention. So the government, in theory has the patents to the idea of PrEP. Gilead has the rights to the pills itself, though. So Gilead has still been the only company manufacturing PrEP, and the government argues, activists argue, profiting off taxpayer-funded research while many Americans can't afford this drug and while HIV continues to be a public health concern.

Sean Rameswaram: So even while the government and activists make these arguments against Gilead for the time being this one company controls this treatment prep that has become a game changer in preventing HIV from spreading. Gilead has the patent on Truvada until 2021. Come 2021, we'll see generic entry. We'll see other companies manufacture competing versions of the pill that could bring down the price dramatically. We usually see that when we have multiple generics competing for a pill. That is, in fact, why many people argue Gilead is conveniently seeking an extended patent on Descovy, right? Descovy is arguably clinically superior to Truvada. It has fewer side effects around bones and kidneys, although both of these drugs are prevention pills. If Gilead loses its monopoly on Truvada but retains its patent on Descovy, if Descovy is the premier version of PrEP, that's a way for them to hold on to a large sector of this market.

Shefali Lutra: And what do they say to these claims that they're gaming the system? Gilead says they didn't do that. They say they value patient safety, that delaying development of a safer drug is not a thing that they did. And the law is kind of set up to protect them here? This is where things get complicated and really interesting. We do reward pharmaceutical companies for research and development of new drugs with patents. We give them monopolies for a limited time. That's meant to incentivize them. In a somewhat unprecedented step, the government is actually suing Gilead right now, arguing that they own the rights to these patents and that Gilead has blocked them from reissuing the technology to produce Truvada and, they say, Descovy as PrEP by holding on to the pills. That's a really big deal. And the question is now, first of all, how courts will find whether they'll say Gilead acted in bad faith, whether they need to hand over the patents or not.

Sean Rameswaram: And by the government here, you mean the Trump administration? Yeah, the Trump administration. Like not exactly the LGBTQ community's number one ally, I imagine most people would think. Last week, they announced a program in which if you are uninsured, you can qualify for free prep. Ready, set, prep is part of the president's goal to end the HIV epidemic by 2030. To be eligible, people must test negative for HIV, have a prescription for the medications, and have no prescription drug coverage. Which you'd think that would address the problem. There are some issues, though. This only affects you if you are uninsured or don't have a prescription drug benefit. The folks we talked about, the underinsured, right, they have these high deductible health plans. They have to pay a lot out of pocket before coverage kicks in. Unclear if they'll be affected.

Shefali Lutra: So if you don't have insurance, Gilead will give you PrEP for free. In theory, yeah. And these are actually fairly common approaches by pharmaceutical companies. It's kind of a band-aid, right? Because you get some good press. Some people get the drug. You don't lower the price. you're still charging it to a decent number of people. It's not really a systemic fix in the way that you would imagine.

Sean Rameswaram: The Trump administration is partnering with Gilead while suing Gilead? Yes. Wow. A lot of things can be true at the same time. A lot of things can be true. They're suing for patents. They claim that given the role the government played in developing PrEP specifically and discovering that Truvada and Nadescovy could be used as a preventive drug, they should be able to license it to other companies to get generics on the market. they say Gilead has blocked them from pursuing this Right now they asking for damages That great The question is where does the money go And the next question is does this lead to the price coming down Does the Trump administration take that next step by demanding Gilead bring down the price of the drug And what does the court say? Might that happen? That's a really great question.

Shefali Lutra: I talked to an expert about this yesterday, and he suggested that the publicity from this new complaint around Escovi, around whether Gilead sat on data for longer than it should have could renew pressure on the government to do something, to pursue a lower price. We are entering an election. Drug prices are a really big issue. This could be a really big win for an administration that says it wants to bring down drug prices but has been willing to do not as much as its rhetoric would suggest.

Sean Rameswaram: It sounds like what you're saying is that, like, people are really upset about something that was sort of designed and instituted by law. This is one of the really interesting things about our drug pricing system. And it's really easy to paint a story in which Gilead is this bad actor company and they did these things and they game the system. But what we're seeing is this is how our regulatory system is designed. It's fairly inflexible. It doesn't really regulate what drug companies can charge for drugs. It lets them charge what the market will bear. Any company with this technology in the regulatory space that exists, it's very easy to imagine them taking the same path.

Shefali Lutra: More in a minute. I'm Sean Rameswaram. This is Today Explained. Remember last week at this point in the show when I told you about a new podcast called In Bed with Nick and Megan? Well, guess what? Nick and Megan are still in bed. Nick is Nick Offerman. Megan is Megan Mullally. They are married people, as you might recall. They are married celebrities, even better. And they now have a podcast about being married celebrities in which they invite their famous funny friends to hang out in their bedroom with them. Maybe it's as fun as it sounds. Check it out, In Bed with Nick and Megan, now playing wherever you play your podcasts.

Back to our podcast now. Shevali, you alluded to this earlier, but this is not a Gilead problem. This is not a prep problem. This is a problem across the board in the United States for people that they can't get their drugs at the prices people are paying for them elsewhere. Absolutely. And the particulars of this case may be unique to Gilligan, right, when we have the charges of sitting on research that could have brought a good drug to market sooner. But broadly, this is a story of a country that hasn't really figured out a way to regulate drug prices to talk about paying what we can afford. Other countries have set up systems, are willing to make tradeoffs. And for all of our talk legislatively about controlling drug prices, for all of our talk about EpiPens and insulin and naloxone, drugs that are lifesaving that people need. I carry an EpiPen. We haven't been able to actually take policy action that's systematic and substantive to address this public health problem.

For people who don't know, I guess, tell me more about the problem. How much does an EpiPen cost if you don't have insurance? How much does insulin cost if you don't have insurance? Naloxone, I don't even know what that is. What does that one do and how much does it cost? Sure. So naloxone is actually one of the most important and controversial ones, you could argue. It's an opioid overdose reversal drug, essentially. Oh, got it. A naloxone injector can cost thousands of dollars. Insulin can also cost hundreds of dollars. We see countless Americans rationing their insulin because they can't afford it, whereas These drugs often cost pennies to produce and are available for far cheaper in other countries, in part because you charge what you can get away with, and you can get away with a lot here. And this is why it's created this sort of like black market for drugs imported from foreign countries in the United States, right? Yeah. I mean, we do hear stories, right, about Americans crossing the border to get their insulin. I know a lot of people personally who, when they travel to visit their extended family, will buy drugs there, right, and bring them back.

Shefali Lutra: So you mentioned that President Trump cares about this. Alexandria Ocasio-Cortez cares about this. These are people who are on polar ends of the political spectrum. Is anything being done? Excellent question. The House is weighing a bill right now that would bring down pharmaceutical prices ostensibly. Tell me about the bill. The bill would allow Medicare to negotiate for certain drug prices. It would penalize companies that charge more than a set amount for their drugs. It would invest more in research and development. The CBO has estimated it would save lots of money to us. It would reduce drug production marginally. That said, the bill, even if it gets out of the House, doesn't seem likely to move anywhere in the Senate, at least this year. The pharmaceutical industry is very powerful. And while everyone talks about bringing down drug prices because politically, the polling just shows it's a great issue. Republicans in particular haven't really shown an ability to take on the industry.

There a lot of talk about the free market and Medicare negotiating is arguably interfering with that free market Although that ignores the fact right that when we give drug companies short monopolies we already stepping into this market So there less agreement than I perhaps thought there was when I said you got AOC and Donald Trump agreeing on this. You have everyone saying they want the same things, but you have different willingness to do the policy that experts suggest would make a difference.

Shefali Lutra: So if the Democrats were able to pull something off in some hypothetical pie-in-the-sky situation where the Republicans didn't block it, what would it look like? This whole system has been set up so that drug manufacturers are rewarded in the United States for their work, for their research, with astronomical profits until the patent expires, right? How do they legally change this system? There is a decent bit of debate amongst Democrats, and there's been some back and forth amongst more progressives and more moderates. That said, there are some really interesting ideas that have been talked about as potential models for us. One that I think about a lot is actually the German drug pricing system. Whenever a new drug is approved, they have a board that assesses the value of the drug. The company can charge what it wants to for the first year it's on the market. But after that, the board decides what health plans are willing to pay for a said drug. The company can stay in the market or it can opt out. and that number that's set is based in part on how much new value does this drug provide. In theory, you would lose some drugs because the companies aren't willing to accept this lower price. In practice, that's happened very few times because Germany is a very, very large market. We are an even bigger market. So there is an argument, and many experts have suggested this should be looked at here, that if we set some sort of similar board, if we looked at new drugs and said, charge what you want in the beginning, but going forward, maybe at least Medicare will only pay a set amount based on whether this provides new value and how much value we see it having, that could really reshape what Medicare but also other plans are able to pay for a drug.

Shefali Lutra: So that's the German option. That's the German option. Any others? Another option involves looking at laws that are already on the books. One of those is the Bayh-Dole Act of 1980. Okay. B-A-Y-H hyphen D-O-L-E. Fair. Bay was an old senator. He's dead. And Dole is the Bob Dole? Yeah. The Bay-Dole Act of 1980 gave us this concept called march in rights. The idea is that if the government played a significant role in a drug's development and there's a health and safety emergency, the government can come in, take the patent for the drug, reissue it to generic competitors. This has never actually been used. Current administration, fairly opposed to it. Alex Azar, the HHS secretary, called it socialist. Wait, Donald Trump's head of HHS called something that Bob Dole did in like the 80s socialist? You know. Just be clear. Socialism is a weird, weird label that's applied in a lot of ways. Yeah.

Shefali Lutra: There is one other legal provision in which the government can reissue patents. And this actually gets very interesting. This is called Section 1498. When there's an emergency, you can again take the patent for a drug, reissue it to generic competitors. This one, 1498, used to be used a lot. It was memorably used in the Bush administration. Which Bush? George W. So this came up during the anthrax scare when ciprofloxan was really expensive and they threatened to invoke 1498 to license other companies to get generic competitors. Okay. So that ciprofloxan, the treatment for anthrax, would be cheaper. They didn't actually end up having to do that because the manufacturer lowered the price.

Shefali Lutra: So there is precedent in some ways for the government reissuing or threatening to reissue patents. But it is so far from where we are now. It is hard to imagine it happening, but it's an area where a lot of Democrats have said we can take existing laws and use them to go directly for the high prices that manufacturers are charging and bring them down. So you're saying the United States has laws on the books, these marching rights, that would allow these drugs, PrEP, Travada, Descovy, to be available to the masses for cheaper prices. But we're just not doing it because, what, this hasn't been designated a crisis? HIV, AIDS? In particular, they argued that price is not the health emergency, right? And that if there were other kinds of shortages or other concerns, then they would do it. It would be really interesting, and I was talking to a friend about this recently, if an administration tried to use merchant rights for PrEP, for Truvada, for Descovy, what would happen next? We can imagine the industry would file suit, would argue this doesn't represent what the law actually said. We have no precedent for this. we would see what comes out of what a court might say. But in the interim, this seems like a legally viable option at the very least that isn't considered for whatever reason.

Shefali Lutra: It sounds like what you're saying is like nothing's going to change until someone decides to just push this issue harder. The pharmaceutical industry is one of the most well-moneyed lobbies in Washington. They give a lot of money to politicians on both sides of the aisle. If someone is willing to walk away from all of that, and if multiple people are willing to walk away from that and challenge this industry directly, we might see more action. Thank you.