AHF: Gilead`s Record 76% Profit Margin Squeezes Taxpayer-Funded AIDS Programs

Thu Jan 17, 2013 6:49pm EST

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Gilead Sciences (GILD), makers of Stribild - the most expensive first line
combination AIDS therapy on the market today at $28,500 per patient, per year -
has outpaced industry averages in revenue growth and gross profit margin by
gouging the prices of combination AIDS therapy treatments that are paid for by
government programs

Exploitation of Medicare, Medicaid, and other programs drives up healthcare
costs and keeps patients out of care - as patents on several Gilead drugs are
set to expire and the company hiked the prices of four HIV/AIDS medications by
an average of 6% on Jan. 1, AIDS Healthcare Foundation (AHF) reaffirms its
demand that Gilead lower its drug prices
WASHINGTON--(Business Wire)--
According to a stock buy recommendation from New York-based stock analyst group
TheStreet Ratings released this week, pharmaceutical giant Gilead Sciences
(GILD) shows first quarter earning increases compared to this time last year
across the board that exceed industry averages by a large margin. Leading global
nonprofit AIDS Healthcare Foundation (AHF) contends these record earnings come
at the expense of patients who cannot access treatment for HIV/AIDS due to
Gilead`s price gouging. 

TheStreet reported Gilead`s closing stock price has jumped 76.13% compared to
its closing price one year ago, and the group expects the price to rise even
higher. Additionally, the group said Gilead`s gross profit margin is "currently
very high" at 76.90%, another increase from the same quarter last year.
Additionally, the company`s net profit margin of 27.83% exceeds industry
averages. Gilead`s revenue growth was up 14.4% from this time last year and
again outpaces the industry average growth of 5.4%. 

"AHF has repeatedly criticized Gilead and its CEO John Martin - whose income
last year was $54 million - for price gouging on its HIV/AIDS treatments, an
action that places the drugs out of reach for many patients due to increases in
healthcare costs trickling down to government programs and insurers such as
Medicare and Medicaid as well as private insurers and programs like the AIDS
Drug Assistance Program," said Michael Weinstein, President of AIDS Healthcare
Foundation. 

Stribild, Gilead`s four-in-one combination pill that was approved by the Food
and Drug Administration in early September of last year, is the most expensive
AIDS first line treatment on the market today at $28,500 per patient, per year,
which was 35% higher than the price of their best-selling treatment at that time
and is more than most HIV/AIDS patients earn annually. 

Already this year, on January 1, Gilead raised the prices of four key AIDS
medications by an average of 6%, including the price of Atripla, its
best-selling three-in-one combination treatment, the price of which was
increased by 6.9% to a Whole Acquisition Cost (WAC) of $1,878.23 per patient,
per month. The other three HIV/AIDS medications that saw price hikes are
Complera, which was raised by 5.8% to a WAC of $1,936.53; Emtriva, by 5.5% to a
WAC of $478.45; and Viread, by 6% to a WAC of $771.39. 

A new study released this week in the Annals of Internal Medicine compared the
potential economic savings of using generic antiretroviral treatment instead of
branded medication like Atripla to the possible reduction in drug efficacy,
caused largely by the increase in pill burden that threatens to knock patients
off their medical regimen with missed doses. 

Though the study found the increased pill burden - requiring patients to take
two or three pills daily instead of the all-in-one combinations sold by Gilead -
could lead to a potential loss of 4.4 months of life per patient per lifetime,
the projected economic savings exceeded a billion dollars in annual healthcare
costs. The more affordable generic treatment options are the same medications
that have been keeping people living with HIV/AIDS alive in Africa and
developing countries like India for decades, as pointed out by AHF President
Michael Weinstein in a press statement earlier this week. 

"The savings could be as much as one billion dollars per year here in the United
States, while the efficacy decreased relatively slightly when using generics,"
Weinstein said. "Now that Gilead`s patents on many key drugs are expiring, the
company must lower its prices of drugs like Atripla, Stribild-a four-in-one
combination that actually relies on several older Gilead drugs that were
otherwise approaching end of patent. In addition, we strongly believe that
local, state, and federal governments should use every tool at their disposal to
bring down drug prices. As tax dollars ultimately pay for most of these drugs,
we extend our call on Gilead for price concessions on these AIDS drugs." 

About AIDS Healthcare Foundation

AIDS Healthcare Foundation (AHF), the largest global AIDS organization,
currently provides medical care and/or services to more than 183,000 individuals
in 28 countries worldwide in the US, Africa, Latin America/Caribbean, the
Asia/Pacific Region and Eastern Europe. To learn more about AHF, please visit
our website: www.aidshealth.org, find us on Facebook:
www.facebook.com/aidshealth and follow us on Twitter: @aidshealthcare.

AIDS Healthcare Foundation
Ged Kenslea, +1-323-308-1833
mobile: 323-791-5526
ged.kenslea@aidshealth.org
or
Kyveli Diener, +1-323-308-1821, ext. 1805
mobile: 310-779-4796
kyveli.diener@aidshealth.org

Copyright Business Wire 2013

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