Gilead Sciences

Sofosbuvir was discovered by Pharmasset scientist Michael J. Sofia and developed with Pharmasset's capital. In January 2012, Gilead Sciences acquired Pharmasset for approximately $11 billion. In December 2013, Gilead launched sofosbuvir as Sovaldi at $1,000 per pill — $84,000 for a 12-week course. Gilead did not discover this drug. It acquired it, then decided what to charge for it.

• —Pharmasset scientists discovered sofosbuvir in 2007; GS-7977 entered clinical trials before the acquisition.
• —Gilead paid $11 billion for Pharmasset — its only meaningful asset was sofosbuvir.
• —Sovaldi launched December 2013: $1,000/pill, $84,000 for a standard 12-week treatment course.
• —Sovaldi was approved by the FDA and achieves cure rates above 90% across hepatitis C genotypes.
• —Harvoni (sofosbuvir + ledipasvir) followed in October 2014 at $94,500 for 12 weeks. Cure rate: 94–99%.

Source:Wikipedia — Sofosbuvir; Wikipedia — Gilead Sciences

An 18-month bipartisan Senate Finance Committee investigation by Senators Ron Wyden (D-OR) and Chuck Grassley (R-IA) reviewed Gilead's internal pricing documents and communications. The investigation found that Gilead considered prices ranging from $50,000 to $115,000 per course, that pricing decisions weighed expected revenue against "activist and public relations blowback," and that there was minimal consideration of research costs — because the research had been done by Pharmasset.

• —Senators Wyden and Grassley launched the investigation in July 2014 after Sovaldi's pricing sparked national debate.
• —Internal Gilead documents showed price modeling across a $50,000–$115,000 range per treatment course.
• —Communications showed Gilead executives weighing "public relations blowback" — not access or health outcomes — against revenue targets.
• —The report found Gilead's pricing strategy was "driven primarily by revenue" rather than research recovery.
• —The investigation was bipartisan — Wyden (Democrat) and Grassley (Republican) both signed the final report.
• —Gilead was not charged with any crime. The investigation was purely investigative.

Source:Senate Finance Committee — The Price of Sovaldi and Its Impact on the U.S. Health Care System (2015)

Gilead licensed sofosbuvir to generic manufacturers in India and other countries, resulting in prices as low as $300 per treatment course — 1% of the US price for an identical molecule. Egypt negotiated a $900 per-course price, provided to patients free. Gilead made the molecule; it chose the US price. The cost of manufacturing had nothing to do with the $84,000 figure.

• —United States: $1,000/pill, $84,000/course (2013 launch price).
• —Egypt: ~$900/course to government; provided free to Egyptian patients.
• —India: ~$300/course via licensed generic manufacturers.
• —Japan: ~$300/course with 99% government coverage.
• —India generic price per pill: ~$4.29 vs. $1,000 in the US — a 23,000% markup for the same molecule.
• —Gilead authorized the differential pricing — it was a deliberate strategy, not a market accident.
• —At India generic prices, the entire US hepatitis C burden could have been treated for under $1 billion.

Source:Wikipedia — Sofosbuvir (pricing section); WHO essential medicines documentation

Because of Sovaldi's pricing, Medicaid programs across the United States could not afford to treat all eligible patients. States including Louisiana imposed restrictions requiring patients to have advanced liver disease (cirrhosis Stage 3 or 4) before qualifying for treatment. Patients with earlier-stage hepatitis C — who could be cured outright before damage progressed — were denied treatment and told to wait. Some waited until they were sicker. Some died in the interval. Gilead's pricing made this rationing necessary. Rationing a cure for a fatal disease is a moral crime. It was also perfectly legal.

• —Louisiana, among other states, restricted Medicaid Sovaldi coverage to patients with advanced liver fibrosis (Stage F3/F4) — to limit budget impact.
• —Patients with Stage F1/F2 disease — curable with Sovaldi — were denied coverage pending deterioration.
• —The Veterans Administration reported budget constraints mid-year from Sovaldi costs, forcing rationing.
• —Hepatitis C was the leading infectious disease cause of death in the US by 2014, having overtaken HIV/AIDS.
• —Approximately 15,800 Americans died from hepatitis C-related causes in 2008 (CDC). Deaths continued as access was rationed.
• —Gilead's internal price modeling explicitly weighed lower prices — they were rejected for revenue reasons.
• —(Editorial): Gilead knew hepatitis C was killing Americans. They had the cure. They chose the price.

Source:Wikipedia — Sofosbuvir (access section); CDC hepatitis C surveillance data

Sovaldi's first full year of sales generated approximately $10.3 billion in global revenue. Harvoni followed with approximately $13.8 billion in its first full year (2015). At peak, Gilead's hepatitis C franchise generated over $19 billion in a single year. Revenue declined sharply by 2017 as the eligible patient population shrank and pricing pressure increased. The magnitude of these revenues — extracted from a healthcare system that simultaneously rationed access to the drug — illustrates the asymmetry at the center of the case.

• —Sovaldi: ~$10.3 billion in global revenue in 2014 (first full year) — largest new drug launch by annual revenue to that date.
• —Harvoni: ~$13.8 billion in global revenue in 2015 (first full year).
• —Gilead's hepatitis C franchise peaked at over $19 billion in annual revenue in 2015.
• —Revenue declined dramatically by 2017 as the treatable patient pool (those who could afford or access treatment) was largely exhausted.
• —Gilead's total market capitalization grew from roughly $30 billion before Sovaldi to over $150 billion at peak.

Source:Wikipedia — Gilead Sciences (revenue section); SEC 10-K filings

Every element of what Gilead did was legal. US patent law gave Gilead a monopoly on sofosbuvir in the US market. US drug-pricing law — unlike every other wealthy country — contains no mechanism for the government to negotiate drug prices for Medicare (the Inflation Reduction Act created limited exceptions in 2022, not retroactive). Gilead lobbied against drug pricing reform, as did the pharmaceutical industry broadly. People died of hepatitis C who could have been cured by a drug that cost $300 to manufacture a generic version of. The legal system has adjudicated none of this because none of it was illegal. Whether it was criminal is our editorial judgment. The public record is the evidence we offer.

• —The US government has no statutory authority to negotiate Medicare drug prices for most drugs — a gap the pharmaceutical industry lobbied to create and maintain.
• —US patent law grants 20-year monopolies. Gilead held US patents on sofosbuvir preventing generic competition for over a decade.
• —PhRMA (the pharmaceutical lobby) spent approximately $280 million lobbying Congress in the 2013–2015 period — among the largest lobbying spends of any sector.
• —The Inflation Reduction Act (2022) created limited Medicare drug price negotiation authority for a small number of high-cost drugs. Not retroactive.
• —No Gilead executive has been charged with any crime related to Sovaldi pricing.
• —John C. Martin, CEO of Gilead during the Sovaldi launch, received total compensation of approximately $180 million during his tenure.
• —(Editorial): The legal system permitted this. That is not an acquittal. It is an indictment of the legal system.

Source:OpenSecrets — pharmaceutical lobbying data; Senate Finance Committee report (2015)