Gilead’s closed-door deal sets precedent for COVID-19 drug access

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Gilead Sciences headquarters in Oceanside, California, United States. Photo by: Mike Blake / Reuters

NAIROBI — Amid global conversations to ensure equitable access to future drugs and vaccines for COVID-19, Gilead Sciences, Inc. made its own side room deal.

Over the past month, the U.S.-based company made an agreement with generic pharmaceutical companies in Egypt, India, and Pakistan to allow them to produce its drug remdesivir, an injectable antiviral medication, and currently the most promising drug for the treatment of the coronavirus. The deal allows these generic manufacturers to distribute the drug in 127 countries.

Remdesivir is currently under investigation as a treatment for COVID-19, but has already shown the ability to reduce hospital visits from 15 to 11 days. Authorities have cleared the drug for emergency use in severe cases in the U.S., India, and South Korea.

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The deal allows Gilead to transfer knowledge to chosen companies in the three countries so that they can begin producing the drug, but it excludes over 70 countries, who will then be dependent on Gilead’s prices and supply or will have to work to overcome the company’s patent.

And even for countries included in the deal, access is not guaranteed. With little disclosed about these agreements, countries included in the deal might have delayed, or limited access to the drug, according to advocates of greater access to the drug.

“If more data shows that remdesivir is actually working … every country's access would be dependent on Gilead's business plan, which is very problematic in the situation of a pandemic,” said Yuanqiong Hu, senior legal and policy adviser at Médecins Sans Frontières' Access Campaign.

“They made their own deal.”

— Yuanqiong Hu, senior legal and policy adviser, Médecins Sans Frontières' Access Campaign

Lack of transparency

In recent months, the World Health Organization launched a global accelerator initiative as well as a technology access pool to speed up the development and production of diagnostics, therapeutics, and vaccines, as well as promote the sharing of knowledge around tools developed to fight COVID-19.

But these mechanisms are voluntary, allowing companies like Gilead to make their own deals.

“Gilead bypassed the whole global process,” Hu said. “Gilead didn't go through any of this. They made their own deal.”

Through this, the pharmaceutical company is setting a precedent for other companies, she added.

In April, Gilead committed to donating 1.5 million doses of the drug, with 40% of this donation distributed in the U.S. In May, it made the initial deal with five generic companies in India and Pakistan and added four more manufacturers, including one in Egypt, last week, for a total of nine companies.

With the deal, these companies can sell the drug at their own prices, without paying royalties to Gilead until WHO declares an end to the pandemic or another drug or vaccine is approved to treat or prevent COVID-19 — whichever comes first. 

While the arrangement included mostly low-income and lower-middle-income countries, including the entire African continent, it also excluded huge swaths of the world, including many countries in the Americas, the Middle East, Asia, and Europe.

But even for the countries that were included in the deal — quick access is not guaranteed, Hu said.

Because the agreements aren’t public, the quantity and timeframe of the manufacturing of these generic companies is unclear, she said.

This leaves questions over whether the generic companies can meet global demand for the drug, said Tahir Amin, co-executive director at the Initiative for Medicines, Access & Knowledge. These companies may choose to supply domestic markets first.

“I think there’s going to be a lot of political leveraging going on,” he added. “The more financially heavy countries may get access first.”

Even though the deal was made over a month ago, manufacturers in India are still waiting on regulatory approvals to begin producing the drug, according to The Indian Express.

Without more transparency, the global community could learn of a shortage in supply of remdesivir only after it’s too late, Amin said.

“Fear of trade and political pressure make countries think twice before talking about compulsory licenses.”

— Yuanqiong Hu, senior legal and policy adviser, Médecins Sans Frontières' Access Campaign

Compulsory licensing

Now the world has been divided by countries that Gilead will serve through its patents, pricing, and supply, and those countries that will be served by the generic manufacturers.  

Because these arrangements might not meet the rising global demand, there is a legal mechanism — through national laws — that allows countries to overcome patents through granting “compulsory” licenses. This allows a company to produce the drug, without a license, or allows countries to import from others producing it.

But compulsory licenses are controversial, with countries facing pressure from pharmaceutical companies and political pressure from countries.

The United States Trade Representative, for example, issues an annual report that criticizes countries for their use of compulsory licensing, among other practices. It issued its latest report in April.

“Fear of trade and political pressure make countries think twice before talking about compulsory licenses, even if it is totally legitimate for them to do so,” Hu said.

Some countries also don’t have strong compulsory licensing laws allowing them to do this, she added.

The agreement that Gilead made with the generic pharmaceutical companies is a “voluntary license” which allows other companies to produce its patent-protected technologies.  

There are other mechanisms to make voluntary licensing more transparent, such as the United Nations-backed Medicines Patent Pool. It manages voluntary licenses signed with companies, but the agreements are publicly available online. Gilead has previously used this platform.

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But even with compulsory licenses, some countries might not have the manufacturing capacity to start production immediately — including facilities, skilled labor, and the regulatory systems in place. The manufacturer might also have complications if the supplier companies have a contract with Gilead, Hu said.

Because of all of this, there's been a call for Gilead to not enforce its patents.

“If the patent was released and it was a bit more open, we could have other manufacturers stepping up who were not included in the license,” Amin said. “Gilead has played a very restricted hand in terms of the ability to get more production out there.”

Industry heads have shown resistance to releasing intellectual property rights during this pandemic, arguing that widespread access to drugs and vaccines can be achieved through partnerships and voluntary licenses.

"We wouldn’t be where we are without strong [intellectual property]. And companies are doing all the things one would hope them to do," said Thomas Cueni, director-general of the International Federation of Pharmaceutical Manufacturers & Associations during a press briefing at the end of May. This includes partnerships, voluntary licenses, and the willingness to scale up during these initial months of the pandemic, which poses a risk to the company.

There is the belief among advocates that Gilead wants to hold on to its patent because it aims to make long-term profits off the drug, following the end of the pandemic.

“Gilead still wants to control remdesivir. Gilead needs to get used to giving up that control,” said Peter Maybarduk, director of Public Citizen's Global Access to Medicines Program in a statement.

Beyond the situation of remdesivir, there could also be problems around access for off-patent drugs. This can include hoarding, which was also a problem seen with personal protective equipment.  

If the drug hydroxychloroquine, for example, were proven effective at fighting COVID-19 — it’s an old drug that many companies produce — there are questions around whether there are enough raw materials to meet demand, and whether some actors might try to re-patent its use for COVID-19, advocates said.

Experts are calling for mandatory stipulations placed on pharmaceutical companies to ensure equitable access to COVID-19 drugs and vaccines, and are asking that governments, who have invested heavily in their research and development, push for this. For example, Public Citizen estimates that $70.5 million in public funding went into developing remdesivir.

“In a moment like COVID, we have to think outside of our normal structural systems and think how we are going to actually alleviate this problem in the quickest and fastest way possible by getting access to as many people as possible,” Amin said.

About the author

  • Sara Jerving

    Sara Jerving is Devex's East Africa Correspondent based in Nairobi. She is a reporter and producer, whose work has appeared in The Wall Street Journal, the Los Angeles Times, Vice News, Bloomberg Businessweek, The Nation magazine, among others. Sara holds a master's degree in business and economic reporting from Columbia University Graduate School of Journalism where she was a Lorana Sullivan fellow.