China’s rejection over Gilead’s patent application sparks controversy

Gilead Sciences, Inc. is a research-based biopharmaceutical company founded in 1987 that centers its focus on the discovery, development, and commercialization of advanced medicines intended for unmet medical needs. Recently, speculations arose when the government of China denied Gilead’s patent application for its polemical drug Sovaldi, an antiviral prescription medicine used to treat chronic hepatitis infection. Failure to obtain a patent could deliver a major blow to the company’s plans in the future, yet this remains to be a subject for debate.

The State Intellectual Property Office of China on Friday made known that Gilead’s GILD, -1.16%  request for a patent was declined. The agency, however, has yet to verify this report.

The Initiative for Medicines, Access & Knowledge (I-MAK), a nonprofit organization, communicated its clear opposition last fall by filing a patent challenge, making it the first-ever patent challenge that a civil society group in China has filed.

Wall Street analysts without putting much stock in the application stated granting permission to the biotechnology company in marketing Sovaldi, $1000 a pill in the USA, exclusively in the country would break with its tradition.

“If the patent was upheld and Gilead was actually able to sell a drug there, at a premium, the market would be huge. It could cover Gilead’s market cap alone,” Brian Skorney, an analyst for Robert W. Baird & Co, said in a news release. “However no one actually expected China to change their long-standing policy of not recognizing innovation and upholding patents,” he added.

In its latest action, Gilead stocks were closely down to $120.40. The company however still remains mum about the issue.

I-MAK envisions Gilead’s future attempts in applying for a patent in some other countries; nevertheless, they surmised that China’s recent rejection of Gilead’s patent application is a bad omen for the company entailing more rejections in the future. This nonprofit New York-based organization has even filed legal challenges over Sovaldi patent applications in the countries of Argentina, Brazil, Russia, and Ukraine. In line with their advocacy, they strongly question how genuinely advanced the technology used by Gilead is as other biopharmaceutical companies today are also developing the same types of effective drugs.

Co-founder and director of I-MAK’s intellectual property, Tahir Amin, mentionedin a news release, “We hope that other countries’ patent offices do the right thing, reserving patents for drugs proven to be new and nonobvious and helping millions of people get the medicine they need to survive.”

In the USA, Gilead has been charging around $84,000 for a course of Sovaldi treatment that will run for 12 weeks, which costs $1000 a day. However, based on reports, the cure rate of the said treatment has been well over 90% which caused an uproarious disapproval among insurance providers, government authorities, and a number of concerned patients. In due course, Gilead started promoting on the market another type of hepatitis C drug, Harvoni—which costs even more around $94,500 for a 12-week treatment.

I-MAK emphasized that Gilead was expecting to charge each patient in China somewhere between $2000 and $15,000 in a 12-week running treatment. Granted that hepatitis C affects more or less 29 million people, the project would arrive at a profit around between $58 and $435 billion.

In late 2013, the U.S. Food and Drug Administration approved Gilead’s Sovaldi treatment. And for fiscal year 2014, its income considerably reached more than double, not far off $25 billion. Besides, its income almost increased fourfold to $12.1 billion, increasing Gilead’s net margin from 48.6 to 27.4 %.





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