In May 2019, several prominent AIDS activists filed an antitrust lawsuit against several manufacturers of HIV drugs, most notably, Gilead. The antitrust lawsuit was filed in federal court in San Francisco and is currently underway. Activist Peter Staley, best known for his work with ACT UP and now #PrEP4All, is the lead plaintiff in this lawsuit. Staley spoke to TheBodyPro about the lawsuit and what he hopes to contribute to ending the epidemic.
Terri Wilder: Peter, what was the motivation for you to file this lawsuit?
Peter Staley: Well, because the legal team had uncovered pretty unconscionable crimes, and that had led to a total corruption of not only the market for PrEP [pre-exposure prophylaxis], but for the entire market of HIV treatment. And for me it was personal, because I had cut my teeth as an activist during the early years with ACT UP, leading an effort to fight the very first monopoly in HIV and the gross profiteering that had occurred during that period when AZT was the only drug on the market, and Burroughs Wellcome decided to rape and pillage its way through the early HIV, through the plague years, even though the government had done a lot of the research for them.
We kind of won that war against them. And by the time the price of AZT had gone from $10,000 a year to $3,200 a year, with all the NRTIs that came after it being priced competitively less than $3,200, we had a period in the early ’90s of a real marketplace in HIV drugs, with real price competition, with five or six companies actively competing. And even the protease inhibitors, when they finally came out, stayed well clear of the $10,000 marker that Burroughs Wellcome had tried to set as a floor for HIV drugs. And there was price competition in the protease inhibitors.
That period of a highly competitive marketplace, I’m convinced, had a lot to do with the innovation that led to the breakthroughs that saved my life, and the lives of millions of people around the world.
Fast-forward to today, and we are infuriatingly back to a near monopoly in HIV treatment and prevention, with one company ripping off everyone and probably costing us a great deal of innovation because of it.
TW: Let’s talk about some of the specifics.
PS: I think we’d be further along, possibly even on the cure research front. Instead, we have a company that controls the treatment market and the prevention market, and people with HIV and all the antiretroviral regimens cost about the same as a totally tricked-out SUV, around $35,000 a year. And our lawyers discovered that that should not be where we’re at. We should have quite a few of these regimens cost less than $20,000 a year, because they should—because they could—include generic components, if not for the agreements that Gilead wrote, Gilead’s lawyers wrote, between themselves and these other three companies, to keep generics off the market.
TW: Let’s talk about the details of the lawsuit and what are the goals of why the plaintiffs got involved.
PS: Back up a bit. Around 2000, the state of AIDS treatment was we had over 30 AIDS drugs approved by the FDA. There had been some double-drug combinations that—some companies would combine two of their own drugs into one pill; most famously at that point was Combivir from Burroughs Wellcome.
But there was a real move around 2004-2005 for companies to start partnering to combine three-drug regimens, three- or four-drug regimens, into one pill, once a day—that that was the future innovation that was going to happen. And Gilead, who at that point had the biggest-selling NRTI backbone, which was Truvada, the two drugs in Truvada, started partnering with a bunch of companies for what would be best-in-class, one-pill, once-a-day combinations.
And that’s where the innovation kind of ended, because hidden in those agreements was language that, basically—each company promising the other that they wouldn’t create these combo pills in the future with generic components, once either of their drugs lost patent protection. And that’s blatantly unconstitutional, to say you’re not going to compete in the future. Nobody knew that language was in these agreements until our lawyers uncovered them.
TW: You’ve referred to the lawyers uncovering this. But you had to have had some kind of suspicion that there was something going on before you even approached a lawyer about this.
PS: Right. The suspicion was actually about something else. This all happened because of, in, I think it was May or June of 2017, when the FDA surprised—just gobsmacked—every single AIDS activist in the country by, out of the blue, announcing the approval of a generic version of Truvada that Teva Pharmaceuticals had applied for.
We were under the impression that Truvada wouldn’t go off patent until 2021. And the first thing we did is—I mean, I called the head of community relations at the FDA and said, “What the fuck? How can this be?”
And he said, “As far as we’re concerned, it is now perfectly legal for a generic to come to market, and we expect Teva to have it on the shelves within the month.”
It just stunned us. So we called; we tried to get in contact with Teva. We tried to get in contact with Gilead. And then, 24 hours later, both companies released almost identical press releases, saying, “Ignore what you’re seeing here. Teva will come to market with its generic in 2021. Thank you, FDA.” And that just obviously raised a million alarm bells.
[Activist] James Krellenstein started digging and jumping on a steep learning curve about what had happened here. And he discovered that Teva and Gilead had been in a legal battle for a long time over these patents—and a few other generic companies, as well—and there was some sort of out-of-court settlement that had resolved it all. And he discovered that that settlement was sealed; the public couldn’t see it.
So he suggested that we reach out to some academic experts on the pharmaceutical industry and patent law. We got that initial help from experts at NYU, and at Yale. And they told us that this had all the signs of being what’s called pay-for-delay. And the deals are always sealed; they are always out-of-court settlements, where the brand-name company gives something to the generic of value to convince them to hold off a few years bringing their generic to market.
Every time these deals have been challenged in court—usually by the FTC [Federal Trade Commission], which is the only agency that actually sees these sealed, out-of-court settlements—on the rare occasions that they’ve reached the Supreme Court, they’ve always been shot down and labeled as unconstitutional, as antitrust and anticompetitive activity.
So we asked these experts, “Well, how can we do that?”
They said, “Well, you can’t look at the deals. But if you can convince a state attorney general to pursue this, they could demand to look at the deals. And there’s another way.”
And we did that. We had a meeting, a nice, lengthy in-person meeting, with the antitrust division of New York State Attorney General, where they ended it saying, “Thank you very much. Now we can’t tell you anything from this point forward.” So we had no idea whether they were going to pursue it or not.
But these academics also said, “You know, you could pursue this with a big-pocketed law firm, as well. Because there’s a lot of money here on the line. If they’re keeping generics off the market, artificially inflating prices for year after year, all the payers are overpaying. And all those payers are getting screwed. So it’s a big class-action suit, and you could find a law firm that might be very interested in pursuing that.” And they could do all the legwork and spend all the money to bring this to trial, and to force a court to open these documents to discovery that Gilead had signed with a couple of generic companies.
And they told us about a very progressive law firm in Austin, Texas. That’s how we first met my lawyer, Steve Shadowen. And James pitched to them on the phone, talking to Steve for a little while on the phone. And about a week later, Steve called him back and said, “I’ve got 12 lawyers working on this. We’re all in.” And then, you know, within weeks James and I were meeting Steve in person in posh hotel rooms in New York City, as they started launching this fishing expedition, seeing if they could find hints that this was actually pay-for-delay.
That started a year of research with a widening circle of lawyers looking into it that uncovered stuff way beyond some pay-for-delay deal. They uncovered this conspiracy to monopolize the entire field of HIV treatment. And that’s what turned into Staley v. Gilead.
TW: You know, unless you’re in the HIV world—and maybe even people in the HIV world may not even realize this, and may be shocked to hear it—but 80% of people on an HIV treatment in the United States take at least one Gilead product every day.
PS: Eighty-nine percent of those starting treatment for the first time take a Gilead product.
TW: And then 100% who use PrEP take a Gilead product.
PS: So it’s the obvious monopoly with prevention, and it is, by most economists’ measure, a monopoly on the treatment side, as well. It’s called a near monopoly, but the market acts like, at that point, when you have 90% dominance, the other 10% basically gives up trying to compete on price and rides the profiteering of the monopoly. So they basically match the price.
TW: Tell me a little bit about what’s happening in court. I know that you were just there—was it last Thursday—which, I believe, was Jan. 16?
PS: So, yeah. We’ve been in what’s called the motion to dismiss phase, which is really the first phase of any large antitrust case. That’s when the defendants can make an argument to the court saying, “There’s nothing to see here, Judge. This is a bogus case. The complaint is meritless, and you can throw the whole thing out; just not waste everybody’s time.”
And so the first six months has all led up to this moment of the oral arguments. Gilead actually filed a written motion to dismiss in September, and then we were given a month or so to reply, in writing. (And all of these things are, you know, over a hundred pages each.) And then Gilead was given a month to reply to our reply. And, in fact, there are multiple motions to dismiss; each company writes its own, each defendant.
During that period, there were amicus briefs that were sent to the court from parties not involved in the case that wanted to weigh in before the judge made a decision on the dismissal. Two of those came in. One was from a coalition of AIDS groups, led by TAG [Treatment Action Group], that really laid out from a community perspective of why this case matters. And that was written by a pro bono legal team, including some students at Stanford Law. And it’s really a marvelous document.
In fact, that department at Stanford—they’ve created a web page that will be updated about the case that includes all the underlying documents—the original complaint, motions to dismiss, the amicus briefs, all that stuff. Everything that’s been written about the case in legalese is on this one, easy web page.
And then there was a surprise amicus brief from President Trump’s Federal Trade Commission, the FTC. It was actually against Gilead, kind of on our side. It was over a kind of obscure legal argument that Gilead had tried to make in its motion to dismiss. It wasn’t really weighing in on the underlying case, per se. It was shooting down one of the arguments that Gilead had tried to make. We saw that as a pretty extraordinary sign that this case is being widely followed, including by the U.S. government and by antitrust lawyers around the country, including within the FTC.
TW: So, you didn’t know that was going to happen?
TW: Did you ever find out how that came about?
TW: I looked at the amicus brief, and it’s very detailed. You mentioned that TAG was part of it. It lists amfAR, Health GAP, Housing Works, and some other AIDS service organizations. And one of the things that it says in there is, “The outcome of this case will have huge ramifications for the future of HIV treatment and prevention efforts in the United States. The lives and wellbeing of well over 1 million Americans depend on this market functioning openly and competitively.”
So, when we think about this case, what is the ultimate vision? What are you hoping that this is going to change, in terms of not only for people with HIV, people who take biomedical prevention; but it could also influence every other medication that Americans take?
PS: Certainly, medications that involve combinations of medications, where two companies are involved, two or more companies. Because we do think that this practice is probably—in that subcategory of medicines—is probably widespread. And our lawyers were the first to discover it.
We’re hoping for injunctive relief, as it’s called. We want this practice to be ruled unconstitutional, so that these agreements that Gilead currently has for all the Truvada-based regimens, and all the agreements it’s struck since then with Descovy and with other companies to replace the Truvada-based regimens. They include the same unconstitutional language, anticompetitive language; we’re hoping all of that gets struck down by the court, so they’ll have to remove that language from these agreements. That would, in turn, open some floodgates on the HIV treatment market, where a lot of these one-pill, once-a-day combos would come on to the market at less than $20,000 a year. And they’d be very much the same as the ones that cost $35,000 a year. They would just include some—they would have one branded, one or two branded components—and also include at least one generic component in the combination pill. And that the use of generic components in these combo pills should lower the price from $35,000 to less than $20,000. At that point, you’ll have a two-tiered market. You’ll have the fully branded combo pills at $35,000, and you’ll have the partially generic combo pills costing less than $20,000. And payers—insurance companies, state Medicaid programs, etc.—will push everyone towards the generic ones, the cheaper ones. That will bring price competition back to the market.
What that does is, the companies that are still trying to sell their tricked-out-SUV-priced ARVs are going to realize the only way they can keep charging those prices is if they come up with some genuine innovation that has patent protection for another 10 years. So that price competition is what leads to innovation. The only way you can charge the kind of prices you’ve been charging is to invent something new. And that innovation could really, really bring—I mean, these long-acting injectables, for instance? We could have had these on the market five years ago, 10 years ago, if there had been real price competition going on.
So, yeah. I’ll be the first to admit there’s been constant innovation in HIV. But it has slowed down a great deal from what we saw in the early ’90s, which kind of lasted almost all the way until Truvada came out in 2004. So, I would argue we’ve seen, you know, kind of a slow paddle, a doggy paddle, basically, ever since that innovation, where we could be seeing a real nice sprint towards a cure.
TW: I would think that state elected officials would be very interested in this, particularly because you mentioned about, you know, we’re potentially wasting Medicaid dollars that are unnecessary, that could be going to something else.
PS: And that’s what’s argued in the amicus brief from TAG, is that we have a real-world example using cost savings in HIV treatment to EtE [Ending the Epidemic] initiatives. In New York State, when we were trying to convince Governor Cuomo to champion this effort, we were getting nowhere. And then the AIDS activists came up with this brilliant idea of: Why don’t we go to the manufacturers, the pharma companies, and say, “Listen. If you give an additional discount on your ARVs to the state Medicaid program, and we promise to plow that money back into expanding the treatment pie by larger testing programs and programs that enroll people and keep them on treatment, and expanding care initiatives, etc., etc., will you do it?”
And one company after another finally agreed. And we were able to go to Cuomo and say, “We’ve got your money to do this.” That’s when he signed on.
So the reason we don’t dream in this country about implementing our current tools to end AIDS is because health programs, government health programs, don’t have the money to do it. And the reason they don’t have the money to do it is because they’re spending all of their money on ARVs. They’re spending all of their money on buying, each and every year, every single person with HIV a totally tricked-out SUV. It makes no sense!
TW: Who actually owns the patents to these drugs?
PS: It depends on the drug. Some are owned by the pharma companies. Some are licensed, have an exclusive license from the original inventor.
TW: The reason why I’m asking this question is I feel like I’ve read something about, does the government really own some of these patents?
PS: Well, in the case of PrEP, there is the invention of the drug itself, the chemical; sometimes that’s invented by the company and sometimes that’s bought buy the—you know, companies buy them from somewhere else, or license them, get an exclusive license from the original inventor. And then there are what are called use patents, where there’s already a drug but someone else discovers it can be used for something else. And that discovery is—you know, it matters to the person that ultimately uses the drug for that purpose. It’s a very, very important discovery.
So, with Truvada, Gilead had ownership of the compounds, either by inventing it themselves or by licensing it from others. And they had no interest in looking at whether Truvada would work as a preventative. They made that very clear to multiple people starting in 2004 and 2005 when the research started gearing up for that. And that’s been very well documented.
They said, “We’ll give you a free drug for whatever trials you need, but keep us, you know—keep us out of it.” And all of that was done by Dr. Bob Grant, the Gates Foundation, and the CDC [Centers for Disease Control and Prevention]. And later, NIAID [National Institute of Allergy and Infectious Diseases] did some support, as well.
But the original discovery that it actually works to block sexual transmission—that was done by the CDC. So the CDC instantly filed patents on that discovery. Gilead never filed a patent of using Truvada as PrEP, which is just like a gigantic, screaming red flag saying, “We don’t care!”
And now they’re saying, “Oh, no, the CDC patents aren’t valid. We had a lot to do with the discovery. We helped a lot with those clinical trials. We deserve to make $3 billion a year selling Truvada as PrEP.” And there’s just no evidence of that. It’s a Trumpian claim.
TW: Is there any chance that Gilead owes CDC money?
PS: Oh, that’s why there’s a case called The United States v. Gilead.
TW: Got it.
PS: There is every chance that they are going to owe them money. And that money, most of it, will get plowed back into HIV prevention.
TW: So, let me get back to the case that we’re talking about. We talked a lot about Gilead, but there’s Bristol-Myers Squibb; there’s Johnson & Johnson. And then there’s a company that some people may have never even heard of: Japan Tobacco.
PS: They are a conglomerate in Japan that has a pharmaceutical division. And they had an integrase inhibitor, one of the—I’m not sure of the name of the one they had—Japan Tobacco. It’s one of the integrase inhibitors. It’s going to take me a while to find, but it’s in our complaint somewhere, an integrase inhibitor.
TW: Elvitegravir: EVG.
PS: Yeah. Thank you.
TW: What’s happening next? You had your day in court Jan. 16. And what’s next? What did the judge say?
PS: He’s going to take upwards of 90 days to make a decision on these motions to dismiss. And we’re all going to be on pins and needles until then.
He did set a trial date and laid out a schedule to get there. There are lots of steps between now and then, a very long period of discovery where we’re going to be trying to get upwards of a million dollars out of—a million documents out of—these companies that we have to go through. And then after, there’s a period where the class in the class action gets defined—who can all be part of it? You know, does everyone from—every person with HIV who’s ever taken a Gilead drug? Or any antiviral? And are all the insurance companies going to be allowed in? Are all the state Medicaid programs going to be allowed in? So, defining that class as a whole is argued.
And there are all these phases. And then you finally get to a trial date. And that was set for Feb. 28, 2022, two years from now.
TW: When is the next time you have to go to San Francisco?
PS: Four months from now.
TW: And on various occasions you’ve gone with other plaintiffs.
PS: Right, other named plaintiffs. There are five AIDS activists as part of the group of named plaintiffs. And there are a couple of unions, I think; a couple of other payers that are named on the case. But we made sure to have a group of activists on there, as well.
TW: Great. Like I said earlier, this could have huge ramifications, like you mentioned, globally, but also in the United States, trying to end our local epidemics, you know, with these high prices. And I’m thinking particularly—you know, we have this robust, beautiful system in New York State, like you mentioned earlier; but for places like the South, where they may not have a great ADAP [AIDS Drug Assistance Program] system, they may not have good resources through Medicaid, this could really help in a lot of situations, and also help people get access to preventative HIV drugs that could really reduce the risk of getting HIV.
TW: So, this is really interesting that you are circling back around after doing this in the late 1980s with AZT. Here you are again.
TW: It’s never ending, right?
PS: Yeah. I’m fighting more battles.
TW: Yeah. Just with different drug names.