Ruqayyah Snyder
In 2019, US Representative Alexandria Ocasio-Cortez criticised the CEO of Gilead Sciences, Inc., Daniel O'Day, for charging Americans $1,780 for the HIV prevention drug Truvada, which costs just $8 in Australia. Ocasio-Cortez's comments sparked a discussion about the high cost of the drug in the US compared to other countries, with some arguing that Gilead Sciences is profiting from a drug developed with US taxpayer money. While Truvada is not subsidised by the Australian government, it is available for purchase in Australia for a much lower price than in the US.
| Characteristics | Values |
|---|---|
| Cost of Truvada in the US | $2,000 |
| Cost of Truvada in Australia | $8 |
| Company that developed Truvada | Gilead Sciences, Inc. |
| CEO of Gilead Sciences, Inc. | Daniel O'Day |
| Year Gilead Sciences, Inc. generated $3 billion in revenue | 2018 |
| Truvada's availability on the Pharmaceutical Benefits Scheme in Australia | Not subsidised |
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What You'll Learn
Truvada's high cost in the US
Truvada is a prescription drug used to treat and prevent HIV. It was developed by the joint efforts of Dr. Thomas Folks PhD at the U.S. Centers for Disease Control and Prevention (CDC) and Dr. Robert Grant MD, who received $50 million in federal grant money for the drug research. The U.S. government patented the treatment in 2015. Despite this, the drug has been privatized, and the company Gilead Sciences, Inc. has earned billions from it.
In 2019, the CEO of Gilead Sciences, Inc., Daniel O'Day, was questioned by Rep. Alexandria Ocasio-Cortez (D-NY) about the high cost of Truvada in the US. Ocasio-Cortez pointed out that while Truvada costs close to $2,000 in the US, it only costs $8 in Australia and $6 in South Africa. O'Day replied that Truvada still had patent protection in the US, while it did not outside the country, and that it would be generically available in the US as of September 2020.
The high cost of Truvada in the US has been a source of outrage for many, including Ocasio-Cortez, who expressed that the drug should not be priced so exorbitantly, especially since it was developed with US taxpayers' money. The US government has earned nothing from the success of the drug, despite its crucial role in its development.
The price of Truvada in the US can vary depending on factors such as dosage, insurance coverage, and the pharmacy. The cost for a 30-day supply of Truvada can range from $0 with insurance to $1,933 for cash-paying customers. To lower the cost of Truvada, patients can look into patient assistance programs (PAPs), which offer cost-free or discounted medicines to individuals with low income or those who are uninsured/under-insured. Additionally, filling a 90-day supply at once can also help reduce the total cost of the medication.
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Gilead Sciences' $3bn revenue
In 2019, Gilead Sciences, Inc. CEO Daniel O'Day was questioned by Rep. Alexandria Ocasio-Cortez (D-NY) regarding the pricing of the HIV prevention drug Truvada. The drug, which costs almost $2,000 in the US, is available for just $8 in Australia. Ocasio-Cortez pointed out that the drug was developed with US taxpayers' money and that the US government patented the treatment in 2015. Despite this, Gilead Sciences is earning billions from the drug. Ocasio-Cortez asked O'Day: "Is it true that Gilead made $3bn in profits from Truvada in 2018?". O'Day replied that the company had generated $3bn in revenues, not profits.
Gilead Sciences, a California-based biopharmaceutical company, discovers, develops, and commercializes medicines in the areas of unmet medical need. The company provides treatments for HIV/AIDS, COVID-19, viral hepatitis, oncology, pulmonary arterial hypertension, and serious invasive fungal infections. Truvada, a drug used to reduce the transmission of HIV, is one of Gilead's products.
Gilead Sciences' revenue has fluctuated over the years. In 2018, the company generated $3 billion in revenue from Truvada alone. In 2023, the company's total revenue dipped slightly by 1% to $27.1 billion, primarily due to a $1.7 billion reduction in Veklury sales. However, in 2024, Gilead Sciences' total revenue increased by 6% to $28.8 billion compared to 2023, primarily due to higher sales in HIV, oncology, and liver disease treatments. The company's fourth-quarter 2024 revenue also increased by 6% to $7.6 billion compared to the same period in 2023.
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Truvada's patent protection in the US
In May 2019, the US government filed a patent infringement lawsuit against Gilead Sciences, Inc. and Gilead Sciences Ireland UC (collectively, Gilead) for their HIV drugs Truvada and Descovy. The Department of Justice (DoJ), acting on behalf of the Department of Health and Human Services (HHS), argued that Gilead infringed upon inventions by scientists at the Centers for Disease Control and Prevention (CDC) in the early 2000s. The DoJ also stated that Gilead had repeatedly refused to obtain a license for the use of the patented drug regimens while profiting from publicly funded research.
Gilead, however, disputed the claims and maintained that the US government patent was not valid. In 2023, a Delaware jury ruled in favour of Gilead, stating that the government's patents were invalid due to "obviousness". The jury's decision was partially overturned by a Delaware court in March 2024, which agreed with the jury's judgement on patent invalidity but disagreed on non-infringement, allowing the government to file an appeal.
In January 2025, Gilead settled with the US government to resolve the dispute, with the terms of the deal undisclosed. According to Gilead, the company was proud to have invented and developed Truvada and Descovy, emphasising their collaboration with HHS spanning over 15 years to work towards ending the HIV epidemic.
During the dispute, Truvada still had patent protection in the US, as mentioned by Gilead CEO Daniel O'Day in 2019. The patent protection allowed Gilead to set the drug's price at $1,780, in contrast to much lower prices in other countries, such as $8 in Australia. O'Day stated that Truvada would become generically available in the US from September 2020.
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Truvada's availability in Australia
Truvada is available in Australia, but it is not subsidised by the government. The drug, which is used to reduce the transmission of HIV and as a pre-exposure prophylaxis (PrEP), costs about $1200 a month to buy in Australia. It can also be bought online and imported for less than $100.
In 2016, the Pharmaceutical Benefits Advisory Committee (PBAC) rejected a proposal for Truvada to be subsidised on the Pharmaceutical Benefits Scheme. The Department of Health said that while the PBAC understood the importance of the drug as a prevention medication for HIV, the price set by the drug's sponsor, Gilead Sciences, was too high. The committee indicated that a substantial price reduction would be needed to make Truvada available for PrEP for the whole "at-risk" population.
The decision to not subsidise Truvada in Australia has been criticised by HIV advocates and groups, who argue that it limits access to an effective prevention tool and could potentially halve the number of HIV transmissions. They have called on Gilead to urgently submit a new application for Truvada and to ensure that it is successful.
The availability and pricing of Truvada in Australia have also been the subject of debate in the United States. In 2019, US Representative Alexandria Ocasio-Cortez questioned the CEO of Gilead Sciences, Daniel O'Day, about the disparity in pricing between the two countries. Ocasio-Cortez pointed out that while Truvada costs almost $2,000 in the US, it is available for just $8 in Australia. O'Day replied that Truvada still had patent protection in the US, while it did not outside the country, and that it would be generically available in the US as of September 2020.
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Truvada's rejection for subsidisation in Australia
Truvada, an HIV prevention drug, is available in Australia at a price of about $1000 for a month's supply, with its generic drug equivalent costing around $300. However, in the United States, the same drug costs $2000, and only $8 in South Africa. This huge price difference has sparked outrage, with Rep. Alexandria Ocasio-Cortez questioning the CEO of the manufacturing company, Gilead Sciences, Inc., during a congressional hearing.
Despite the drug being approved for use in Australia in May 2016, it will not be subsidised by the Pharmaceutical Benefits Scheme (PBS). The Pharmaceutical Benefits Advisory Committee (PBAC) acknowledged the importance of Truvada as an HIV prevention medication but deemed the price set by Gilead Sciences too high. A proposal to limit the subsidy to a small group of at-risk individuals was also deemed unfeasible. The PBAC indicated that a significant price reduction would be necessary for Truvada to be made available for PrEP for the entire population at risk of HIV.
Truvada's high cost in Australia has been a cause for concern for HIV advocates and groups, who argue that the drug has the potential to significantly reduce HIV transmission rates, especially among men who have sex with men. They have called on the government to list Truvada on the PBS to increase affordability and accessibility. However, as of 2016, Truvada's manufacturer, Gilead, has not submitted a new application for subsidisation.
The rejection of subsidisation for Truvada in Australia means that individuals at risk of HIV infection, particularly those in regional areas, may face challenges in accessing this effective prevention tool. The high cost of the drug could limit its utilisation, potentially hindering Australia's goal of eliminating HIV transmissions by 2020.
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Frequently asked questions
Truvada is priced at \$1,780 in the US and \$8 in Australia because Truvada still has patent protection in the US while it does not outside the country.
Truvada was developed by the joint efforts of Dr. Thomas Folks PhD at the U.S. Centers for Disease Control and Prevention (CDC), and Dr. Robert Grant MD, who has more than 30 years of experience in HIV/AIDS research.
No, Truvada is not subsidised in Australia. The Pharmaceutical Benefits Advisory Committee rejected a proposal for it to be subsidised on the Pharmaceutical Benefits Scheme as the price set by the drug's sponsor, Gilead Sciences, was too high.
