There’s a big shift underway in how poor countries access prescription drugs. Since 2014 the Egyptian government has been buying sofosbuvir – the leading oral treatment for hepatitis C – from Gilead Sciences at 1 percent of the wholesale price paid in the United States. As The New York Times reports, sofosbuvir is life-changing for Egyptians infected by the virus who can now receive free treatment from the government. While the deal was something of an experiment for leading pharmaceutical companies, success in Egypt may have set the standard for a new model.
Hepatitis C is a global crisis: about 140 million people are chronically infected worldwide, more cases than H.I.V., and about 500,000 people are killed by the virus each year. Egypt has the worst incidence, with nearly 9 million infections representing 10 percent of the population.
The problem in Egypt started in the 1960s and ‘70s, when six million people were infected with hepatitis C by unsterile needles during the country’s fight against schistosomiasis. In 2007 the government launched a campaign to fight the virus, setting ambitious goals to treat 300,000 patients a year starting in 2016 and lower the national infection rate to 2 percent by 2025. The plan relied on two older drugs – interferon and ribavirin – that have lots of side effects and can be difficult to tolerate.
In 2014, Gilead Sciences offered an intriguing alternative, selling it’s newly-released Sovaldi (generic name sofosbuvir) to the Egyptian government for just $10 a pill. The first oral treatment for hepatitis C, Sovaldi was only approved by the FDA in 2013, and a pill still costs about $1,000 wholesale in the US. Under the health ministry’s national hepatitis campaign, Egyptians can get Sovaldi for free.
Gilead did impose restrictions in Egypt to prevent widespread sale of Sovaldi on the black market, a concern that has prevented similar moves by pharmaceutical companies in the past. While Egyptian patients can get the drug for free at government pharmacies, they have to take the first pill when they pick it up and return an old bottle to get a new one. While international activists have called the first restriction a violation of patient rights, a year later the arrangement seems to have worked. More than 125,000 Egyptians have been cured and the black market for Sovaldi isn’t undermining Gilead’s business in rich countries.
As The New York Times explains, Gilead’s deal with Egypt makes sense when set against the pharmaceutical industry’s disastrous experience with H.I.V in Africa. In the face of a global health crisis and high drug prices in the ‘90s, poor countries forced price cuts in AIDS medications by threatening to revoke patents. Egypt used a similar tactic for sofosbuvir, initially revoking Gilead’s patent for Sovaldi, realizing that sofosbuvir would eventually show up on the generics market.
In addition to the deal with Egypt, Gilead has given certain Indian generics companies licenses to make and sell Sovaldi at whatever price they want, in exchange for a 7 percent royalty. The license only allows the Indian companies to sell sofosbuvir to the 91 poorest countries, protecting profits by excluding lucrative markets in middle-income countries like Russia and China. Under pressure to make the drug more widely available, Gilead has opened up 10 middle-income countries to the Indian licensees.
While protecting profits by limiting access in rich countries presents an obvious ethical dilemma, there’s no question that Gilead’s deal with Egypt has had a huge impact on the country’s fight against hepatitis C. Sales of Sofosbuvir also earned Gilead Sciences more than $10 billion in its first year, suggesting a win-win approach. Companies like AbbVie and Bristol-Meyers Squibb have already started emulating the model, representing the beginnings of a shift in how pharmaceutical companies sell drugs in low-income countries.