India stands to get even cheaper Sovaldi

Last fall Gilead Sciences Inc. made a deal with seven drug makers in India to allow them to market Sovaldi for a 7% royalty. Gilead has been selling the drug in India for $900 for a 12-week course. The company stood to earn up to $700 million there, where an estimated 12 million people have HCV.

This week, the Indian government rejected Gilead’s patent on Sovaldi, saying the drug incorporates only minor changes from a previously developed compound. The ruling will allow other Indian companies to set their own price for the drug, which costs less than $140 to manufacture, according to a Médecins Sans Frontière (Doctors Without Borders). Undoubtedly, if the pricing gets very competitive, Gilead’s profits from the huge Indian market will slump.

But this shouldn’t be too big a blow to Gilead. It charges 100 times the Indian price when it sells Sovaldi to hep C patients in the U.S.A. And don’t expect any changes to the patent there. The U.S. Patent Office has a history of being sympathetic to big industry, and pharma is a giant.

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