Why One Drug Company Held Back a Better Drug

from The New York Times I'm Sabrina. tavernisi and this is the daily. [Music]. for decades drug companies have argued. that patents are critical to Bringing. new drugs to Market. today my colleague Rebecca Robbins on a. case that suggests they can also create. perverse incentives to hold new drugs.

back. it's Thursday September 7th. good. [Music]. so Rebecca you report on the. pharmaceutical industry and you've been. reporting on a case involving a big name. American Drug Company tell me about that. reporting. yeah Sabrina so we all know that prices. are really high for many drugs in the.

United States and in some respects that. is by Design. so the way the system works is we rely. on for-profit companies to spend a lot. of money to develop and bring to Market. new drugs and in return for spending. that money for taking all those risks. they get to have a monopoly that lasts. for years and that allows them to sell. their medications for lots of money and. keep those prices High and there are. actually laws and regulations that. protect that Monopoly. and part of the rationale for this.

system is that the promise of these. profits creates incentives for the. company to produce new and better drugs. to help more people. but recently my colleague Cheryl. gaystelberg and I came across a case. that I think raises serious questions. about whether the system is always. getting the best medications to patients. as quickly as possible. and where does that story start so I. want to start with the story of a. patient named David Swisher hi Rebecca.

how are you I'm good um thank you so. much for so today David is a 66 year old. retiree he's living in Florida after. retiring from a long career in the. airline industry that took him all over. the country for different jobs. and so back in 1997 I was living in. Texas South of Houston and I just turned. 40. David started feeling ill it was. very intense I mean it was like you're. aching from head to toe I kept going.

into the emergency room like for a week. telling them I feel bad if something's. wrong I have the flu after the third. time I went in there really really not. feeling good someone was smart enough to. send me upstairs and say let's let's do. a work over on this guy see what's going. on and finally after two nights in the. hospital one of the young interns she. came in and she just says well we. figured out what's wrong with you. it turned out that he had HIV what was.

going through your head at that moment. that I was gonna drop dead. and when he got his diagnosis his mind. immediately turned to his worst fears. I'd lived through all that epidemic from. I lived in San Francisco from 1978 until. 1984. and it. got so gloomy and dark he had a huge. number of friends that he lost it was a.

really really painful time like 80 of my. friends had died in a six-year period. and all of them were under 30. it just. they're coming on Friday and say what uh. David I parked my car you know in a bad. spot and I left the keys in your desk. can you can you move my car so I can you. know it doesn't get towed away and then. bring it up to me in the hospital on. Monday okay so no problem I would go. move their vehicle go up on Sunday night. to see them and find out they were dead.

so when David got his HIV diagnosis in. the mid 1990s he thought it was a death. sentence but it turns out it wasn't and. that's because by that point drug. companies were making huge strides in. treating HIV with powerful new. medications but the first versions of. these drugs had some really tough side. effects they were really challenging for.

patients to take in my mind I'm thinking. that's fine I'll be alive you know I'd. much rather be alive in the option which. wasn't good but uh I was allowed to go. back to work and I was pretty much you. know I'd lost some weight and that. didn't look really healthy but I was. able to regain the weight and continue. over time the medications became easier. to take fewer side effects more. convenient I went from a cocktail of a. bunch of pills to one pill a day and in.

2004 a the drug company called Gilead. released a drug called Truvada uh you. may have heard of it today it's used for. both preventing HIV and treating it I. remember it was a big deal when it came. out exactly it was a huge deal and. that's because it was really effective. many patients had less severe side. effects on travata and it was more. convenient to take. it really became a game changer in the.

fight against AIDS and the key. ingredient in travada is a version of. something called tenafavir it prevents. the HIV virus from replicating this. doctor said to me says well you're doing. well on the three medications you're on. but. the drug rep. has really been pushing this touting it. really is the miracle medication it's. all about convenience it's one pill all. you got to do is take one pill so I. started taking the Truvada that's where.

it started. so. getting started to change for him he. felt different I would say between 2006. and 2011. it had gotten progressively worse just. really achy like achy inside my bones. and just really like someone to kind of. beat me up you know just the achy all.

over and so after a long time trying to. figure out what was going on. David's primary care doctor had an idea. he suggested ordering a scan of David's. bones okay so we did it and uh so I sat. there and he came in and he says well. it's like bones of a 90 year old woman. I've never seen anyone at your age have. such severe osteoporosis. so at this point your man who's 62 being.

told you have the bones of a 90 year old. how did it feel to hear that frightening. all that the primary care said was. it's quite possible that it's toxicity. from some of the medications that you. may be taking. the conclusion he and his doctors came. to was that even though Travato was. treating David's HIV and keeping him. alive it also appeared to be the most. likely cause of the side effects the.

weakness and his bones and also some. kidney issues he was experiencing. [Music]. so what does he do well fortunately for. David in 2016 Gilead released a new HIV. drug. this new drug contained a newer version. of tonal severe again that's the active. ingredient in Truvada the medication. that appeared to be making David sick. but this new formulation of tenal severe.

was different. The Tweak in the formulation of. tenafavir turned out to be a big deal it. ended up meaning that the medication. didn't carry the same side effects that. David had been experiencing so David. switched over to Gilead's newer version. of the drug and his health began to. improve. but David had spent years suffering from. side effects he attributes to Truvada he. even took an early retirement because he. felt he wasn't able to work anymore. so he wanted to know what exactly had.

gone wrong with Truvada so I Googled. kidney Decline and. severe osteoporosis David did some. Googling and he came across an. advertisement from lawyers who were. looking for patients patients who had. experienced side effects like the ones. he had. these lawyers were suing Gilead and. David was eligible to join the lawsuits. and I thought about it in a really. reluctantly I had never seen anybody so.

I was thinking that. first of all I wouldn't really know how. to go about it and is that something. that I wanted to get into you know or. did I just want to let the medicines do. their work and David was reluctant at. first to reach out to these lawyers he. was taking the new drug it seemed to be. working much better for him but it just. really got me mad but he was also angry. that Truvada this drug he'd taken for. years and years appeared to have hurt. him so much and he was also angry at.

Gilead. so David ultimately decided to join the. lawsuits he became one of some 26 000. patients who are suing Gilead and what. are they arguing in the lawsuit like on. what grounds are they suing Gilead. lawyers for these patients have put. together a number of claims they're. arguing the usual sorts of things you. see in personal injury lawsuits that. Gilead was aware of the problems and did. not adequately warn patients about these.

potential side effects but they're also. making a more unusual claim. they say that the newer version of tenal. fever that's the one David eventually. switched over to that didn't have the. same bone and kidney side effects could. have been made available to patients. about a decade earlier than it was so. what does that mean there was a newer. version that's better and they just held. it that's right they say that Gilead had. been working on this newer version in. the early 2000s they also claim that.

even though there was good reason at the. time to think that the newer version. would turn out to be safer that it. wouldn't have those same kidney and Bone. side effects Gilead still decided to. delay bringing it to Market. so they're arguing that the company. actually had a newer version that was. safer that they withheld but why would. they do that well the theory is that it. was all about maximizing profits okay so.

explain what you mean by that well it. all goes back to the system that I was. talking about this for-profit system of. drug development. a central part of that is patents which. protect a drug company's intellectual. property patents are really the. lifeblood of the pharmaceutical industry. so the way it works is when a drug. company develops a product they can and. do file for lots of patents and together. these patents create a monopoly which. lasts for years that means other.

companies cannot sell a generic version. of the same drug and so prices stay high. because whichever company controls the. patents faces no competition. and what's the rationale for that the. thinking is if you were to do all this. research and spend all this money to. bring a drug to Market and then. immediately your competitors could just. come in and sell knockoff copies of your. hard work so you couldn't make money. well then you wouldn't have much of an.

incentive to do that innovation in the. first place and I think there's broad. agreement that a lot of times that. system works really well. but critics say there are also downsides. to this system for one it keeps drug. prices higher for longer and in David's. case his lawyers are arguing that the. system created an incentive for Gilead. to delay bringing its Innovation to the. market that was the newer drug that. would have been safer for David.

so Gilead had a monopoly on the older. version of the drug that's the one that. was in the medication that David took. and that Monopoly was due to expire in. 2017. so that meant that Gilead had full. protection against competition until. then and could keep prices High and the. plaintiff's lawyers argue that Gilead. intentionally decided not to release the. newer potentially safer version of the.

drug so that it could make more money. okay so the plaintiffs are saying that. you know we've been suffering from these. side effects which you Gilead knew about. and all the while you had a new drug. that didn't have those side effects but. you didn't release it because you didn't. want to effectively eat into the profit. that the first drug was still bringing. in that's right and what did Gilead say.

and what was their response about this. allegation that they'd intentionally. withheld the drug for profit so Gilead. denies the allegation completely the. company acknowledges that they did delay. the drugs development in fact they. publicly acknowledged in 2004 when they. made the decision they put out a press. release announcing that they had decided. to stop developing the drug but the.

company says that had nothing to do with. profit the real reason they said at the. time and they say now is that the newer. version wasn't sufficiently different. from the older version to justify moving. it forward and on its face that's a. completely reasonable reason to not move. forward with a drug it doesn't make. sense to bring to Market to virtually. identical versions of the same thing. but as this lawsuit has unfolded and.

moved through the court system the. lawyers for the patients who are suing. have as part of the normal Discovery. process managed to get their hands on. internal company documents from around. the time in early 2000s when Gilead. Executives were making decisions around. the development for this newer version. of the drug and those documents give a. really rare view of what was going on.

behind the scenes of what the company. Executives were considering and I think. they suggest that Gilead's version of. events doesn't reflect the whole story. [Music]. we'll be right back. [Music].

so Rebecca you told us that the. plaintiffs in this case are arguing that. Gilead withheld a safer drug from the. market in order to maximize their. profits Gilead denies this but now the. plaintiff's lawyers have their hands on. all of these internal documents so what. do we actually know about what happened. here. so the documents give us a really. fascinating look inside this drug.

company at a time when Executives were. making decisions about these medications. so let's go back to the year 2001. that. was the year that the FDA approved the. original version of to not severe and in. those early years the evidence began to. accumulate that some patients very small. fraction of the overall number but some. patients did develop side effects. typically problems with their bones. their kidneys that appear to be caused. at least in part by the older version of.

General severe. but Gilead was not just banking on the. original formulation of this drug like. companies typically do Gilead scientists. were tinkering in the lab with other. very similar compounds the idea was that. if you make small changes tinkerer with. molecules you might find some. dramatically improved drug or learn. something important or have a backup in. case the product that was being. prioritized didn't pan out okay and one.

of those molecules stood out. pretty quickly the company's scientists. identified this newer version as having. potential in its own right maybe it. should be developed on its own merits as. a new potential Blockbuster in the drug. companies pipeline. and I assume this is the version of the. drug that the lawsuit talks about right. so what was so exciting about this new. version yeah so early studies conducted. and animals and in the laboratory. indicated that this new formulation was.

much better than the original version at. delivering tenafavir to the cells in the. body it was targeting and that meant. that way less of it was leaking into the. bloodstream where it would travel to. kidneys and bones and cause this. toxicity and the early studies showed. also that it could be given at a lower. dose now it's important to say the. Gilead scientists did not have. definitive proof at this point the the. newer formulation of the drug was safer.

in humans you would have to run bigger. clinical trials to know for sure. but there was some pretty strong early. evidence that this was promising that. was echoed in an internal Memo from 2002. that said the newer version quote May. translate into a better side effect. profile and less drug-related toxicity. end quote that's huge right I mean that. would mean that this new formulation was. likely not to cause those awful side. effects we heard David and so many.

others had right so at the time there. was a lot of optimism within the company. about this newer version it appeared to. be full steam ahead with this drug. company scientists were updating the. research community at conferences. Executives were keeping investors. abreast the company was running. Productions looking at how much money. the drug could make and in 2002 the. company began the first human clinical. trial of the newer version to evaluated. safety in that same year you can see in.

the documents that a Gilead employee. mapped out a development timeline for. the newer version and the timeline. projected that the company could get the. newer version to Market as quickly as. 2006. so that would have been just a few years. after David had started on the old. version of the drug exactly but that's. not what ended up happening. even though there had been all this. excitement among Gilead scientists about.

the newer version of the drug at some. point around 2003 company Executives. started to sour on rushing it to Market. and Gilead did not follow through on. those plans that could have brought it. to Market by around 2006. why. so these internal documents indicate. that Executives started to worry that. releasing the newer version of the drug. would eat into the market share for the. older version of the drug okay now the.

phrase they used was cannibalize as in. the new drug would quote ultimately. cannibalize end quote the market for the. older drug Gilead would essentially be. competing with itself. [Music]. so that's pretty explicit that's right. and remember Gilead at this time knew it. had a monopoly on selling the older. version of the drug that would last. until 2017. so there was still a lot of. runways still a lot of time for Gilead.

to earn money from this franchise right. this is a rare golden ticket they want. to keep it as long as it'll go exactly. so instead of pushing forward on this. newer version of the drug the documents. indicate that the company was. formulating a plan. it was called a patent extension. strategy and it's repeatedly referred to. that way in the documents what the. company wanted to do was find a way to.

maintain its Monopoly to maintain sales. beyond the expiration of the Monopoly on. the first drug. and the internal documents from 2003. showed that the company ultimately. planned to time the release of the newer. version of the drug right when it would. be optimal to switch patients over from. the older drug this is right before the. patent was expiring. one memo says the development of the. newer version quote is timed such that.

it is launched in 2015 end quote notice. that path you know a drug like that. isn't going to take 12 years to develop. so this is a business analyst at the. company proposing delaying the release. of the newer version. and so in 2004 Gilead halted the. development of the newer version of the. drug. [Music]. okay so to recap these documents suggest.

that company Executives didn't want to. squander any of this precious patent. they wanted to be able to keep prices. high for as long as possible to maximize. profits and so they halted the. development of a new potentially better. drug. which is really the opposite of what the. whole patent system is meant to do. that's the allegation now the documents. don't explicitly say that the reason for. halting development was because the.

company was following any sort of. strategy to try to maximize profits but. the documents do provide context around. the business considerations Gilead was. thinking about at the time. and the plaintiffs say that the way the. chronology ultimately played out the way. things ended up unfolding validates. their accusation. what we know is that the newer version. of the drug sat on a shelf for years. despite those early signs that it might.

turn out to be safer for some patients. Gilead kept selling the older version it. became a blockbuster bringing in. billions of dollars and keeping millions. of patients alive. and then in 2010 Gilead decided to. resurrect the newer version of the drug. they did the clinical trials they went. through the regulatory process and they. released it in 2015. so they followed through on their plan. to extend the patent the one they talked.

about in the documents it appears that. way now Gilead said this had nothing to. do with following through on any sort of. patent extension strategy they said the. reason they changed their mind about. whether the newer drug made sense to. move forward with is it the situation. for patients had changed by then one. consideration was that long-term HIV. survivors were getting older they were. more susceptible to Bone and kidney.

problems and it made sense to have a. safer option for them. and when the newer version came out. Gilead positioned it as just as. effective as Truvada but gentler on the. bones and kidneys in other words it. doesn't have the same side effects David. suffered from. so when the patent on the older version. expired in 2017 and Drug makers offering. generic versions were able to come in.

with their own products the price of. Truvada ultimately went way down from. about twenty two thousand dollars a year. to under 400 a year. but Gilead successfully switched a lot. of patients from the older version to. the newer version and those patients are. still exposed to the higher price that's. a sticker price of twenty six thousand. dollars a year and the switch to the. newer version was really really. successful today Gilead drugs containing.

the newer version account for half the. market for HIV treatment and prevention. [Music]. and it makes sense that people switched. over right because this new version of. the drug has fewer side effects. well it's a little more complicated. actually the newer version doesn't have. the old side effects but it does have. its own side effects it can cause weight. gain and elevated cholesterol levels in.

some patients. so I think the reality is that the older. version is safer for some patients and. the newer version is safer for other. patients but the lawyers in David's case. say that if both versions of the drug. had been available on the market at. least patients and their doctors would. have had the option to choose which. version would best suit their needs. based on those risks so you might switch. patients who were experiencing kidney.

and Bone issues over to the newer. version okay so whatever the motive what. happened in the end was that the company. did make enormous profits because the. release of the new drug ended up being. perfectly timed right so how common is. this like is this a strategy that you. see a lot in the pharmaceutical industry. so under the current system there are a. ton of complicated ways that companies. essentially extend their monopolies and.

maximize their profit sets so the. phenomenon that we saw play out with. Gilead's versions of tenafavir is called. Product hopping and that's because. you're hopping patients from the older. version of the drug over to the newer. version of the drug just before the. patent for the older drug runs out but. there are other common strategies too. one is called patent thickening patent. thickening that's right the idea here is. to file so many patents on all sorts of.

things the dosage the delivery method. even things like a safety program to. ensure that the drug is safely. distributed and the idea is to make it. as hard as possible for generic. competitors to find their way through. like a Thicket it's hard to navigate a. Thicket like a thick and actual Thicket. of patents that's right the idea is that. it's so costly so time consuming for a. smaller company to Wade through that. Thicket of patents that they might give.

up they might decide it's too risky that. they would face lawsuit or not be able. to keep the product on the market. and companies do all sorts of things to. try to fight off generic competition. they'll reach deals with generic. competitors to minimize the impact of. generic competition or sometimes sue. them claiming that companies are. infringing on their patents. so these strategies you're describing.

they don't seem to have that much to do. with creating new treatments they see. more about using pretty powerful legal. and financial muscles to flood the Zone. in a way that blocks competition but in. the case of Gilead and tenafavir that. meant not just blocking another company. from entering the market but actually. hitting pause on developing a new drug. their own drug that could be less. harmful that feels ethically squishy. that's right there are definitely legal.

questions here but there's also an. ethical question oftentimes when you see. product topping there's not a ton of. consequence about when the newer version. is released oftentimes it's even. criticized for being a tiny tweak. something that isn't important something. that doesn't improve outcomes doesn't. improved quality of life for patients. but I think what's distinctive about. this case is the allegation that the.

timing of the release of the newer. version of the drug resulted in harm to. patients the mistakes here had an impact. for Patients health not only for their. pocketbooks right and I think that's one. of the questions that's going to be. addressed as the courts decide whether. or not these lawsuits can move forward. but it seems like the argument both in. court but also ethically rests on. whether Gilead way back in the early.

2000s actually knew that this newer drug. would come out ahead when weighing the. pros and cons they had reason to believe. it might turn out to be gentler on the. bones and kidneys but it was still. really early days in the research so you. could at the time reasonably conclude. that the signal just wasn't strong. enough for Gilead to have an ethical. imperative to put the drug on a fast. track yeah that's really the question. isn't it how much evidence was enough.

evidence for gilia to have a. responsibility to move the drug forward. so what kind of impact could a decision. in this case have so Gilead's lawyers. say in legal filings that this could set. a dangerous precedent this argument that. the plaintiff's lawyers are making. they're saying that if any company can. be held liable for not releasing a. product on a specific timetable that. could jeopardize Innovation and the.

concern here is that if drug companies. could be sued for not releasing products. immediately. then they would be less likely to take. the risks spend huge amounts of money to. run clinical trials if they could get in. trouble if they didn't get the timing. just right right I mean when you think. about it it is kind of strange like a. court ordering a company to release its. product before it wants to exactly for.

instance you probably wouldn't see apple. being held liable for not really saying. its latest iPhone quickly enough and I. think there's precedent in past cases. suggesting Gilead has a pretty strong. defense here you know when these sorts. of patent strategies are challenged in. court drug companies often end up. winning. on the other hand this isn't an iPhone. it's a drug right kind of different. category right the critics here of.

Gilead say that drugs can't be treated. like other products that it's a matter. of life and death not just a question of. when people get the newest version of. the iPhone. so is there a way to change the. incentives for companies. well one Avenue is cases like David's. which could set a precedent for Better. or For Worse depending on your. perspective we'll see how that plays out. in the courts. but as for policy changes Federal. lawmakers regularly introduce bills that.

aim to crack down on various aspects of. patent gaming but those haven't gained. much traction so far and there are lots. of reasons for that the industry lobbies. hard against regulation. but another consideration is that policy. makers are worried about interfering. with the system that we have set up the. system that in a lot of cases has been. extraordinarily successful at producing. breakthrough Therapies. and I think this is what is so hard.

about regulating the pharmaceutical. industry. we want to strike a balance between the. benefits the system brings and the ways. that it can sometimes harm patients you. know we don't want to create incentives. that discourage companies from coming up. with breakthrough therapies we want to. create the space where companies will. take the risks to bring the next Truvada. to Market but we also don't want to have. a system where companies prioritize. profits over patients where safer.

medications get delayed for business. reasons and patients suffer we want to. discourage companies from gaming the. system. [Music]. Rebecca thank you thank you. [Music]. we'll be right back.

here's what else you should know today. the Biden Administration announced it. would prohibit Drilling in 13 million. Acres of the National Petroleum reserve. and cancel all existing leases in the. Arctic National Wildlife Refuge it was. Biden's most aggressive move yet to. protect millions of Acres of pristine. Alaskan Wilderness from oil and gas. exploration but it would not stop the. enormous Willow oil drilling project in.

the same vicinity that Biden approved. earlier this year and that climate. activists oppose. and. the special counsel investigating Hunter. Biden said on Wednesday that he planned. to indict the president's son on a gun. charge before the end of the month in a. three-page update filed in federal court. in Wilmington Delaware David Weiss laid. out plans to bring charges related to. Biden's purchase of a pistol in 2018. when prosecutors say he lied on a.

Federal Form by stating that he was not. using drugs at the time. the move was prompted by the acrimonious. collapse of a plea deal between Biden. and federal prosecutors in July. today's episode was produced by Eric. kromke and will Reed it was edited by. Liz o'balen and Paige cowet fact checked. by Nicole pasulka and Susan Lee contains.

original music by Rowan nimisto Dan. Powell Alicia and Marian Lozano and was. engineered by Alyssa Moxley our theme. music is by Jim brunberg and Ben. lansberg of wonderly special thanks to. Cheryl stolberg. [Music]. [Music]. thank you. that's it for the Daily I'm Sabrina.

tavernice. see you tomorrow. [Music].