Gilead sues Russia: Private company challenges a country’s right to protect public health

In January this year, the Russian Federation took decisive action, to put public health before the profit of private companies, by issuing a compulsory license on remdesivir, in order to be able to procure more affordable generic versions. Despite this being Russia’s legitimate right, as it is for all World Trade Organization (WTO) members, Gilead Sciences has filed a lawsuit against this action, in Russia’s Supreme Court.

Moscow, Russia: Three ambulances on duty during the COVID-19 pandemic. © via iStock

Remdesivir has shown to have some efficacy in the treatment of COVID-19 according to some studies. It is available for compassionate use in many countries. Other trials suggest that remdesivir has “little or no effect on mortality in patients who are hospitalised with COVID-19” (Solidarity trial). A round-up of research findings is available here.

Regardless, the step taken by Russia sets a precedent in the country. It was the first health-related compulsory license (CL) issued by the Federation. It sets a path, not just for Russia, but for other countries in the region, for governments to no longer accept arbitrarily high prices set by monopoly holders, which prevent people from accessing the best healthcare they need.

Gilead’s version of remdesivir is overpriced. The company charges $2,340 (USD) for a 5 day course. Prices offered by generic companies vary between $229 to $960 for the same treatment course.

The first court hearing is scheduled for 27 May 2021.

“The court must uphold the action taken by the Russian Prime Minister. Not only is a compulsory license permitted under the TRIPS Agreement, but just this month (13 April 2021) Russia’s parliament voted to enshrine the use of CLs in the interests of public health into law,” says Denis Godlevskiy, regional coordinator for ITPCru – Treatment Preparedness Coalition in Eastern Europe and Central Asia (EECA).

“These two actions combined send a clear signal to all pharmaceutical companies that Russia will not be ‘ripped off’. It is unacceptable to bow down to the pricing demands of pharma companies. In this case Gilead has overinflated its prices, and then when the right action was taken, the company has decided to fight back, knowing that it is in the wrong, but presumably hoping to stamp out this important precedent by throwing money at legal teams. Civil society will fight this. We may not have the ill-gotten financial means that Gilead has, but we have the law and the right to protect public health on our side,” concludes Godlevskiy.

According to the current version of Article 1360 of the Civil Code of the Russian Federation, the government has the right, in the interests of defense and security, to authorize the use of an invention without the consent of the patent holder, with notification as soon as possible, and with payment of proportionate compensation.

The current patent system doesn’t work

Gilead’s decision to challenge a CL is more evidence that the current patent system doesn’t work. CLs are a flexibility included in the TRIPS Agreement.

One of the arguments put forward by the pharma industry not to agree to waiving intellectual property (IP) protection on COVID-19 vaccines, treatments and related products, is because the flexibilities, such as CLs, already allow countries to protect public health.

The existing TRIPS flexibilities, like CLs, remain country-specific and inadequate to address this unprecedented pandemic. Gilead’s pushback shows that pharma companies will attest to supporting equitable access and good public health outcomes on one hand, while on the other, doing everything to deter countries from using their rights.

It is not the first time Gilead has sought to profiteer from this pandemic.

Back in March 2020, at the start of the pandemic, the company applied for orphan drug status on remdesivir.

The ‘orphan’ status is usually reserved for drugs that treat rare diseases and was only a possibility for Gilead at that time because COVID-19 cases were still low at that point in time. Gilead – and the rest of us – could easily predict that cases would rise; that the drug, already declared as a ’possible’ treatment for COVID-19 was soon going to be in huge demand.
Had Gilead been successful the orphan status would have granted it seven years of market exclusivity – preventing generic challengers. Pressure from activists and public outrage made the company quickly rescind its decision.

Even during a pandemic, a company with billions of dollars in revenue each year still demonstrated a lack of integrity by actively seeking out a loophole that would allow it maximise profits.

“Gilead is not alone in acting in this way. The pharma industry is renowned for putting profit above all else, which is why the steps that Russia has taken must be protected.
It is essential that the court rules in the government’s favour, otherwise it sends a signal to company that they have more power to decide to what happens in a country than the country itself. This is absurd. If the court ruled in Gilead’s favour, it would be saying that shareholders’ bank balances are more important than people’s lives,” says Sergey Golovin, Make Medicines Affordable coordinator for EECA at ITPCru.

Read more about the story in Russian here.