RESOLVED that shareholders of Gilead Sciences Inc. (“Gilead” or the “Company”) ask the Board of Directors to report to shareholders, at reasonable expense and omitting confidential and proprietary information, on whether and how Gilead’s receipt of government financial support for development and manufacture of therapeutics for COVID-19 is being, or will be, taken into account when making decisions that affect access to such products, such as setting prices.

SUPPORTING STATEMENT

Gilead benefited from substantial government funding in developing its antiviral drug remdesivir. Government-conducted and -funded research was essential to the identification of remdesivir’s precursor as having activity against the Ebola virus, the refinement of that precursor into remdesivir, and the discovery of remdesivir’s activity against coronaviruses in the same genus as the virus that causes COVID-19.[1] This early work was critical in enabling Gilead’s rapid identification of remdesivir as a potential therapy for COVID-19.

Gilead received emergency use authorization for remdesivir to treat COVID-19 based on a federally-funded clinical trial showing that it shortened time to recovery in some patients and received full approval based in part on the same research.[2] Federally-funded trials continue to test the efficacy of remdesivir in combination with numerous other drugs to treat COVID-19.[3]

Gilead has priced a course of remdesivir treatment at $3,120 for insured U.S. patients. That move led 34 attorneys general to protest in a letter to the heads of the Food and Drug Administration, Department of Health and Human Services and National Institutes of Health that high prices “will impede access to treatment in the U.S. and further strain state budgets.” The attorneys general urged the federal agencies to trigger the government’s statutory rights to force the holder of a patent developed with federal funding to license the technology to a third party because of Gilead’s failure to set a “reasonable price” or reasonably “alleviate [consumers’] health or safety needs.”[4] Similarly, 11 state Treasurers accused Gilead of “an opportunistic attempt to remarket an old drug at prices that are disconnected from economic reality.”[5] Complaints about impact on states’ fiscal health are reminiscent of objections to the high prices charged for Gilead’s hepatitis C treatments.

Gilead’s “Pricing and Patient Access” position states that “prices for medicines should reflect the research investment and development costs associated with bringing a therapy to patients, as well as the clinical value and medical innovation that new therapies represent.”[6] It is not clear whether how public contributions to those research development and development costs are considered as part of the price-setting process. Relatedly, Gilead has not specified the level of returns that is appropriate given those contributions. This Proposal seeks to fill these gaps by asking Gilead to discuss whether and how the significant public contribution does or will affect its analysis of those factors and decisions, including pricing, that could have an impact on access.

[1]  For this history, see https://www.keionline.org/wp-content/uploads/KEI-Briefing-Note-2020_1GS-5734-Remdesivir.pdf.

[2]  https://www.niaid.nih.gov/news-events/nih-clinical-trial-shows-remdesivir-accelerates-recovery-advanced-covid-19; https://www.politico.com/news/2020/10/22/fda-approves-remdesivir-coronavirus-431336

[3]  E.g., https://www.niaid.nih.gov/news-events/nih-clinical-trial-testing-antiviral-remdesivir-plus-anti-inflammatory-drug-baricitinib; https://www.niaid.nih.gov/news-events/nih-clinical-trial-testing-remdesivir-plus-interferon-beta-1a-covid-19-treatment-begins; https://www.niaid.nih.gov/news-events/nih-clinical-trial-testing-hyperimmune-intravenous-immunoglobulin-plus-remdesivir-treat

[4]  https://www.oag.ca.gov/system/files/attachments/press-docs/Remdesivir%20Letter%2020200804.pdf

[5]  https://patreasury.gov/pdf/newsroom/Gilead-Sciences-Letter_Redacted.pdf

[6]  https://www.gilead.com/~/media/Files/pdfs/Policy-Perspectives/Product%20Pricing%20and%20Patient%20Access.pdf