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Hiv Prevention Drug: Billions in Corporate Profits After Millions in Taxpayer Investments

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Hiv Prevention Drug: Billions in Corporate Profits After Millions in Taxpayer Investments HIV PREVENTION DRUG: BILLIONS IN CORPORATE PROFITS AFTER MILLIONS IN TAXPAYER INVESTMENTS HEARING BEFORE THE COMMITTEE ON OVERSIGHT AND REFORM HOUSE OF REPRESENTATIVES ONE HUNDRED SIXTEENTH CONGRESS FIRST SESSION MAY 16, 2019 Serial No. 116–24 Printed for the use of the Committee on Oversight and Reform ( Available on: http://www.govinfo.gov http://www.oversight.house.gov http://www.docs.house.gov U.S. GOVERNMENT PUBLISHING OFFICE 36–660 PDF WASHINGTON : 2019 COMMITTEE ON OVERSIGHT AND REFORM ELIJAH E. CUMMINGS, Maryland, Chairman CAROLYN B. MALONEY, New York JIM JORDAN, Ohio, Ranking Minority Member ELEANOR HOLMES NORTON, District of JUSTIN AMASH, Michigan Columbia PAUL A. GOSAR, Arizona WM. LACY CLAY, Missouri VIRGINIA FOXX, North Carolina STEPHEN F. LYNCH, Massachusetts THOMAS MASSIE, Kentucky JIM COOPER, Tennessee MARK MEADOWS, North Carolina GERALD E. CONNOLLY, Virginia JODY B. HICE, Georgia RAJA KRISHNAMOORTHI, Illinois GLENN GROTHMAN, Wisconsin JAMIE RASKIN, Maryland JAMES COMER, Kentucky HARLEY ROUDA, California MICHAEL CLOUD, Texas KATIE HILL, California BOB GIBBS, Ohio DEBBIE WASSERMAN SCHULTZ, Florida RALPH NORMAN, South Carolina JOHN P. SARBANES, Maryland CLAY HIGGINS, Louisiana PETER WELCH, Vermont CHIP ROY, Texas JACKIE SPEIER, California CAROL D. MILLER, West Virginia ROBIN L. KELLY, Illinois MARK E. GREEN, Tennessee MARK DESAULNIER, California KELLY ARMSTRONG, North Dakota BRENDA L. LAWRENCE, Michigan W. GREGORY STEUBE, Florida STACEY E. PLASKETT, Virgin Islands RO KHANNA, California JIMMY GOMEZ, California ALEXANDRIA OCASIO-CORTEZ, New York AYANNA PRESSLEY, Massachusetts RASHIDA TLAIB, Michigan DAVID RAPALLO, Staff Director ALI GOLDEN, Chief Health Counsel ELISA LANIER, Director of Operations and Chief Clerk CHRISTOPHER HIXON, Minority Chief of Staff CONTACT NUMBER: 202-225-5051 (II) CONTENTS Page Hearing held on May 16, 2019 ............................................................................... 1 WITNESSES Dr. Robert M. Grant, Professor of Medicine, University of California, San Francisco Oral Statement ................................................................................................. 4 Dr. Rochelle Walensky, Professor of Medicine, Harvard Medical School, and Chief of Division of Infectious Diseases, Massachusetts General Hospital Oral Statement ................................................................................................. 6 Mr. Tim Horn, Director, Medication Access and Pricing, NASTAD Oral Statement ................................................................................................. 8 Mr. Stephen Ezell, Vice President, Global Innovation Policy, Information Technology and Innovation Foundation Oral Statement ................................................................................................. 9 Dr. Aaron Lord, PrEP Patient and Advocate Oral Statement ................................................................................................. 11 Daniel O’Day, Chairman and CEO, Gilead Sciences, Inc. Oral Statement ................................................................................................. 13 The written statements of the witnesses are available at: https:// docs.house.gov. INDEX OF DOCUMENTS The documents entered into the record during this hearing are listed below, and are available at: https://docs.house.gov. * Statement from New York City Council Speaker Corey Johnson; sub- mitted by Ms. Ocasio-Cortez. * Yale Global Health Justice Partnership Statement dated 3-12-19; sub- mitted by Ms. Ocasio-Cortez. * Peer Review Article from the New England Journal of Medicine dated 12-30-10; submitted by Mr. Jordan. * Washington Post Article from July 13, 2016, ″The Drug Company that shocked the world with its prices dodged $10 billion in taxes, report says;″ submitted by Ms. Hill. * Letter from the Treatment Action Group; submitted by Mr. Cummings. * Letter from the AIDS Vaccine Advocacy Coalition; submitted by Mr. Cummings. * Letter from the HIV Medicine Association; submitted by Mr. Cummings. * Questions for the Record; submitted to Mr. O’Day. * Statement for the Record; submitted by Mr. Connolly. (III) HIV PREVENTION DRUG: BILLIONS IN CORPORATE PROFITS AFTER MILLIONS IN TAXPAYER INVESTMENTS THURSDAY, MAY 16, 2019 HOUSE OF REPRESENTATIVES COMMITTEE ON OVERSIGHT AND REFORM Washington, D.C. The committee met, pursuant to notice, at 10:06 a.m., in room 2154, Rayburn House Office Building, Hon. Elijah Cummings (chairman of the committee) presiding. Present: Representatives Cummings, Maloney, Norton, Connolly, Krishnamoorthi, Raskin, Rouda, Hill, Sarbanes, Welch, Speier, Kelly, DeSaulnier, Khanna, Gomez, Ocasio-Cortez, Pressley, Tlaib, Jordan, Amash, Foxx, Meadows, Hice, Grothman, Comer, Higgins, Norman, Roy, Miller, Armstrong, and Steube. Chairman CUMMINGS. The committee will come to order. Without objection, the chair is authorized to declare recess of the committee at any time. I now recognize myself for five minutes to give an opening state- ment. Today is our committee’s second hearing on the skyrocketing prices of prescription drugs. At our first hearing in January, the committee’s very first witness, Ms. Antoinette Worsham, she was a compelling witness. Her 22-year-old daughter died because she could not afford the insulin she needed to control her diabetes. By the way, the insulin cost $333 a month. Let that sink in. For $333 a month, a 22-year-old college graduate died. Ms. Worsham’s testi- mony was gut-wrenching, but unfortunately, she is not alone. We’ve heard other stories just like hers from our constituents, our friends, and our loved ones. Today, we are examining the price of a drug called Truvada. Truvada is a phenomenal drug that prevents the transmission of HIV through a treatment called preexposure prophylaxis or PrEP for short. At the outset, I want to recognize the efforts of our distinguished colleague, Congresswoman Ocasio-Cortez. She has been leading the charge on this issue, and it is because of her efforts that we are holding this hearing today. I want to thank her for her phenomenal leadership. Think about this: We now have a drug that has the potential to end the HIV epidemic. This would have been unfathomable at the height of the HIV/AIDS crisis. This is an issue that I have been dealing with and working with communities on for more than 20- (1) 2 some years. I have seen many people die. I have seen people who used to be on the choir at my church die. I have seen neighbors die. And we have made these phenomenal strides. But this treatment was developed as a result of investments made by the American taxpayers through the National Institutes of Health and the Centers for Disease Control and Prevention. The problem is that Gilead, the company that now sells this drug, charges astronomical prices. When Truvada was first approved in 2004, Gilead charged about $800 per month, again, for this life- saving drug. Since then, Gilead raised the price of this drug over and over and over and over and over again. It now charges about $2,000 for just one month or about $70 per pill. Think about that, lifesaving drug. In the same period, Gilead has made massive windfalls on this treatment, more than $36 billion in revenues. Let me say that one more time. They made more than $36 billion on this drug alone. How can Gilead do this? How can our system allow a company to take a drug treatment that was developed with taxpayer funds and abuse this monopoly to charge such astronomical prices? This life- saving treatment would not exist but for the research funded by the CDC and NIH. So how can our system let a company charge prices that are so outrageous, making $36 billion while there are literally hundreds of thousands of people who need this drug? We are better than that. These are some of the hard questions we will ask Gilead’s CEO Daniel O’Day, who is here today. And I am praying that you do not come and give us the normal rope-a-dope stuff that we usually hear about the various low programs you have got, the coupons you have got. We want the prices to come down. We want truth. We want to know why it is that the prices are going up astronomically. We want to know what this R&D is all about. We want to know if it is all about vacation, giving doctors vacations and encouraging them to prescribe certain things or not. We need to know all about that. We appreciate that Mr. O’Day accepted our invitation to partici- pate, and we anxiously look forward to his testimony. The reason this is so critical is because the CDC estimates that there are 1.1 million people at high risk of contracting HIV who could benefit from this drug but that only a fraction, a fraction are getting it. Use is shockingly low among groups that are at particu- larly high risk, including communities of color that have been dis- proportionately impacted by this epidemic. This treatment is available in other countries for much, much less. In Australia, patients pay less than $7 a pill. Hello? Here, we are paying well over $70. In other countries, patients pay even less. This is because Gilead charges less for its treatment overseas than it does in the United States. It is also because Gilead has generic competitors there but not here. Finally, let me note that this is a bipartisan issue. HIV has no boundaries. It affects blacks and whites, rural, urban. It is a tough disease. President Trump recently announced an initiative to end the HIV epidemic within 10 years. This is a laudable goal. How- ever, it relies on this particular drug treatment getting
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