[January 17, 2013]

AHF: Gilead's Record 76% Profit Margin Squeezes Taxpayer-Funded AIDS Programs

According to a stock buy recommendation from New York-based stock analyst group TheStreet Ratings released this week, pharmaceutical giant Gilead Sciences (GILD) shows first quarter earning increases compared to this time last year across the board that exceed industry averages by a large margin. Leading global nonprofit AIDS Healthcare Foundation (AHF) contends these record earnings come at the expense of patients who cannot access treatment for HIV/AIDS due to Gilead's price gouging.

TheStreet reported Gilead's closing stock price has jumped 76.13% compared to its closing price one year ago, and the group expects the price to rise even higher. Additionally, the group said Gilead's gross profit margin is "currently very high" at 76.90%, another increase from the same quarter last year. Additionally, the company's net profit margin of 27.83% exceeds industry averages. Gilead's revenue growth was up 14.4% from this time last year and again outpaces the industry average growth of 5.4%.

"AHF has repeatedly criticized Gilead and its CEO John Martin - whose income last year was $54 million - for price gouging on its HIV/AIDS treatments, an action that places the drugs out of reach for many patients due to increases in healthcare costs trickling down to government programs and insurers such as Medicare and Medicaid as well as private insurers and programs like the AIDS Drug Assistance Program," said Michael Weinstein, President of AIDS Healthcare Foundation.

Stribild, Gilead's four-in-one combination pill that was approved by the ood and Drug Administration in early September of last year, is the most expensive AIDS first line treatment on the market today at $28,500 per patient, per year, which was 35% higher than the price of their best-selling treatment at that time and is more than most HIV/AIDS patients earn annually.

Already this year, on January 1, Gilead raised the prices of four key AIDS medications by an average of 6%, including the price of Atripla, its best-selling three-in-one combination treatment, the price of which was increased by 6.9% to a Whole Acquisition Cost (WAC (News - Alert)) of $1,878.23 per patient, per month. The other three HIV/AIDS medications that saw price hikes are Complera, which was raised by 5.8% to a WAC of $1,936.53; Emtriva, by 5.5% to a WAC of $478.45; and Viread, by 6% to a WAC of $771.39.

A new study released this week in the Annals of Internal Medicine compared the potential economic savings of using generic antiretroviral treatment instead of branded medication like Atripla to the possible reduction in drug efficacy, caused largely by the increase in pill burden that threatens to knock patients off their medical regimen with missed doses.

Though the study found the increased pill burden - requiring patients to take two or three pills daily instead of the all-in-one combinations sold by Gilead - could lead to a potential loss of 4.4 months of life per patient per lifetime, the projected economic savings exceeded a billion dollars in annual healthcare costs. The more affordable generic treatment options are the same medications that have been keeping people living with HIV/AIDS alive in Africa and developing countries like India for decades, as pointed out by AHF President Michael Weinstein in a press statement earlier this week.

"The savings could be as much as one billion dollars per year here in the United States, while the efficacy decreased relatively slightly when using generics," Weinstein said. "Now that Gilead's patents on many key drugs are expiring, the company must lower its prices of drugs like Atripla, Stribild-a four-in-one combination that actually relies on several older Gilead drugs that were otherwise approaching end of patent. In addition, we strongly believe that local, state, and federal governments should use every tool at their disposal to bring down drug prices. As tax dollars ultimately pay for most of these drugs, we extend our call on Gilead for price concessions on these AIDS drugs."

About AIDS Healthcare Foundation

AIDS Healthcare Foundation (AHF), the largest global AIDS organization, currently provides medical care and/or services to more than 183,000 individuals in 28 countries worldwide in the US, Africa, Latin America/Caribbean, the Asia/Pacific Region and Eastern Europe. To learn more about AHF, please visit our website: www.aidshealth.org, find us on Facebook (News - Alert): www.facebook.com/aidshealth and follow us on Twitter (News - Alert): @aidshealthcare.

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