9. Patent Right$

Hepatitis C is a stealthy blood-borne disease, displaying no visible symptoms for years, while insidiously destroying the liver over time. The Hepatitis C virus (HCV) causes inflammation of the liver, and can lead to serious liver damage such as scarring (cirrhosis), liver cancer, and liver failure. For about 80% of those infected, Hepatitis C becomes a chronic condition. According to the Centers for Disease Control and Prevention, approximately 3.2 million people in the United States have chronic Hepatitis C; the World Health Organization estimates that between 130 and 150 million people are currently infected with chronic Hepatitis C worldwide. Unlike Hepatitis A and Hepatitis B, there is no vaccine for Hepatitis C.

The traditional course of treatment for Hepatitis C lasts up to 48 weeks, with a drug cocktail that includes interferon or ribavirin. From 10-50% of those treated with the cocktail benefit. For some, the progression of the disease is slowed. For others, a cure is effected, with HCV no longer detectable in the blood, due either to the drugs or spontaneous viral clearance. Even those who benefit, however, almost universally suffer debilitating side effects from interferon or ribavirin. Additionally, any liver damage remains.

Created by Gilead Sciences, Inc.,SovaldiTMreceived a US Food and Drug Administration (FDA) Priority Review and Breakthrough Therapy designation. This designation is granted when a new drug demonstrates a significant improvement over other therapies in at least one aspect of treatment outcomes. In this way, a promising drug can move more quickly to market.SovaldiTMevidenced several improvements over the standard treatment: reduction of treatment time to twelve weeks, reduction or elimination of interferon for most patients, and a cure rate of up to 90%. On December 6, 2013, the FDA approvedSovaldiTMfor treatment of chronic Hepatitis C.

Despite its efficacy, access toSovaldiTMis limited by its price.It is most expensive in the U.S. where drug companies determine the price for their products.At $1000.00 per pill, the twelve- week course of treatment costs $84,000. Many insurers are unwilling to addSovaldiTMto their formularies because of the sheer number of those with Hepatitis C.Express Scripts, thecountry'slargest pharmacy benefit manager, tried for a year to negotiate with Gilead for discounts, but to no avail. Stating thatGilead'sprice was too high. Express Scripts no longer includes SovaldiTM

in its formulary, including instead a less expensive drug from AbbVie that was recently approved by the FDA.

Gilead announced that it would allow pharmaceutical companies in 91 developing countries to make low-cost versions ofSovaldiTM.Still, affordability remains an issue, even when Gilead offers deep discounts. For example, although Gilead offered India a 99% discount, the $840 cost of treatment exceedsIndia'sper capita annual income ($616 in 2012). In January2015, India'spatent office denied patent protection toSovaldiTM,stating that the drug did not evidence an improvement over existing treatments. The decision allows local pharmacists to make cheaper generic versions of the drug.

Some accuse Gilead of making a cost-prohibitive drug that sick people desperately need. Dr. Andrew Hill of Liverpool University estimates that the cost of producingSovaldiTMis somewhere in the range of $68-$136 per pill. Critics note thatSolvadiTMbrought Gilead over $10 billion in its first year on the market.

Others defendGilead'sactions. Pharmaceutical companies like Gilead make and bring new drugs to market. Research, development, and clinical trials are expensive, and drug companies need to be able to profit from their efforts. A 2013 study by Forbes places the cost at about $5 billion for each new drug that comes to market, a cost that reflects the failure of 95% of experimental drugs for reasons either of safety or effectiveness. Profits provide incentive for further research and development. Companies have an obligation to provide return on their investment to shareholders. Supportersof Gilead'spricing policy point out that even at $84,000 for a course of treatment, the cost savings compared with a lifetime of traditional treatment are significant.SovaldiTMcosts significantly less than a liver transplant or treating complications of liver failure.

Critics express a further concern. They worry that a black market will develop forSovaldiTM,both within individual countries and internationally, with people from countries whereSovaldiTMcosts more buying the drug from countries where the cost is less.

Read very carefully the Patent Right$

You are the executive assistant to the CEO of Gilead sciences. You are concerned with the growing conflicts between your company and the activist groups that advocate for the authorization of generic medicinal products. They claim that hundreds of thousands of patients are dying every year because they cannot afford their treatment. On the other side, Gilead sciences has spent millions of dollars on research and development of new drugs. If generic medicines are allowed, Gilead sciences will not be able to obtain their profits required to continue with its research.

The CEO of Gilead Sciences ask you to make a report in which you address the following concerns:

1 - Does Gilead Sciences have moral obligations to people who need its medicines to survive? Why? Which? You must justify your answer using at least one normative ethical theory.

2 - What are the opportunities of the conflicts with the activist groups? Could you use the conflict to promote moral values in your company? How?

3 - design a plan of negotiation with the most influential groups that promote the use of generic medical products.