Company is launching generic hepatitis C drugs ten years before patents expire.

Generic versions of patented drugs are generally avoided as long as possible – and often their introduction is fought over in the courts to delay undesired competition. So Gilead’s announcement that it will be launching its own generic versions of two of its blockbuster hepatitis C drugs ten years before the patents expire is out of the ordinary. 

Why would the company, through its subsidiary Asegua Therapeutics, launch authorized generics at $24,000 compared to $74,760 and $94,500 for its name-brand drugs Epclusa and Harvoni, respectively? The two drugs were highly successful when first introduced in 2014 and 2015, but have since then been fighting growing competition from newer drugs and decreasing net prices (down 60% or so) demanded by insurers. In addition, the drugs cure hepatitis C, so the patient pool is decreasing as well. 

The company hopes, according to CEO John Milligan, that it may actually increase sales of its hepatitis C drugs through this move. Gilead will be making a similar amount from the sales of the generics as it does the discounted branded drugs, but patients will save up to $2,500 per treatment course, thus lowering their out-of-pocket costs. Government payers may also be more likely to support use of the generics, providing potential sales to people insured by Medicaid.