The patent protecting Gilead Sciences Inc.'s HIV and hepatitis B drug Viread has been revoked by China officials.
The move, explained BioWorld, gives China greater leverage in ongoing negotiations with drug companies around pricing. For Gilead, it is another strike against Viread, which also has had its patent protection reversed in India and Brazil.
"It is a fairly groundbreaking decision," China health analystRobert McTiernan of IHS Healthcare told BioWorld. "The big trend is that (China wants) pharma companies to be more flexible on pricing. They will likely be able to use this decision to negotiate lower prices on more drugs."
Viread, which is Foster City-based Gilead's (NASDAQ: GILD) third best-selling drug, costs 1,470 yuan, or about $240, a hefty price for most Chinese.
Gilead is led by Chairman and CEO John Martin.
Taking away Viread's patent would open the door for its active ingredient, tenofovir, to be made generically at a time when international aid organizations are cutting grants to China for fighting the AIDS virus.
Aunisco, a major Chinese manufacturer of active pharmaceutical ingredients in China, had challenged Gilead's patent, BioWorld reported. It wants to sell the drug in China and export it to countries where it is not patented.
Viread registered first-half sales of $460.5 million, 57 percent of that coming from outside the United States.
GlaxoSmithKline plc (NYSE: GSK) markets and sells Viread in Asia.
Ron Leuty covers biotech, higher education and China for the San Francisco Business Times.