U.S. GOVERNMENT PUBLISHING OFFICE

36–660 PDF WASHINGTON : 2019

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 
(II) 

COMMITTEE ON OVERSIGHT AND REFORM 

ELIJAH E. CUMMINGS, Maryland, Chairman 

CAROLYN B. MALONEY, New York 

ELEANOR HOLMES NORTON, District of 

Columbia 

WM. LACY CLAY, Missouri 

STEPHEN F. LYNCH, Massachusetts 

JIM COOPER, Tennessee 

GERALD E. CONNOLLY, Virginia 

RAJA KRISHNAMOORTHI, Illinois 

JAMIE RASKIN, Maryland 

HARLEY ROUDA, California 

KATIE HILL, California 

DEBBIE WASSERMAN SCHULTZ, Florida 

JOHN P. SARBANES, Maryland 

PETER WELCH, Vermont 

JACKIE SPEIER, California 

ROBIN L. KELLY, Illinois 

MARK DESAULNIER, California 

BRENDA L. LAWRENCE, Michigan 

STACEY E. PLASKETT, Virgin Islands 

RO KHANNA, California 

JIMMY GOMEZ, California 

ALEXANDRIA OCASIO-CORTEZ, New York 

AYANNA PRESSLEY, Massachusetts 

RASHIDA TLAIB, Michigan 

JIM JORDAN, Ohio, Ranking Minority Member 

JUSTIN AMASH, Michigan 

PAUL A. GOSAR, Arizona 

VIRGINIA FOXX, North Carolina 

THOMAS MASSIE, Kentucky 

MARK MEADOWS, North Carolina 

JODY B. HICE, Georgia 

GLENN GROTHMAN, Wisconsin 

JAMES COMER, Kentucky 

MICHAEL CLOUD, Texas 

BOB GIBBS, Ohio 

RALPH NORMAN, South Carolina 

CLAY HIGGINS, Louisiana 

CHIP ROY, Texas 

CAROL D. MILLER, West Virginia 

MARK E. GREEN, Tennessee 

KELLY ARMSTRONG, North Dakota 

W. GREGORY STEUBE, Florida 

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 
(III) 

C O N T E N T S 

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; submitted by Ms. Ocasio-Cortez. 

* Yale Global Health Justice Partnership Statement dated 3-12-19; submitted 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. 

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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 statement. 

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 testimony 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- 
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 lifesaving 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 lifesaving 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 participate, 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 particularly high risk, including communities of color that have been disproportionately 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. However, it relies on this particular drug treatment getting to everyone 

who needs it. Gilead recently agreed to donate millions of bottles 
3 

of its drugs but far short of what we need to save lives. Without 

addressing the fundamental problem of pricing, I am afraid that we 

simply may not get there. 

And so we want to work with the President in addressing HIV, 

but we need to start right here, and we need to start right now. 

Chairman CUMMINGS. So without further do, I want to recognize 

the distinguished ranking member Mr. Jordan for his comments. 

Mr. JORDAN. Mr. Chairman, welcome back, and thank you for 

that and for this important hearing. 

At the beginning of the HIV outbreak in the early 1980’s, the 

outlook was just not good. In fact, it was pretty darn bleak. Early 

treatments were expensive and frankly not very effective, but advancements in medicine in the 38 years since the first reported incidence of AIDS in the United States have yielded hope for those 

afflicted with this virus. The most important development was 

Gilead creating and bringing Truvada to market in 2004. 

Because of the invention of this, life expectancy for people with 

HIV is now effectively the same as life expectancy for people without it. I think we can all agree that Truvada is something of a miracle drug. It is the gold standard for preventing and treating HIV. 

Gilead’s invention has been literally lifesaving. 

Gilead of course made money based on its invention. My colleagues on the other side of the aisle and some of the witnesses 

they have invited seem to believe this is some sort of conspiracy. 

Rather than applaud Gilead for manufacturing this miracle drug, 

they wish to demonize a company for making a profit. The right to 

reap the rewards of your invention is so vital that our Framers included it in the Constitution. Our intellectual property protections 

are the crown jewel of the American economy and what makes our 

Nation the most innovative in human history. Article 1, section 8, 

clause 8, the Congress shall have power, quote ‘‘to promote the 

progress of science and useful arts by securing, for limited times, 

to authors and inventors the exclusive right to their respective 

writings and discoveries.’’ The Framers knew that individuals 

would take risk and endeavor to make great things if they knew 

they would be rewarded. 

Some would have you believe that Gilead did not invent this 

drug or discover its uses and that the Federal Government has equities here for which the company is not accounting. The evidence 

does not bear this out, and I hope we can use today to set the 

record straight. I fear that my colleagues are using today’s hearing 

as a platform to strongarm private companies making breakthrough discoveries all because they are upset at how markets 

work. 

The reality is that, while Gilead has made money on this drug, 

there do not seem to be genuine issues of access, and that is largely 

due, as the chairman talked about, to progress made by efforts of 

the Trump administration. The State of the Union address this 

year, President Trump announced his administration’s initiative to 

eliminate new HIV infections in the U.S. within 10 years. This 

would be a remarkable breakthrough for public health. And to that 

end, just last week, HHS announced that, as a result of discussions 

between the Trump administration and Gilead, the company 

agreed to donate 2.4 million vials of its PrEP medication annually 
4 

to the CDC for distribution to treat individuals who are at risk and 

uninsured. The company has also agreed but was under no obligation to do so to allow generics to enter the market a year earlier 

to further help provide access. 

Of course the cost of pharmaceuticals is a problem driven many 

factors that our committee and the Trump administration hope to 

tackle in a bipartisan fashion, as the chairman indicated. But we 

will never make real advancements in public health if the plan is 

to use false pretenses to attack and vilify those that are making 

game-changing scientific breakthroughs. 

Thank you, Mr. Chairman. I look forward to the discussion from 

all our witnesses this morning, and I yield back. 

Chairman CUMMINGS. Thank you very much. 

I now want to welcome our witnesses. Dr. Robert Grant, professor of medicine at the University of California San Francisco, 

Dr. Grant led one of the clinical trials demonstrating that Truvada 

could be used to prevent the transmission of HIV; Dr. Rochelle 

Walensky, the chief of infectious diseases at Massachusetts General Hospital and professor of medicine at Harvard Medical School, 

who is an expert on cost-effectiveness in HIV treatment; Mr. Tim 

Horn, the director of medication access for the National Alliance of 

State and Territorial AIDS Directors, who has also worked in HIV 

treatment and advocacy; Stephen Ezell from the Information Technology and Innovation Foundation; Mr. Aaron Lord, a PrEP user 

and cofounder of PrEP4All. Dr. Lord’s personal experience led him 

to advocate on behalf of others, and we are glad to have him with 

us today. And finally, Mr. Daniel O’Day, chairman and chief executive officer of Gilead Sciences Inc. 

Now, if you all could please rise and raise your right hands, and 

I will now swear in the witnesses. 

[Witnesses sworn.] 

Chairman CUMMINGS. Thank you very much. Let the record show 

that the witnesses answered in the affirmative. 

You may be seated. The microphones are quite sensitive, so 

please speak directly into them. 

And without objection, your written statements will be made part 

of the record. 

With that, Mr. Grant, you are now recognized to give an oral 

presentation of your testimony. Please note that I would ask that 

all of you stay within the five-minute limit. 

And before you get started, Ms. Ocasio-Cortez, I mentioned before you got here that you were a main driver in making sure that 

this hearing happened today. I want to thank you for your leadership. 

All right. Dr. Grant. 

STATEMENT OF ROBERT M. GRANT, PROFESSOR OF 

MEDICINE, UNIVERSITY OF CALIFORNIA 

Dr. GRANT. Chairman Cummings—— 

Chairman CUMMINGS. Good morning. 

Dr. GRANT [continuing]. Ranking Member Jordan, and members 

of the House Committee on Oversight and Reform, I’m pleased to 

testify today on how the promise of PrEP remains unfulfilled. I devoted the last 20 years of my career to the development of PrEP. 
5 

I am here today at my own expense because I promised that PrEP 

would become available if proven. We have not kept that promise. 

I come today to ask for your help. 

My PrEP research was funded by grants from the NIH starting 

in 2002. I later received supplemental funding from the Bill and 

Linda Gates Foundation. Our research was funded—other research 

was funded by NIH, CDC, and Gates. The U.S. Government provided the majority of funds for PrEP research, investing hundreds 

of millions of taxpayer dollars. 

Furthermore, CDC scientists discovered that adding a drug 

called FTC to tenofovir increased protection, and it’s the combination of those two medications which is FDA-approved today. The 

CDC scientists also demonstrated that preexposure dosing added 

substantially to the protective events, and it’s these inventions that 

led to the CDC government patents that were awarded several 

years ago. 

Gilead did not provide leadership, innovation, or funding for 

PrEP research. Gilead’s role was limited to donating study drug 

and placebos. In my experience, Gilead proved to be a hesitant 

partner in PrEP research. For example, Gilead made public in 2005 

that it would not seek FDA approval for PrEP no matter what the 

data showed. 

Although not supporting the research with funding or innovation, 

Gilead took steps to limit research on alternative and competing 

PrEP agents. In particular, there was interest in 3TC, a competing 

drug because it was about to go off patent. Interest in 3TC PrEP 

dissipated with assurances that Gilead’s Truvada would be generically available by the time efficacy trials were completed. Eight 

years after the completion of U.S. Government-funded efficacy 

trials, generic Truvada is still not available in the United States. 

PrEP scale-up has failed. The PrEP demand in the U.S. hit a tipping point in 2013 and then plateaued in 2016. Currently, only 1 

in 10 people who could benefit from PrEP are receiving it. What 

little access has occurred is not fairly distributed. For example, 

black people suffer 44 percent of new HIV infections while only 10 

percent of PrEP users are black. Gilead has had seven years to get 

PrEP marketing right. It’s time we try something else. 

Our struggle against HIV is stuck. HIV is not stuck. HIV infects 

nearly 40,000 Americans every year, and there’s been no decline 

since 2016. In my experience, the root cause of low PrEP access is 

the high price. Other barriers to PrEP access arise as consequences 

of the exorbitant drug prices. These factors may include fragmented insurance coverage, lack of awareness by providers and potential users, and stigma. At a competitive price, people would feel 

at ease to provide and use PrEP. 

PrEP can be manufactured and distributed for $6 per person per 

month, $6 per person per month in manufacturing and distribution 

costs. Gilead charges more than $2,100 per person per month, a 

35,000 percent markup. Gilead’s prices continue to increase every 

single year. The price of Truvada increased 76 percent since I published evidence of PrEP efficacy in 2010 using U.S. Government 

funding. 

You might hear that no one pays list price. This is not true. The 

University of California Student Health Services pays full price for 
6 

PrEP, and it is their largest drug expense. All populations have 

multiple competing needs related to heart health, cancer prevention, mental health, substance use, productive health, and so much 

more. Should any public-health jurisdiction pay a 35,000 percent 

markup for a drug that addresses only one of these concerns? Hard 

choices have to be made in public health, and they are made. 

However, PrEP becomes an easy choice if it is available at a competitive market price. For example, three states and Australia purchased generic PrEP for $8 per person per month after a competitive process. That—what followed was the largest and fastest PrEP 

scale-up the world has ever seen. 

I believe that there are actions that you could take, that this 

committee could take at this time that would make PrEP available. 

PrEP continues to be underutilized despite seven years of drug donations, community grants, and assistance programs. A market 

price would change the game. I ask you to consider three actions. 

This committee could insist that taxpayers benefit from U.S. Government intellectual property. Second, you could scrutinize agreements between originator and generic manufacturers for anticompetitive practices such as pay for delay. I believe that these actions would take PrEP off the shelf and stop HIV at a price that 

we all can afford. 

Thank you. 

Chairman CUMMINGS. Dr. Walensky. 

T2STATEMENT OF ROCHELLE WALENSKY, PROFESSOR OF 

MEDICINE, HARVARD UNIVERSITY, ON BEHALF OF CHIEF OF 

DIVISION OF INFECTIOUS DISEASES, MASSACHUSETTS GENERAL HOSPITAL 

Dr. WALENSKY. Good morning. Chairman Cummings, Ranking 

Member Jordan, and members of the committee, my name is Dr. 

Rochelle Walensky. I’m a professor of medicine at Harvard Medical 

School, chief of the Division of Infectious Diseases at Massachusetts General Hospital, a practicing clinician, and a researcher on 

the cost-effectiveness of HIV care both in the U.S. and internationally. 

In 1995, we told patients with AIDS they would, with certainty, 

die. AIDS plagued my internship. By the end of that year, we had 

an FDA-approved HIV cocktail, three drugs, up to 14 pills a day, 

which, if taken without fail, allowed AIDS patients to live. At the 

time, the three drugs of the cocktail cost a total of $15,000 per person per year, and our research team reported its cost-effectiveness. 

We demonstrated it was good value for money. 

Today, we definitively have the tools to end this epidemic. The 

HIV three-drug cocktail termed antiretroviral therapy is frequently 

formulated into a single daily pill. The regiments have high resistance barriers; that’s good. They have low toxicity profiles; that’s 

also good. And projections suggest a normal life expectancy for adherent patients with HIV. We also know that people who take 

these drugs and effectively suppress their virus cannot transmit it 

to anyone else, but the cost of these drug regimens today is $40– 

50,000 per person per year, a 300 percent increase in 25 years. 

Truvada is a code formulation of two of these three drugs used 

for treatment, scientifically known as the combination of tenofovir 
7 

disoproxil fumarate and emtricitabine. It was FDA-approved for 

HIV treatment in August 2004 and has since then been a mainstay 

of HIV care. 

In 2012 following remarkable scientific work, much of which was 

led by Dr. Grant, the FDA approved the expanded indication of 

Truvada for preexposure prophylaxis or PrEP for HIV prevention. 

The cost of Truvada, when FDA approved in 2004, was $7,800 per 

year. Today, it costs $20,000 per year. A similar drug combination 

is available internationally at a cost of $60 per year. Please understand I’m not proposing that this is what the price should be in the 

United States. I simply provide that benchmark for our national 

pricing to put it into global context. 

In his February State of the Union address, the President announced his initiative to end the HIV epidemic. This will not be 

easy. The benchmarks for the end-the-epidemic initiative are a decrease in the number of new HIV infections by 75 percent in five 

years and by 90 percent by 2030. Our research group has published 

work highlighting that even if we get 90 percent of people with 

HIV diagnosed, treated, and virologically suppressed, we can only 

decrease the number of new infections by 40 percent. In short, to 

end this epidemic, we need both treatment and prevention. 

Aside from treatment, PrEP offers the most efficacious prevention intervention known. Make no mistake, even if it was free, 

PrEP is difficult. In addition to drug adherence, it requires quarterly doctor visits for HIV testing, sexually transmitted infection 

screening, and laboratory monitoring. 

But right now, the biggest problem with PrEP is access. The 

CDC estimates that more than 1.1 million people in the United 

States are at high enough HIV risk to warrant PrEP. Fewer than 

150,000 have ever received it. Over 75 percent of those are white 

gay men in the Northeast and the West Coast, but today’s uncontrolled HIV epidemic is rampant among black gay men and continues to disproportionately affect women of color, especially in the 

South. 

In 2016 it was estimated that one in two black gay men will be 

diagnosed with HIV in their lifetime. We need prevention tools like 

PrEP to reach these marginalized populations if we are ever even 

going to make a dent in this epidemic, never mind to reach the 

auspicious end-the-epidemic goals. 

The sale of Truvada has resulted in profits of $36 billion, and 

Truvada, unchanged, has seen a price increase of 150 percent since 

2004. That price tag is simply too high. We have the scientific tools 

to end this HIV epidemic, and we are fortunate that pharma has 

developed these drugs to get us there. They have already profited 

enormously. 

Now, in the spirit of saving lives, of preventing new infections, 

of realizing a public health—of putting forth a cohesive public 

health response and realizing a Presidential call to action, I simply 

ask that these drugs be reasonably priced so that those most 

marginalized and at risk can reap their benefit. 

And finally, I would like to applaud Congress for holding this 

hearing and bringing this issue to the forefront in the public dialog. 

I hope that some of these companies, including Gilead, will begin 

to do the right thing. It’s never too late for that. Thank you. 
8 

Chairman CUMMINGS. Thank you very much. Mr. Horn? 

STATEMENT OF TIM HORN, DIRECTOR, MEDICATION ACCESS 

AND PRICING, NATIONAL ALLIANCE OF STATE AND TERRITORIAL AIDS DIRECTORS 

Mr. HORN. Thank you, and good morning. Chairman Cummings, 

Ranking Member Jordan, and members of the committee, my name 

is Tim Horn, and I am director of medication access and pricing at 

NASTAD, which is the National Alliance of State and Territorial 

AIDS Directors. I am very pleased to be here today to offer testimony on PrEP access and pricing in the United States. 

NASTAD is a nonpartisan, nonprofit association that represents 

public health officials who administer HIV and hepatitis programs 

in the U.S. and around the world. We represent public health officials in all 50 U.S. states, the District of Columbia, the U.S. territories, and several local jurisdictions. I’d like to focus my comments 

today on the intersection of the high cost of Truvada as PrEP and 

the need for effective, comprehensive, affordable, and, importantly, 

sustainable public health approaches to HIV prevention in the 

United States. 

Now, our ability to respond to the needs of people who have been 

diagnosed with HIV is one of the greatest examples of effective 

public health in the United States. The Ryan White HIV/AIDS program ensures access to not only comprehensive state-of-the-art care 

but, importantly, low-or no-cost treatment made possible with significant discounting provided to AIDS drug assistance programs, or 

ADAPs. ADAPs insure treatment for nearly a quarter of all people 

living with HIV in the United States, the vast majority of whom 

are living at, below, or near the Federal poverty level. 

Now, one thing I want to emphasize here is that there is no such 

comprehensive Federal medication program for people at risk for 

HIV. And I just want to be clear. The only difference between 

someone living with HIV and someone at risk for HIV is a diagnosis. Those vulnerable to HIV infection face the exact same barriers to affordable medication in the United States. 

We are failing populations at high risk for HIV infection, including young black and Latino gay men, women, and transgender individuals. We are failing them because we have not built a payment 

and culturally appropriate delivery systems that are best able to 

reach them. There are many reasons for the low uptake of PrEP 

in this country, but financing and pricing, the subject of today’s 

hearing, are undoubtedly among them. In order to end the HIV epidemic, we must build systems that provide access to PrEP for all 

populations. 

Now, our current PrEP system particularly for uninsured and 

underinsured people vulnerable to HIV infection is essentially built 

on the back of Gilead’s medication assistance program for those 

who are uninsured and meet strict financial eligibility criteria, 

along with the company’s co-pay assistance program for individuals 

who are commercially insured. Now, while these programs have 

undoubtedly helped expand access to the medication component of 

comprehensive PrEP services, they have also succeeded in largely 

masking the impact of the high price of Truvada. 
9 

To be clear, these programs are not a substitute for functioning 

public health and healthcare systems. Partnerships with pharmaceutical manufacturers will always be important, but outsized dependency on their generosity, which in turn is dependent on their 

bottom line, is by no means an equitable and sustainable solution. 

Now, the 340B drug pricing program has also played an important role in allowing public health programs and their community 

partners, including federally qualified health centers, to afford 

PrEP while extending Federal resources as far as possible. But it 

doesn’t go far enough. Even if we assume that the price available 

to 340B entities in the U.S. is 75 percent to 80 percent below the 

list price, this still translates into approximately, you know, $400 

per month per person, a price that is at least four times higher 

than what we can reasonably expect with robust generic competition. 

Additionally, 340B pricing of Truvada as PrEP is only available 

to some health departments and family planning clinics and is not 

available to other institutions where PrEP may be of significant 

benefit. 

Gilead’s assistance programs, the 340B program and discounting, 

and the recent announcement of donated PrEP will continue to expand access to PrEP. However, a long-term, sustainable approach 

to PrEP access requires a competitive generic market. To this end, 

we believe Federal, state, and community partners should be cautious not only to—not to allow the present and future of existing 

patchwork measures to build an artificial market for Gilead’s 

Descovy, which is expected to be approved for PrEP by the end of 

this year. Doing so will undercut the ability of the generic market 

for generic versions of Truvada to bring down costs for our public 

payers, our commercial payers, and, most importantly, people vulnerable to HIV infection. 

Importantly, a lower-cost form of PrEP would allow for more affordable procurement and expanded access across a variety of settings, including state and local health departments, family planning clinics, and STD clinics. And I want to underscore Dr. Grant’s 

point. The list price of Truvada is the price of some of our most import programs do in fact pay. 

Not only has the high cost of Truvada been a barrier in scaling 

up affordable access to PrEP by these programs, they have required some programs to reallocate funding from other public 

health initiatives to meet HIV prevention priorities. 

So I do want to conclude by thanking the committee for the opportunity to testify today and for initiating a dialog that hopefully 

will be to the betterment of people vulnerable to HIV infection and 

to other intersecting conditions. Thank you. 

Chairman CUMMINGS. Mr. Ezell? 

STATEMENT OF STEPHEN EZELL, VICE PRESIDENT, GLOBAL 

INNOVATION POLICY, INFORMATION TECHNOLOGY AND INNOVATION FOUNDATION 

Mr. EZELL. Good morning, Chairman Cummings, Ranking Member Jordan, and members of the committee. I’m Stephen Ezell, vice 

president of Global Innovation Policy at the Information Technology and Innovation Foundation. We’re a nonprofit, nonpartisan 
10 

Washington, DC.-based science, technology, and economic policy 

think tank, and I appreciate the opportunity to testify in the panel 

this morning about the U.S. life sciences innovation system. 

The United States clearly leads the world in life sciences innovation. For instance, in the 2000’s, U.S.-headquartered enterprises 

generated more new-to-the-world drugs than enterprises from the 

next five nations combined. And over the past two decades, U.S. 

companies have accounted for almost half of the world’s new drugs, 

including treatments such as for leukemia, skin cancer, inherited 

blindness, and a set of treatments for HIV/AIDS that have made 

a disease that was once a death sentence now treatable and hopefully will have a full cure in the years to come. 

However, it was not always that way. In fact, in the 1970’s, the 

United States was a global in life sciences innovation as Europeanheadquartered companies invented twice as many new-to-the-world 

drugs as ours did in the 1970’s. 

What’s changed over the past four decades has been a concerted 

and intentional set of policy choices designed to make America the 

world’s leader in life sciences innovation. Those policies are anchored in three key tenants. First, robust and complementary public and private investment in life sciences R&D, effective mechanisms to facilitate the transfer of technology from universities and 

Federal laboratories to the private sector for commercialization, 

underpinned by strong intellectual property rights such as embodied in Bayh-Dole agreement, and a drug pricing system that allows companies to earn revenues that can be reinvested into future 

generations of biomedical innovation. 

The U.S. invests by far more than any other nation in life 

sciences R&D. In fact, analysts estimate that the United States has 

invested 70 to 80 percent of global biomedical R&D investment 

over the past two decades. It’s anchored by Federal Government investment of about $39 billion a year into basic life sciences research that focuses on understanding fundamental processes by 

which diseases develop and transmit or identifying novel biomarkers indicating the presence of disease. This basic research creates 

a platform for innovation potentially leading to the discovery of 

new medicines, tests, or procedures. 

The private sector complements this public-sector investment 

with, in some years, close to $95 billion in annual R&D focused on 

the applied research and clinical trials necessary to bring safe and 

effective breakthrough drugs to market. The fact is this drug development process is lengthy, risky, and expensive. Studies vary, and 

I’m happy to share result of several with the committee. But research finds that, on average, developing a new pharmaceutical 

compound takes an average of 11.5 to 15 years at a cost of $1.7– 

3.2 billion. 

It’s absolutely vital to recognize that public and private investments are complementary. A recent journal of Nature article estimates that, on average, biotechnology companies invest $100 in development for every $1 the government invests in research leading 

to a specific innovative drug. 

If you take the case of the breakthrough anticancer prostate 

drug—or prostate cancer drug Xtandi developed primarily by 

Astellas and its partners, it’s estimated that about $2 million in 
11 

federally funded research conducted at UCLA was complemented 

by over $900 million of private-sector investment required to bring 

Xtandi to market. That’s a nice example of the almost 300 new 

drugs, vaccines, and devices that have been developed as a result 

of public-private partnerships facilitated in part by the Bayh-Dole 

Act since its enactment in 1980. 

Just like semiconductors, movies, or music, life sciences is an innovation-based industry, meaning that companies incur extremely 

high upfront fixed cost of initial design and development that must 

be recouped and admits to failure rates that approach 95 percent. 

Moreover, these companies fundamentally depend upon the profits 

earned from one generation of innovation to finance investment in 

the next. Hopefully, Gilead’s investment in HIV/AIDS drugs will 

generate profits that enable its ongoing efforts in areas like hemophilia and oncology to generate breakthrough treatments tomorrow. 

This dynamic is why America’s life sciences sector is the world’s 

most R&D-intensive, investing 44 percent of its value added into 

subsequent R&D. The reality is that there’s a direct link between 

pharmaceutical company revenues and their ability to reinvest in 

future generations of innovation. They are intimately and causally 

linked. 

In conclusion, a key reason why the U.S. life sciences innovation 

system has been so successful is that we’ve created the framework 

for effective public-private partnerships where each party contributes what it does best. Public research to bring a stock of knowledge that can be innovated upon by the private sector and investing the hundreds of millions required to bring an innovative new 

drug to the market. 

Thank you for your time today, and I look forward to answering 

your questions. 

Chairman CUMMINGS. Thank you very much. Dr. Lord. 

STATEMENT OF AARON LORD, PREP PATIENT AND ADVOCATE 

Dr. LORD. Chairman Cummings, Ranking Member Jordan, and 

members of the committee, I thank you for inviting me here today 

to testify. My name is Aaron Lord. I am here today as a physician, 

as an HIV activist, and a cofounder of the PrEP4All collaboration, 

as well as a proud gay man. 

I was born and raised in West Virginia. I attended Georgetown 

University on Federal scholarship. I then attended medical school 

at Columbia and am currently an assistant professor at NYU, but 

I am not here in my official capacity. 

Since realizing I was a gay man in my early teens, like so many 

in my community, I lived in fear of acquiring HIV. The reality hit 

all too close to home when early on in our relationship my future 

husband, who I cherish and love dearly, was diagnosed with HIV. 

In July 2012, the FDA announced the approval of Truvada as 

PrEP. It’s the first drug approved to prevent rather than treat 

HIV. It is highly effective, reducing risk by over 99 percent when 

taken as prescribed. Since 2012, I have taken Truvada every day 

to protect my health and the health of my community. With this 

medication, I no longer have to live in fear. 
12 

Despite PrEP’s remarkable efficacy, the number of new HIV infections in the U.S. remains the same today as when PrEP was approved in 2012 with one person becoming newly diagnosed every 15 

minutes. We know it doesn’t have to be this way. We know that 

when PrEP is made universally accessible at no cost, new HIV infections dramatically decrease. In Sydney, Australia, new HIV infections decreased by 25 percent statewide in one year when public 

health officials used low-or no-cost PrEP to reach all those at risk. 

In the U.S., however, we are failing to reach those most vulnerable. With mere fractions of at-risk women and black and Latino 

men getting PrEP and rates and use in the South remain stubbornly low. Too many of us are still living in fear. A root cause of 

this problem is the price. Gilead Sciences, who makes the only 

PrEP available in this country, charges us over $2,000 a month or 

over 400 times what FDA-approved generics cost internationally. 

And while Mr. O’Day will certainly state that his company has 

earned the right to charge such exorbitant sums, Truvada as PrEP 

is not Gilead’s invention. Truvada as PrEP is an invention of the 

U.S. Government whose research and development was funded exclusively by U.S. taxpayers and the Gates Foundation and is protected by multiple robust patents issued to the CDC. Even the very 

patents that Mr. O’Day currently uses to prevent the American 

people from accessing generic Truvada are themselves based on research funded by the U.S. taxpayer. 

Price is not the only barrier preventing people from using PrEP. 

Stigma, racism, homophobia, transphobia, sexism, poverty, they all 

play a role. These barriers can and must be mitigated, but we cannot do it if our healthcare system spends over $20,000 a year on 

Mr. O’Day’s drug instead of spending it on precious programming 

to fight these barriers. Mr. O’Day, we are suffocating under the 

weight of your company’s pricing. 

Mr. O’Day, for a figure far less than $2.6 billion, which is what 

we spend on your egregiously overpriced medication every year, we 

could have a national, far-reaching PrEP program that guarantees 

every person who needs PrEP can get it, including free medicine, 

clinical care, lab testing, and transportation. And we could still 

have half-a-billion left over for community organizations to fight 

these barriers. Mr. O’Day, you have given the American people a 

very bad deal for our money. 

We have learned all too well from Gilead’s past misdeeds what 

happens when they are left to their own devices. As the WydenGrassley’s report so vividly showed, Gilead’s pricing of their cure 

for hepatitis C at $1,000 a pill was aimed to do one thing: maximize their profit. The consequences of that unmitigated greed resulted in a public health disaster. Despite spending $50 billion of 

our hard-earned dollars buying overpriced medication, the number 

of new hepatitis C infections more than tripled. 

I’m here today to say that HIV activists will not stand by and 

allow this to happen ever again. So ladies and gentlemen of the 

committee, I ask you as a representative of my community, as a 

proud American, as a scientist, and as a patient, to join me in asking Mr. O’Day what justification do you have for charging $2,000 

a month for Truvada as PrEP when the American people funded 
13 

the innovation of the molecule, invented its use as PrEP, and funded four clinical trials to prove its efficacy? 

Mr. O’Day, we do not ask for your company’s charity or for taxdeductible donations that meet your company’s needs but fail to 

meet the needs of our communities. Rather, we ask Mr. O’Day, why 

not lower the price of Truvada to $15 a month right here today at 

this hearing? 

Members of Congress, the American people have invented a way 

to end the HIV epidemic, and that we should be very proud of. And 

we look to you today to ensure that every single person in this 

country can protect themselves from this plague. Thank you very 

much. 

Chairman CUMMINGS. Thank you very much. Mr. O’Day? 

STATEMENT OF DANIEL O’DAY, CHAIRMAN AND CEO, GILEAD 

SCIENCES, INC. 

Mr. O’DAY. Good morning, Chairman Cummings, Ranking Member Jordan, and members of the committee. My name is Daniel 

O’Day. I recently joined Gilead as its new chief executive officer. 

Thank you for the opportunity to be here today. 

Gilead is an American biotech company, but for the past three 

decades has been focused on creating therapies that prevent, treat, 

and cure some of the world’s worst diseases. To name just a few 

examples, Gilead invented the first once-daily pill to cure hepatitis 

C, Tamiflu for influenza, and the first and currently only FDA-approved HIV prevention medication, Truvada, along with 10 other 

drugs used in the treatment of HIV. 

When I decided to become CEO, I had long admired Gilead’s remarkable contribution to health care and the high level of innovation behind their medicines. Importantly, I knew I was joining a 

company that was committed to the interest of patients and dedicated to pursuing scientific excellence to prevent and cure diseases. 

All of this is evident in Gilead’s approach to HIV, the commitment 

to developing HIV medications that are safer, more patient-friendly, and more effective. Gilead researchers have made contributions 

that fundamentally changed the course of the HIV/AIDS epidemic, 

transforming the disease from a death sentence to a manageable 

chronic condition. 

Gilead was founded in the midst of the AIDS crisis. At that time 

people living with HIV were required to take a cocktail of 20-plus 

pills each day to treat the disease. Many of these drugs lead to serious, often debilitating side effects. And even when taken as directed, the therapies offered an average life expectancy of less than 

40 years of age with most people dying within just a few years of 

contracting the disease. 

In the early 1990’s, Gilead began working to invent a single-pill HIV treatment. Following nearly a decade of work and about $6 

billion invested in research, $1.1 billion of which was devoted specifically to Truvada, Gilead launched Truvada as one of the first 

fixed-dose combination pills for HIV treatment in 2004. Today, 

Truvada and other Gilead medicines have contributed to nearly 

doubling the average life expectancy of people with the disease. 

Although Truvada was initially approved to treat HIV, researchers and public health officials knew for years that antiretroviral 
14 

drugs like Truvada could also be used to prevent HIV infection, a 

technique referred to as PrEP. With this in mind, Gilead supported 

clinical trials that ultimately led to the approval of Truvada, the 

first and currently only medication approved for PrEP. 

To be clear, despite some media suggestions otherwise, Gilead invented Truvada, no one else. Gilead developed the two drugs that 

are combined in Truvada, invented the combination that allowed 

these drugs to be taken as a single pill, and invented the drugs 

used to treat HIV in combination with other antiviral drugs. 

I want to address the use patents on PrEP granted to the CDC. 

Using Truvada for PrEP was well-known in the scientific community long before CDC claimed it as an invention. We believe the 

CDC patents are invalid, but we’ve chosen not to challenge those 

patents because we value our collaborative relationship with the 

agency. 

Finally, I want to address access to Truvada. Gilead is committed 

to ensuring that every American who needs Truvada can obtain it. 

We offer a wide range of programs to help ensure that people have 

access to Truvada when they need it. For example, 98 percent of 

people who use our co-pay assistance program have no out-of-pocket costs. In fact, according to the CDC’s own estimates, when taking our programs into account, less than 1 percent of Americans 

who would benefit from PrEP are in need of a financial assistance 

to obtain Truvada. 

Moreover, we continue to work with advocates, providers, and 

governments to remove the societal and other barriers to broader 

PrEP usage. Last week, we took another important step for expanding access by donating Truvada for up to 200,000 uninsured 

Americans each year. 

We are committed to ending the HIV epidemic. We will work 

with Congress and others to further expand access to PrEP, and we 

will continue our scientific research in pursuit of a cure. 

In representing Gilead, I can assure you that we take our responsibility in HIV extremely seriously and will ensure you that this is 

always evident in our actions. 

Thank you for the opportunity to provide this testimony today, 

and I’d be pleased to answer your questions. 

Chairman CUMMINGS. Thank you very much. 

I now recognize Ms. Ocasio-Cortez, five minutes. 

Ms. OCASIO-CORTEZ. Thank you. Thank you, Chair. Thank you 

for agreeing told this hearing. And while I appreciate your generosity in acknowledging the role our office played in this hearing, 

I also have to give credit to the countless advocates and activists 

that have been uplifting the issue of the price of Truvada and 

PrEP. 

And I have to say that is not because of me we are having this 

hearing even in our office. It is because of a 23-year-old staffer Ms. 

Claudia Pagon Marchena, who first dug into—who first noticed this 

and first listened to the actual activists that raised this issue. She 

took the opportunity to pursue it, and if it wasn’t for the openness 

and willingness of your leadership and committee staff to take her 

concerns seriously, we wouldn’t be here today. 

And so I just think it is an incredible testimony to—despite the 

powerlessness we often feel in this political moment, it shows that 
15 

everyday people, no matter your age or your identity, can make 

changes. And that is the reason why we are having this hearing 

today, so thank you. 

I also, before I begin, would like to submit to the congressional 

record New York City Council Speaker Corey Johnson, who himself 

is HIV-positive, his testimony to the congressional record, so I seek 

unanimous consent to do so. 

Chairman CUMMINGS. Without objection, so ordered. 

Ms. OCASIO-CORTEZ. Thank you so much. 

So let’s get down to, you know, the core of this hearing. Dr. 

Grant, Truvada for PrEP is the only known drug that can prevent 

the transmission of HIV, correct? 

Dr. GRANT. It’s the only medication that’s been approved by the 

FDA. It’s also known that tenofovir alone is prophylactic—— 

Ms. OCASIO-CORTEZ. Okay. 

Dr. GRANT [continuing]. for HIV—— 

Ms. OCASIO-CORTEZ. Thank you. And, Dr. Grant, it was your 

NIH-funded research on PrEP that built on the earlier research 

were patented by CDC researchers, is that correct? 

Dr. GRANT. Yes. My clinical trial was informed by CDC research 

in two ways. One, the CDC demonstrated that the preexposure 

dose was—added to the efficacy of PrEP and—yes. 

Ms. OCASIO-CORTEZ. Thank you. Thank you, Dr. Grant. And I 

would also like to seek unanimous consent to submit this Yale 

School of Law study into the congressional record, which concludes 

that the CDC’s patents for PrEP were both valid and enforceable 

against Gilead. 

Chairman CUMMINGS. Without objection, so ordered. 

Ms. OCASIO-CORTEZ. Thank you very much. 

Dr. Lord, thank you for your advocacy here today. Is it true that 

the public invested $50 million to develop PrEP? 

Dr. LORD. That is correct. 

Ms. OCASIO-CORTEZ. Is it also true that Gilead relied on publicly 

funded trials to obtain FDA approval? 

Dr. LORD. Yes. If you look at their supplementary new drug application, you’ll see that every sponsor of Truvada as PrEP was a 

non-Gilead sponsor. 

Ms. OCASIO-CORTEZ. So the public invested to develop the drug. 

The public invested and funded the trials for FDA approval. Is it 

true that the pharmaceutical companies force the public to pay 

twice first when investing in drug discovery, but then it looks like 

these patient assistance programs that they tout very often also 

have a public investment piece as well, right? How are these public 

assistance programs funded? 

Dr. LORD. Yes, so, you know, I think as far as like the co-pay assistance program goes, it’s important to also note that it’s—it only 

exists in its current state due to the work of activists. We have 

worked for years to get them to increase from initially a $300 a 

month co-pay assistance, which left people with hundreds if not 

thousands of dollars of co-pay per month. And then they really only 

increased it to $4,800 after additional years of activist pressure, 

and that still left thousands of dollars of donut hole potential for 

some patients. And then it only took a New York Times op-ed that 
16 

we published, you know, to threaten march-in rights on this drug 

in order to get them to raise it to the $7,200—— 

Ms. OCASIO-CORTEZ. Thank you. 

Dr. LORD [continuing]. which is still not enough. 

Ms. OCASIO-CORTEZ. Thank you. And even when it comes to 

when folks can’t access PrEP because it is so expensive and, you 

know, the HIV epidemic continues, that also comes at a public cost, 

right? So the public is paying—we pay to develop PrEP, we paid 

to finance the publicly funded trials to develop this drug, we also 

pay and foot the bill with patient assistance programs. Also, as you 

noted, the existence of these programs happen because of the public, and also we pay when the HIV epidemic gets spread as well. 

Very quickly, Mr. O’Day, you are the CEO of Gilead. Is it true that Gilead made $3 billion in profits from the sales of Truvada in 

2018? 

Mr. O’DAY. Three billion in revenue. 

Ms. OCASIO-CORTEZ. Oh, yes, in revenue, thank you. And, very 

quickly, the current list price is $2,000 a month in the United 

States, correct? 

Mr. O’DAY. The current list price is $1,780 in the United States. 

Ms. OCASIO-CORTEZ. Okay. 

Mr. O’DAY. And just to correct, the $3 billion was a global figure—— 

Ms. OCASIO-CORTEZ. Okay. I see. 

Mr. O’DAY.—for Truvada for PrEP—— 

Ms. OCASIO-CORTEZ. So the list price is almost $2,000 in the United States. Why is it $8 in Australia? 

Mr. O’DAY. Truvada still has patent protection in the United 

States, and in the rest of the world it is generic. I can’t comment 

on the price in Australia of the generic medicines, but it is generically available in other parts of the world and will be generically 

available in the United States as of September in 2020 based upon 

Gilead agreeing to support—— 

Ms. OCASIO-CORTEZ. Thank you. 

Mr. O’DAY.—generic entries one year earlier. 

Ms. OCASIO-CORTEZ. So I think it is important that we notice 

here that we the public, we the people developed this drug, we paid 

for this drug, we led and developed all of the grounding patents to 

create PrEP, and then that patent has been privatized. Despite the 

fact that the patent is owned by the public, we refuse to enforce 

it. There is no reason this should be $2,000 a month. People are 

dying because of it. And there is no enforceable reason for it. We 

own the core intellectual property for it. And, as a result, people 

are dying for no reason, for no reason—— 

Chairman CUMMINGS. The gentlelady’s time is—— 

Ms. OCASIO-CORTEZ [continuing]. to develop this drug. Thank you 

very much. 

Chairman CUMMINGS. The gentlelady’s time is expired. Mr. Armstrong? 

Mr. ARMSTRONG. Thank you, Mr. Chairman. And I agree. I believe that prescription drug pricing, it is a conversation that I get, 

it is one of the biggest ones we get in our office both in D.C. and 

back in our offices in North Dakota, and it should be a bipartisan 

endeavor. And in fact, we have had a package of prescription drug 
17 

bills that have come through two committees here, and I know in 

at least one they passed unanimously. 

But unfortunately, we are in D.C. and, never allowing a political 

opportunity to go to waste, they are going to get marked up in 

Rules Committee, and we are going to vote on bills this week that 

just quite frankly have no chance of becoming law. So when we 

talk about bipartisanship, we had two sets of packages that could 

come to the floor clean this week that would pass, they pass the 

Senate, the President could sign them by the end of the month, but 

that is not going to happen. So, Mr. O’Day, it has been said that NIH spent $51 million on 

clinical trials for PrEP, is that correct? 

Mr. O’DAY. Thank you, Congressman. Yes, it’s important to point 

out that Gilead has spent $1.1 billion developing this medicine. 

Gilead has the patents on this medicine. And in the course of the 

PrEP indication, it’s also important to take us back to that period 

of time of history with the HIV/AIDS epidemic. It was a time when 

prevention of AIDS was actually something that was highly controversial both from a scientific standpoint, resistance, but also 

from public advocacy because there were questions around the morality of providing a preventive medicine that could take away from 

safe-sex practices in others. So this was a public-health question 

that needed to be answered. 

And we partnered with several members of the community. It’s 

a very complex topic. For the PrEP indications, we supported it 

with medicines. We have two of our Gilead scientists that are coauthors on the fundamental—one of the fundamental trials, the 

iPrEx trial that Dr. Grant has spoken to before and to be an author 

on these trials in a highly regarded 30-party publication—medication—publication, you need to have sufficient involvement in those 

trials. So Gilead had sufficient involvement in those trials. The 

NIH provided $50 million in grant. The Gates Foundation supplied 

$17 million in grants. And the Gates Foundation also independently funded the second trial that was used for this indication with 

$70 million as well. So it was a partnership amongst public and 

private institutions to get this indication. 

Mr. ARMSTRONG. And you said in your opening statement you 

provide financial assistance to uninsured patients. How does that 

work? 

Mr. O’DAY. So we have two basic programs to help with patients. 

One is the co-pay assistance program. So patients that have commercial insurance that have a high deductible cost for their medicines, we have a program that supports them. In fact, patients that 

access our co-pay programs during the life of the patent that we 

have on the product, 98 percent of people take nothing out of their 

pocket when they go to the pharmacy, zero. 

The other end of the spectrum we have deep discounts to government programs that allow patients in Medicaid, Medicare, ADAP 

programs to access our medicines at 70 to 80 percent discounts for 

the list prices that we’ve discussed here today. 

Finally, for the uninsured patient population that is truly not 

met by these needs, we’ve been working with CDC and announced 

the—one of the largest-ever donations of medicine last week in conjunction with HHS and CDC for—by the CDC’s own estimates, 
18 

they’ve estimated that out of the 1.1 million patients that are susceptible to HIV, 200,000 are uninsured. We have donated as a result of the announcement last week for all 200,000 of those patients to receive free Truvada for the next 10 years. 

Mr. ARMSTRONG. And I grew up in the early 1980’s, and we have 

come a long way since then and we have a long way to go. But, 

I mean, particularly when we are talking about the uninsured population as it relates to HIV and access to drugs, I mean, it is a debilitating, crippling disease. We are working toward prevention, we 

are working toward cure, but those factors to that uninsured population are unique to this healthcare crisis, are they? 

Mr. O’DAY. Well, yes, this is quite a unique circumstance because 

of the fact that, at the end of the day, there are so many things 

that are getting in the way of people that require PrEP getting 

PrEP. There’s access to the healthcare system for sure, but there’s 

also education, education for physicians, education for patients, and 

there’s a tremendous amount of stigma associated with this disease, what comes into play for the underserved communities. And 

this is something that Gilead has been focused on, provided hundreds of millions of dollars and supporting community associations 

to try to get at these other root causes of PrEP, and it’s absolutely 

what’s required to help eliminate the disease. I completely agree 

that we have to attack it from both a prevention as well as a treatment standpoint to eliminate this disease, and we’re a big part of 

that. 

Mr. ARMSTRONG. Thank you, sir. 

Chairman CUMMINGS. Thank you very much. I recognize myself 

now. 

Mr. O’Day, other drug companies sat in the very seat, that very 

seat that you are sitting in like Martin Shkreli, and all offer the 

same excuses and justifications, same thing. They claim they have 

patient assistance programs to help those who cannot access the 

drug, but the truth is that someone, somebody is paying for these 

exorbitant prices. And that impacts everybody in the system. That 

is one reason health care now is so expensive. At the end of the 

day, it is the taxpayers who bear the cost of these skyrocketing 

prices through government programs like Medicaid. 

Dr. Lord, isn’t it true that in some countries the generic version 

of this treatment is sold for a fraction of the U.S. price? Is that 

right? 

Dr. LORD. That is correct. 

Chairman CUMMINGS. And how much is it sold for overseas? 

Dr. LORD. According to the Global Fund, you can purchase this 

medication for under $5 a month. 

Chairman CUMMINGS. That is astonishing. Yet Gilead is charging 

around 17, close to $1,800 a month? 

Dr. LORD. Yes. 

Chairman CUMMINGS. Mr. O’Day, in your written statement, you 

claim that your company spent $1.1 billion on research and development related to Truvada. But you made $36 billion in revenue 

on Truvada since it was approved in 2004. That is according to 

your own company’s SEC filings. Mr. O’Day, do you believe that 

that is appropriate, and do you believe it is moral? 
19 

You know, somebody said over here I guess it is a thing of 

choices. One of my first employees died from AIDS, and I will never 

forget it. And I described it, his dying on installment. It is a mother. It is rough to watch somebody die from AIDS. But anyway, you 

can answer my question. 

Mr. O’DAY. Mr. Chairman—and, you know, I’m very sorry to 

hear about your—— 

Chairman CUMMINGS. Employee. 

Mr. O’DAY. Employee. 

Chairman CUMMINGS. It was a person. 

Mr. O’DAY. Yes. 

Chairman CUMMINGS. An African-American young male about 25 

years old, dead. 

Mr. O’DAY. I’m very sorry to hear that. The answer to the question is that we have spent more than $6 billion over the past— 

since 2020 on HIV research in general. And in fact, we’ve taken the 

disease from a death sentence to a manageable chronic condition 

with one pill once a day, but we’re not done yet. We still have 

medicines—because of the fact that we now have the average life 

expectancy out to 78 years from 40 years, we never anticipated 

that people would be taking these medicines for decades. And some 

of the current generations of medicines have kidney and bone effects that now our next generations that we’re launching will be 

able to have less of those effects and allow people to live longer 

healthier lives. 

And yet we’re not done because we have to get to a stance where 

people aren’t taking a daily pill, where they’re taking it once a 

month, once every two months, or we hope we can get to a cure 

where people can take a limited course of therapy like in HCV, 12 

weeks, and never have to worry about medicines again. In order to 

do that, we have to continue to invest in research for the patent 

life of our medicines. And, of course, when a patent ends, generics 

come on like they are in other parts of the world. 

But during that patent period time, we also have a responsibility 

to make sure that Americans get our medicines when they’re priced 

at a level that allows us to reinvest in research. And that’s where 

our access programs, co-pay assistance, the donation to the CDC 

come in to allow us to make sure the price doesn’t get in the way 

during this period of time of patent exclusivity. 

Chairman CUMMINGS. Can you tell me quickly about the timing 

of the donation that you all are making of medication? I think you 

said 200,000. 

Mr. O’DAY. Yes, Mr. Chairman. So it’s 2.4 million bottles a year, 

which equates to around—the PrEP treatments for around 200,000 

patients for up to 10 years. 

Chairman CUMMINGS. All right. 

Mr. O’DAY. And this includes both our current generation product Truvada, as well as our advancement, which may come to market as early as later this year, which allows that better safety profile if you like for patients. 

Chairman CUMMINGS. And how did you all come up with this 

200,000? That is what I was trying to get to. 

Mr. O’DAY. Oh, that was a number that was requested and discussed with the CDC. They acknowledged that in the 48 hotspot 
20 

communities, District of Columbia; San Juan, Puerto Rico; and the 

seven rural states, that that would be where—the number of patients that would not qualify for Federal programs or be involved 

in commercial insurance. So that number came from the CDC, and 

we were happy to support them with that. 

Chairman CUMMINGS. And so if they had come up with a higher 

number, it is quite possible you would have given more. Is that a 

reasonable assumption? 

Mr. O’DAY. That’s a reasonable assumption, yes. 

Chairman CUMMINGS. All right. 

Mr. O’DAY. We were trying to solve a gap that isn’t currently covered by our current access programs. 

Chairman CUMMINGS. You know, Mr. O’Day, something was said 

here earlier, and I want you to be real clear. I have said this to 

many of the witnesses in the pharmaceutical industry. I have no 

problem with you all making a profit. I want you to make a profit. 

I want you to make a profit because I have seen what research can 

do. I have relatives that went, say, for example, from a chronic condition with cancer—I mean, from a terminal condition to chronic. 

I have seen it in a few years. And I also serve with Dr. Gallo on 

the Human Virology Board in Maryland, so we have been dealing 

with this a long time. 

But, at the same time, I am talking about the people who cannot 

get it, you know, the one who is getting ready to die and will not 

be able to attend his daughter’s wedding, that one, or the mother 

who won’t be there to see her children grow up, that lady. And 

what I am saying to you is that, you know, I want to work, we all 

want to work with the industry, but it is kind of hard. 

I mean, you can imagine when we hear about the $36 billion or 

the $3 billion—and I know it is global, I got that—$3 billion, and 

then we go back to our districts and we see people, and they see 

the cure. They know the cure is out there. They know there is 

something out there called Truvada. They don’t know you, they 

don’t know who makes it. All they know is that it is something that 

could save their life. And they are reaching, trying to get it. And 

then they hear about these figures and they say—they just can’t 

get there. They cannot reach it. And I don’t know whether those 

kind of things are taken into consideration in the board rooms. Are 

they? 

Mr. O’DAY. Absolutely. I can assure you that if there is a patient 

out there that cannot access Truvada because of financial means, 

our programs are designed to capture them. I mean, again, we 

have the co-pay assistance for people with insurance. People without insurance that, you know, make less than five times the poverty level, are provided with medicine for free through our medication assistance program. 

Chairman CUMMINGS. And who pays for that? 

Mr. O’DAY. Gilead pays for that. 

Chairman CUMMINGS. So that cuts into your profit. Is that what 

you are saying? 

Mr. O’DAY. It’s important to us to make sure that every patient 

can have access to the medicines, and it’s absolutely part of our responsibility. 

Chairman CUMMINGS. All right. I now recognize Mr. Jordan. 
21 

Mr. JORDAN. Thank you, Mr. Chairman. 

Mr. O’Day, what is the difference between Truvada and PrEP? 

Mr. O’DAY. Truvada is a medicine that’s used for HIV treatments 

and for prevention. It was discovered many years ago. 

Mr. JORDAN. I guess my question is is it the exact same drug; 

it is just used at a different time and in a different way? 

Mr. O’DAY. No, PrEP is an indication—one of the indications that 

Truvada is approved for. 

Mr. JORDAN. Right, but—so the drug is Truvada. It is used—and 

when we say—because Dr. Lord talked about Truvada as PrEP. 

Mr. O’DAY. Oh—— 

Mr. JORDAN. It is the same drug? 

Mr. O’DAY. Yes, it’s the same drug, is the same mechanism, the 

same dose, it’s the same—— 

Mr. JORDAN. It is a different use? 

Mr. O’DAY.—frequency. 

Mr. JORDAN. Different use, different timing—— 

Mr. O’DAY. What Truvada does is it reduces viral replication of 

HIV, and that can be effective for—— 

Mr. JORDAN. I just want to be clear for everyone, though, 

that—— 

Mr. O’DAY. Yes. 

Mr. JORDAN [continuing]. I think there can be some confusion 

that Truvada and PrEP are somehow some different drug. It is the 

same drug? 

Mr. O’DAY. Truvada is the drug. PrEP is one of the indications—— 

Mr. JORDAN. Right. 

Mr. O’DAY.—that the drug is used for. 

Mr. JORDAN. Got it. Got it. Okay. And, earlier, Dr. Grant said 

Gilead did not provide leadership or funding for PrEP in the studies at CDC. Is that true? 

Mr. O’DAY. No, that’s not true. I mean, we have nine scientists 

that were involved in the iPrEx trial itself, was one of the two 

trials that went to the FDA to seek approval. And of those, we have 

two scientists. Both are still with the company actually that were 

authors in the primary New England Journal article that is the 

iPrEx study. 

Mr. JORDAN. Okay. 

Mr. O’DAY. And to be an author on the New England Journal of 

Medicine, you must have—— 

Mr. JORDAN. So—— 

Mr. O’DAY.—involvement in the trial—— 

Mr. JORDAN. So—— 

Mr. O’DAY.—in addition to the free medicine we provided and 

the—— 

Mr. JORDAN. So, Mr. O’Day, Gilead developed Truvada? 

Mr. O’DAY. Correct. 

Mr. JORDAN. You guys did that all on your own. Gilead participated with CDC on Truvada as PrEP, right? 

Mr. O’DAY. Correct. 

Mr. JORDAN. And your drug has made a difference for millions 

of people all over the world, right? 

Mr. O’DAY. That’s correct. 
22 

Mr. JORDAN. How many folks do you think have been impacted— 

I would say people are alive today because of your drug. Is that 

true? 

Mr. O’DAY. Oh, absolutely. And with 10 other medicines that 

Gilead makes, absolutely millions of people living with AIDS and 

preventing AIDS. 

Mr. JORDAN. And how long did it take to develop Truvada? 

Mr. O’DAY. Truvada was a long story. It goes back to the early 

1990’s with—Truvada is a combination of two different medicines. 

One is called, for the sake of simplicity, TDF, and the other one 

is FTC. So this goes back to the early 1990’s and then into the 

early 2000’s when FTC was evaluated by our scientists, and it’s the 

combination of these two medicines that led to the first approval 

for Truvada in 2004 after a good decade to 15 years of research and 

lots of failures, by the way. I mean, 90—— 

Mr. JORDAN. So over a decade of research and trials and all 

kinds of effort to develop this miracle drug that has saved millions 

of people all over the planet, my guess is that costs a few dollars. 

What did it cost you to develop the drug? 

Mr. O’DAY. Well, in this case it cost $1.1 billion. 

Mr. JORDAN. So billions of dollars to develop this amazing 

drug—— 

Mr. O’DAY. Yes. 

Mr. JORDAN [continuing]. that saved all kinds of folks. And no 

what are you doing with those profits? I think you said you are trying to find a cure, right? 

Mr. O’DAY. We’re—absolutely. We’re investing them back into research. We—our scientists and the colleagues—I’m so inspired by 

Gilead. They will not rest. They will not rest. Good enough was 

never good enough for them when we had this generation of medicines that had these kidney and bone toxicities, and we’re now 

launching medicines that are much more tolerable for patients 

today. But they’re not stopping. So we’re looking at long-acting 

medicines that—— 

Mr. JORDAN. Just last week you said for folks who can’t afford 

it, folks who don’t have insurance, you are going to give it to them 

free? 

Mr. O’DAY. Absolutely. 

Mr. JORDAN. Okay. So just let me get this straight. Over a dec- ade of research, over $1 billion into that research, you develop a 

drug that saved millions of people, now can be used as PrEP prior 

to, not just as something after the fact that when people have been 

diagnosed with HIV. The profits you have made from that you are 

now working on developing a cure and, just last week, you announced folks who can’t get the access to the medication right now, 

you are going to give it to them free? 

Mr. O’DAY. Yes, Congressman. 

Mr. JORDAN. But you are a bad guy. You are a bad guy. I mean, 

that is what we heard from the other side. 

Mr. Ezell, isn’t that exactly how it is supposed to work under the 

Constitution? People come up with a great idea, they go to the Patent and Trade Office, they get a patent for it, they get that patent 

for certain length of time to recoup the billions of dollars it cost to 

make the product or the idea or whatever they did that has helped 
23 

millions of people, that has been great for our—this is one of the 

things that makes America the greatest place ever. Isn’t that supposed to be how it is supposed to work 

Mr. EZELL. That’s exactly right, Representative Jordan. And, you 

know, it’s interesting to hear the questions about, well, how much 

cheaper is this drug in other countries of the world. Well, part of 

the problem is that other countries of the world are not as effective 

in innovating drugs because they did not—— 

Mr. JORDAN. They didn’t make it. These guys made it. 

Mr. EZELL. That’s exactly right. We’ve put in place systems 

to—— 

Mr. JORDAN. Oh, I forgot to add one thing. I forgot another thing. 

They are going to go off patent year early. Isn’t that right, Mr. 

O’Day? 

Mr. O’DAY. Yes, and generics will enter one year early. 

Mr. JORDAN. I mean, so one year early is going to go to a lower 

cost. They don’t have to do that, but somehow, they are the bad 

guy, right? I just fail to—I appreciate what you have done and the 

thousands of people that are being impacted as we speak, the millions of people whose lives have been impacted, the folks who are 

alive today because of the work you have done. And we are going 

to beat you up. 

So, Mr. Chairman, I appreciate this hearing, and I yield back my 

time. 

Chairman CUMMINGS. I appreciate you, but let me say something. Let me make this clear, and listen up. Nobody is coming 

here to beat you up. I want to make that clear. I applaud Gilead. 

But it is nothing like holding the hand of somebody who is dying 

from AIDS. I am sorry. And all we are trying to do is represent our 

constituents and help them stay alive. When you are dead, you are 

dead. And when I think about the fact that Truvada for PrEP is 

only getting to 10 percent of the people that need it, what about 

the other 90 percent? What about their families? I am not knocking 

you. I am just trying to figure out how we can help you get to the 

people who are dying as we speak, as we speak. 

And we can holler, we can play all these games, but let me be 

clear. Let me be clear. I speak for the dead and the living, we are 

simply trying to get, again—I don’t know who he is talking about, 

but I applaud Gilead. I have been dealing with this issue for 20- 

something years, so I know about it, and I know the problems, and 

I know the pain. And I know about the death by installments. So 

I want to be clear. Who is next? 

Mr. JORDAN. Well, can I respond, Mr. Chairman? 

Chairman CUMMINGS. No. 

Mr. JORDAN. You got like nine minutes and you just went after 

me—— 

Chairman CUMMINGS. Mrs. Maloney. Mrs. Maloney. 

Mr. JORDAN. Oh, that is wonderful. Thank you. 

Mrs. MALONEY. Thank you, Mr. Chairman. 

Mr. JORDAN. You had seven, eight minutes. I had—— 

Mrs. MALONEY. Thank you, Mr. Chairman. I deeply appreciate 

the passion—— 

Mr. JORDAN. Would the gentlelady yield just for 1 second? 

Mrs. MALONEY. No, I will not. 
24 

Mr. JORDAN. I wasn’t playing games—— 

Mrs. MALONEY. I appreciate the leadership and passion of the 

chairman of this committee, Mr. Cummings, and I want to thank 

the advocates who advocated for it and my colleague from New 

York who—— 

Mr. JORDAN. Get the—— 

Mrs. MALONEY [continuing]. negotiated this hearing. And I want 

to ask a question about the 90 percent that the chairman talked 

about, the 90 percent of Americans that want to get access to this 

drug. And I want to ask Mr. Horn because how they get access is 

through the local healthcare system in our cities and in our states 

that are dealing with people hands-on every day. 

But first I have to say that I find it a national scandal that we are paying in this country $70 a pill while Australia pays $7 a pill. 

How fair is that? And, Mr. O’Day, you say that is because Australia 

negotiated a lower price. Well, we in America are going to pass a 

law that allows our government to negotiate a better price going 

forward. 

And today, we have two bills on the floor that will strike at this 

problem. It will end the abusive practice of drug companies where 

they pay to delay the development of generic drugs, a terrible abusive practice, keeping affordable drugs from our people. And the 

other will stop the practice where drug companies pay to block, 

they literally pay to block the development of lifesaving drugs here 

in America where it was pointed out it is the American taxpayer 

that puts the money in on the ground and starts the research that 

then moves forward. And then our people don’t have access to it. 

So, Mr. Horn, I want to ask you, how does this high cost of PrEP 

limit the ability of states and local health departments and clinics 

from scaling up and providing the drugs and support to the 90 percent of people who need it that the chairman mentioned? 

Mr. HORN. Thank you, Representative Maloney. I—first, I just 

want to sort of piggyback on one of your points and just—something that’s really important to recognize is when we consider 

where we have the highest number of new infections in the United 

States, if you overlap that map with another map of like where we 

have not expanded Medicaid, for example, we definitely see where 

there is a tremendous disparity. 

So when we’re thinking about those jurisdictions in particular, 

this is where we find a number of people who are vulnerable to 

HIV infection really do become increasingly dependent on this incredibly complex patchwork in order to access not just PrEP but all 

of the services that are required to support PrEP, lab testing, supported services, counseling, you know, engagement in care, access 

to a care provider, so on, and so forth. 

So—and I also just do want to reference that just with respect 

to, you know, that cost certainly isn’t our own issue. We do have 

issues of stigma, discrimination, so on, and so forth. But when we 

do take a look at what’s happening with health departments, I 

would just reiterate that for many of our health departments—and 

we do have a number of states have actually implemented state, 

you know, PrEP, your drug assistance programs. 

The one thing I will point out about that is that these are statefunded programs, but they’re not federally funded programs. There-
25 

fore, they do not have access to 340B discounting. Therefore, they 

are reliant on leveraging the very complex system in order to guarantee access to PrEP and the various services that are required. 

Mrs. MALONEY. I want to say that I have the privilege of resenting New York, which has been at the forefront in combating the 

AIDS epidemic. And, according to the city of New York, we have 

been making some progress. New AIDS/HIV infections in the city 

decreased by 36 percent between 2013 and 2017, but by increasing 

access to PrEP and making it affordable, they believe that they can 

bring new infections to lesson 700 cases a year. This would be a 

dramatic, dramatic improvement. And I am afraid that by basing 

our public health response largely on the generosity of a private 

company that says they are going to make it affordable, it should 

be affordable to everyone. It should be affordable to everyone. They 

shouldn’t have to negotiate having access to this drug. It is just 

putting the whole program in quicksand. It is not there to serve 

the people. 

So I want to ask what do we need to do to make this affordable 

to people in our public health system, in our cities, in our states, 

in our clinics, in our local areas, Mr. Horn? 

Chairman CUMMINGS. The gentlelady’s time is expired. You may 

answer the question. 

Mr. HORN. Okay. We just need to be conscious of cost at all 

point—I mean, we just need to make sure that we are able to procure both PrEP and the services that are required for PrEP at an 

equitable price and that we are moving in that direction. We’re 

moving toward generics. And we just need to keep an eye on that. 

That really is the great unifier in terms of ensuring access to everyone who requires preexposure prophylaxis. Thank you. 

Mrs. MALONEY. Thank you for your service. 

Chairman CUMMINGS. Mr. Meadows. 

Mr. MEADOWS. Thank you, Mr. Chairman. Thank each of you for 

your testimony. 

I would want to point out since my colleague from New York 

talked about voting on bills today, candidly, those bills today are 

nothing more than a political statement. There are both Republicans and Democrats—— 

Mrs. MALONEY. Will the gentleman yield? 

Mr. MEADOWS. No, I will not. You didn’t offer the same courtesy 

to my friend from Ohio, so—I will say this. I am dead serious on 

actually lowering prescription drug prices and making sure that 

availability is here. I am willing and have worked with my Democratic colleagues for us to put bills on the floor that actually are 

not a product of bipartisanship. It is not going to solve this problem. And so it is critically important that we allow for the R&D 

that happens that has groundbreaking drugs that come to market, 

that they continue, and that we make sure that availability for all 

Americans and indeed globally are there. 

But with that, I am going to yield the balance of my time to the 

gentleman from Ohio, Mr. Jordan. 

Mr. JORDAN. I thank the gentleman for yielding. 

The chairman talked about playing games. I am not playing 

games. I just want to thank a company who has developed a drug 

that has saved millions of people and not beat them up for that 
26 

fact. I mean, you can look at—on one hand, you go after them, and 

then you say, oh, but I am not really going after them. Look at the 

title of the hearing, ‘‘billions in corporate profits after millions in’’— 

you are going after them right in the title of today’s hearing. 

Dr. Grant in his opening testimony said that Gilead had nothing 

to do with it. I have gotten article, a peer-reviewed article from the 

New England—in fact, I would ask unanimous consent, Mr. Chairman—— 

Chairman CUMMINGS. Without objection, so ordered. 

Mr. JORDAN [continuing]. Gilead signed this, participated in this. 

I don’t remember any member thanking them for what they have 

done. 

Chairman CUMMINGS. I did. 

Mr. JORDAN. Not till after I did, that is for darn sure. 

So, look, as my colleague said, we want prescription drug—we 

want all drug prices to come down. We want that to happen, so 

let’s figure out a way to do it. But I don’t know that you do it by 

going after a company who has developed an amazing drug that 

has helped so many people, and they are taking the profits from 

that now, working on a cure. I don’t see where that helps us. 

So, anyway, Mr. Chairman, I would—or, excuse me, I will yield 

back to the gentleman from North Carolina. 

Mr. MEADOWS. I thank the gentlemen. 

So, Mr. Ezell, let me come to you. Really at this particular point 

what we have got is one of the greatest R&D abilities in terms of 

pharmaceuticals on the globe. In fact, most of the world looks to 

the United States for those groundbreaking drugs. Is that correct? 

Mr. EZELL. That is correct. The U.S. truly leads the world in both 

investment in life sciences R&D and commercializing drugs that 

come out of that R&D. 

Mr. MEADOWS. And why do we lead the world in that? Is it just 

that we have the greatest brainpower or why would we lead the 

world and be able to do that? Why does that come from here and 

not from some other country? 

Mr. EZELL. It’s a combination of factors, as I tried to indicate. 

First, a really strong complementarity between private and public 

investment. A lot of cases of public-private partnerships bring innovative new drugs to market. 

Mr. MEADOWS. So it is our coordination between the pharmaceutical industry, NIH, other areas where we have this to come up 

and have groundbreaking pharmaceuticals that actually meet the 

needs of not just the United States but certainly the world at large. 

Is that correct? 

Mr. EZELL. That’s a large part of it, also a wonderful STEM talent and pipeline, some of the best scientists in the world, and a 

system broadly that enables innovators to undertake the risky 

process of investing hundreds of millions if not billions into a drug 

and earned for a temporary period of time revenues from those innovations that can then be reinvested into future generations—— 

Mr. MEADOWS. So strong patents that actually help the proprietary investment that many companies make, is that correct? 

Mr. EZELL. That’s correct. 

Mr. MEADOWS. So if we look at that, one of the number-one complaints I get, though, is with the rise of prescription drug prices 
27 

and why can I get it cheaper, you know, in the E.U. and other 

areas? Is it our delivery system at times, the way that we have 

done this, and for me, a lot of this has come on in the last five decades as we have had a number of competing things that have happened with regards to the delivery system. Is there a way that we 

can still protect the patents, allow for research and development, 

and yet make sure that what both the ranking member and the 

chairman are talking about is that availability to underserved populations? Is there a way to do that without having it a governmentowned entity? 

Mr. EZELL. I think there—yes, there is certainly a way to do that 

without having a government-owned entity. The private sector remains the best engine of innovation in the life sciences. 

I think there are interesting things we should do. One thing, for 

instance, is we can think more thoughtfully about how to increase 

R&D efficiency. The biggest problem in the broader drug development system is so many drugs get to like phase three clinical trials 

and then fail, and that’s a massive cost for both the companies and 

the system. If we could focus on public-private partnerships like 

around translational research that would focus on how we can 

bring more efficiency to the R&D drug discovery process, that 

would be a very important way that we could broadly illuminate 

some of the cost in the drug discovery system. 

Mr. MEADOWS. All right. I look forward to working with my colleagues opposite, and I yield back. I thank the gentleman. 

Chairman CUMMINGS. Ms. Norton. 

Ms. NORTON. Yes, thank you very much, Mr. Chairman. This is 

a very important hearing, particularly for people who represent districts like mine, the District of Columbia. I am interested in PrEP 

because it is of course the cornerstone of the administration’s HIV 

plan, so it plans to increase the use of PrEP from a paltry 10 percent today to 50 percent within the next 10 years, so everything is 

riding on PrEP. 

I can’t resist asking you a question, Mr. O’Day. It is kind of a 

John Q. Public question. Instead of the donations you are offering, 

even some of the reductions, why not simply lower the price of 

PrEP? 

Mr. O’DAY. Thank you, Congresswoman. And obviously, your district is extraordinarily important in terms of HIV elimination and 

a part of the CDC program that we just agreed for the donation 

of medicine. 

So the answer to the question is that if we had lowered the price 

of our medicines even a decade ago, we wouldn’t be sitting here 

today with the innovations that are changing the face of HIV/AIDS. 

Ms. NORTON. Mr. O’Day, I think you testified that your company 

earned $36 billion in revenue, and you are telling me that at that 

rate of revenue, we just wouldn’t have PrEP at all? 

Mr. O’DAY. Without the investment back in research, we 

wouldn’t have PrEP today, and we wouldn’t also have the advances 

that we have with the talented scientists at Gilead looking at longterm—— 

Ms. NORTON. And so that price is justified? 

Mr. O’DAY. That price—— 
28 

Ms. NORTON. In order to get back any return on what you have 

invested in order to develop PrEP. Otherwise, you would be at a 

loss? 

Mr. O’DAY. Yes. The revenues are invested to a large percent 

back into R&D, and I just point out that everything that we start 

in early phase R&D trial has a 97 percent chance of failing. So exactly to Mr. Ezell’s point, this is a very complex iterative process 

that requires a lot of investment, but, more importantly, requires 

no—— 

Ms. NORTON. But this one didn’t fail—just reclaiming my time. 

So I would like to go on and find out the feasibility of the use of 

PrEP by asking Ms. Walensky how feasible is this goal I mentioned 

to get from 10 percent to 50 percent within 10 years, after which 

you have heard Mr. O’Day testify, how feasible that we will get 

there? 

Dr. WALENSKY. Thank you. We aspire to laudable goals. This 

one’s going to be hard, and I will tell you—— 

Ms. NORTON. Will reducing the price be necessary? 

Dr. WALENSKY. I think we need to put PrEP in the water is what 

I think we need to do in order to get this epidemic under control 

and the places that don’t have access to PrEP. I think, you know, 

the data from South Wales that said that they were able to decrease incidence by 25 percent, they essentially give it to almost everybody. They did everything that they could to get PrEP to a lot 

of people, and so we need to do everything that we can. 

We know that since PrEP has been available, there has been no 

dent in incidents. It’s been unchanged, and so if that’s going to be 

the case, we need to sort of figure out—that 10 percent access 

hasn’t done anything to the incidents. 

Ms. NORTON. No effect. Mr. Horn, does it trouble you that the administration’s plan relies so heavily on the donation of free drugs 

from Gilead? We are going to get there with these kinds of donations? 

Mr. HORN. Donations help. They don’t solve anything. I’ll give 

you the example. When we have looked at the U.S. response and 

I think the response globally, when we took a look at what happened when we had our major innovator manufacturers who were 

donating drug to low-income countries, that only got us so far. 

What was really required there was a reduction in price. Really 

that was spurred by robust generic competition to ensure equitable 

access and affordability to our programs. 

And so let me be clear. I think the donation will help, but it is 

not the panacea that we require. 

Ms. NORTON. I just want Mr. O’Day to know that everybody affords your donations and charity, but I think we would actually 

prefer you to go back to old-fashioned capitalism and reduce the 

price. 

Thank you, Mr. Chairman. 

Chairman CUMMINGS. Mr. Norman? 

Mr. NORMAN. Thank you, Mr. Chairman. 

Mr. O’Day, I appreciate you justifying and coming up here. You 

know, you are being put in a position of being a bad guy, I mean, 

by the questions you are asked. Your company competes with other 

drug companies. You are not the only company that took the inno-
29 

vation and the time and the effort to go after a treatment, which, 

as Congressman Jordan said, you are having the people that ordinarily would not have a chance to live, they are living now. 

Now, I am all for lowering prices. You do that through competition, through capitalism, so I want to thank you for doing that and 

really for taking some of these questions, which is really amazing 

to me. 

You know, Australia, the drug that has been quoted for $8, 

where were they when the innovation—where were they—why 

didn’t they invent the drug? Why didn’t they go through the trials 

and the studies that you did over time? 

But, Mr. Ezell, you are in a good position to I guess answer questions as far as the many times that this country has led an innovation and putting drugs on the market that other countries either 

couldn’t or wouldn’t or didn’t do. What effect if—go through the 

trials that failed and who foots the bill for that with different companies, yours particularly? 

Mr. EZELL. I’m sorry, could you restate the question? I didn’t— 

could you restate the question? I didn’t entirely understand what 

you are asking. 

Mr. NORMAN. Could you—well, my question is, you know, part of 

the reason—you are in a unique perspective on the innovation that 

is occurring in this country. The U.S. is a leader in innovation, as 

I have said. You succeed in bringing lifesaving drugs to the market. 

And you improve the lives of Americans who desperately need 

them, as has been said today. I think part of the reason is because 

when a drug fails in the pipeline, it is the company primarily who 

suffers the financial loss. Could you elaborate on this point? 

Mr. EZELL. Well, essentially—and that’s exactly right. The simple reality is that the process of bringing an innovative new drug 

to market is risky and extremely expensive. I could quote studies, 

the most recent one from Deloitte estimating that—that study 

shows that over six of the past eight years the cost to bring an innovative new drug to market has risen. Now the average in 2018 

was about $2.1 billion. 

It really is the private sector of the United States. That’s the 

only entity at a large scale in the world who’s willing to undertake 

these incredibly risky and expensive investments and be willing to 

accept failure rates that, as Mr. O’Day has said, can exceed 95 percent. We have a system in place to bring talent and capital to the 

world’s most innovative companies, to bring breakthrough solutions 

to market. 

And I would also ask the committee to understand that their deliberations today importantly about the price of Truvada will also 

have implications for a number of other drugs because we care not 

only—although we care deeply about those patients who suffer 

from HIV/AIDS, we care about those who are affected by maladies 

that we currently do not have solutions to. And the genius of America’s life science innovation system is that we’re able to put in place 

a system that enables us to invest to try to solve challenges that 

are currently unsolved by the frontiers of medical science, and 

we’re the best country in the world doing that. 
30 

Mr. NORMAN. You are planning for the future and you are reinvesting to help the lives that you are saving already, making it better. 

Dr. Walensky, some of my colleagues are advocating for breaking 

the patent system in the United States as a way to address drugs. 

Would this work? 

Dr. WALENSKY. Well, you know, one of the things I want to get 

to is the fact that several people have described that with an earlier patent—an earlier-going generic, a year earlier, I want to just 

emphasize that the only way drugs prices come down in the generic 

market is if there’s generic competition. So the fact that this is 

going to be—the patent is going to be broken a year earlier and 

there will be one company making a generic drug is not going to 

decrease the price of Truvada. Maybe it’ll decrease it by five or 10 

percent, but we’re not going to get the discounts that we need such 

that the patients who need to access it will be able to access it. 

I do think that—you know, it’s not that I don’t believe that the 

companies need to profit. I do believe that companies need to profit. 

I do believe we need new drugs. We certainly need them in HIV, 

we need them in antimicrobials, we need them in a lot of different 

places. But I do believe that Gilead has already profited enough, 

especially in the context of a Presidential call to end the epidemic 

here. So I think that that would work here. 

Mr. NORMAN. You think they have profited enough, and that is 

your opinion. 

Dr. WALENSKY. Certainly on this drug for this indication, I do. 

I do. I think this is a public health mandate. Not all—— 

Mr. NORMAN. Thank you. Thank you so much. I yield back. 

Chairman CUMMINGS. Mr. Connolly. 

Mr. CONNOLLY. Thank you, Mr. Chairman. 

My friend from Ohio, the ranking member, has attempted to discredit the purpose of this hearing and in the process discredit those 

of us who raise questions, legitimate questions about the pricing of 

a lifesaving drug. 

I am here because of one of my best friends. His name was Rick. 

He developed AIDS in the late 1980’s when there was no cure. He 

died when my daughter was just a few months old in 1991. I spent 

a lot of time with him during the illness. I saw its progression. I 

saw his suffering, terrible symptoms. It ultimately went to his 

brain, and he started hallucinating. Maybe there was a blessing 

there because he was not any longer aware of his suffering. 

He lost his job because of the illness and was uninsured, and he 

didn’t have access to health care. He went to a homeopathic clinic 

because he was hopeful maybe that would work. It seemed to only 

make his suffering worse. 

So, Mr. Jordan, I am not here to discredit an American company 

or Mr. O’Day. I am here for my friend Rick. I am here to make sure 

no American has to go through what Rick went through and that 

drugs are available to people who are suffering. And I would say 

to you, Mr. Jordan, that is a legitimate source of inquiry. 

I am not going to yield because I am going to run out of time 

unless the chairman grants me more time. 

So I just want to make that really clear. Most of us absolutely 

subscribe to the thought that a drug company has to recover profits 
31 

because it recovers cost and legitimate R&D that can produce more 

lifesaving drugs. But the question in front of us is how much is 

enough? How high do you go to the point where it becomes a barrier to access? It may help your bottom line, but it doesn’t help people like Rick. 

And I think that is a legitimate form of inquiry. And given that, one notes that, right now, the cost of Truvada is about $70 per day 

if you are paying full freight. Is that correct, Mr. O’Day? 

Mr. O’DAY. That’s correct. 

Mr. CONNOLLY. In Canada, it is $5 a day. In Australia, it is $7 

a day. And, to be fair, in Canada, that is generic. For the branded 

product, it is $20 a day, not $70. Now, they have different systems, 

but it is the same drug. 

Mr. O’Day, when Truvada was first approved as a treatment in 2004, you had a list price of $800 per month. By 2012 when you 

were approved for preventing HIV transmission, that price had almost doubled to $1,400 a month. In your statement today you claim 

you did not increase the price of Truvada when it was approved in 

July 2012, correct? That is in your statement. 

Mr. O’DAY. The—there was no—there was an increase in 

2012—— 

Mr. CONNOLLY. Yes. 

Mr. O’DAY.—so it was—over the past—since 2004, the average 

increase has been around—— 

Mr. CONNOLLY. But in your statement you said today you did not 

increase the price of Truvada when it was approved. And I would 

suggest respectfully that is a little misleading because you had just 

raised the price six months earlier, and you raised it again six 

months later. 

Mr. O’DAY. So, Congressman, I understand your point. What I 

was trying to assert was there was no additional increase to the 

price as a result of the additional indication. 

Mr. CONNOLLY. So let me ask a question in terms of corporate 

deliberations. I worked in the corporate world for 20 years. When 

you look at pricing and when you looked at pricing, did you have 

a discussion about, okay, corporate profit, we want to maximize our 

profit, but on the other hand, we also understand our, you know, 

community obligation to suffering people and so we have to strike 

a balance here? Does that factor into the pricing of the drug? 

Mr. O’DAY. Absolutely, Congressman. And there are four things 

that we look at critically when we price a medicine. First of all, 

what’s the value of the medicine to the patient and society? The 

most recent figure associated with the disease HIV/AIDS that it 

can cost on average $880,000 per patient to treat that disease, so 

that’s given into context. 

The second thing is what the comparable treatments that are on 

the market today? 

The third and potentially most important is exactly to your point. 

What are the access limitations that might be created by setting 

that price, and we anticipate that in advance. 

And then the fourth one is our commitment to reinvest back in 

research not just for this medicine and not just for this disease but 

for other terribly devastating diseases that inflict Americans and 

the globe. 
32 

Mr. CONNOLLY. Well, Mr. O’Day, I appreciate that, and I just 

want to say I hope today’s hearing is something that will give you 

thought and is something that maybe you will take back to the corporate boardroom to reevaluate the pricing of a drug that so many 

people need access to. 

And I want to thank the chairman for having this hearing on behalf of my deceased friend Rick, your deceased employee, and the 

millions of Americans who have succumbed to this terrible virus. 

Thank you. 

Chairman CUMMINGS. Mr. Hice? 

Mr. HICE. Thank you, Mr. Chairman. 

Mr. Ezell, could you explain in basic terms the law that addresses intellectual property that comes from federally funded research? 

Mr. EZELL. Yes, Congressman. It’s called the Bayh-Dole Act. It 

was introduced on a bipartisan basis in 1980, but what it does is 

it gives universities and public research institutions the rights to 

innovations that stem from federally funded research at their institutions. 

Mr. HICE. And before 1980, before that law, do you have any idea 

how many patents the U.S. Government owned? 

Mr. EZELL. Yes, so in 1978 the Federal Government had licensed 

less than five percent of the 30,000 patents owned at the time. 

There was a massive underutilization and a lack of commercialization of intellectual property and knowledge that was sitting in laboratories across the United States. 

Mr. HICE. So before the law, then, there were approximately 

30,000 patents that the U.S. Government owned, only about five 

percent of which, however, had commercial licensing. Is that correct? 

Mr. EZELL. That is correct. 

Mr. HICE. All right. And why is that? It is a lot of patents, a lot 

of potential great benefits out there, only five percent in the commercial market to go out to the public. 

Mr. EZELL. Well, that’s right because, well, first, government institutions and universities were not equipped or expected or it 

wasn’t their intent to incur the risk that would be required to, you 

know, take those technologies or inventions and bring them to the 

market as commercializable—— 

Mr. HICE. And neither is the government? 

Mr. EZELL. In fact, an interesting story was from the year 1968 

when President Johnson asked Elmer Staats, who was then the 

comptroller general of the United States, to analyze how many 

drugs had been developed from NIH-funded research, and Johnson 

was stunned when Staats’ investigation came back and said that 

not a single drug had been developed when patents were taken 

from universities for commercialization by the Federal Government. Staats’ report from 1969 found that—we found hundreds of 

new compounds developed at university laboratories that had not 

been tested and screened by the pharmaceutical industry because 

the manufacturers were unwilling to undertake the expense without some possibility of obtaining exclusive rights for further development. It was not until they put in place the Bayh-Dole Act of 

1980 that we—led to an explosive growth of innovations stemming 

from federally funded research. 
33 

Mr. HICE. That is my point exactly where I want to go with this. 

And so you had the Federal Government pretty much in charge of 

all the patents until Bayh-Dole. Then things started changing and 

actually patents were able to get into the hands of commercial licensing and thereby get to the needs of the population. 

Can you briefly explain what the march-in provision is in BayhDole? 

Mr. EZELL. Yes, so the march-in provision is language that would 

in very specific limited cases give a government agency the ability 

to, quote, ‘‘march in’’ and compel the divulsion of the intellectual 

property or force additional licenses on an innovation that was a 

result in part from some degree of Federal—— 

Mr. HICE. And, real briefly, what would be—I am assuming that 

would be like an emergency? 

Mr. EZELL. Yes, so when the architects of the Bayh-Dole Act, Bob 

Dole and Birch Bayh, designed the legislation in the early 1980’s, 

the reason they conceived of putting in the march-in rights was primarily to ensure that a licensee took the steps to commercialize 

the—— 

Mr. HICE. The whole point was to get it to the public when there 

was a need? 

Mr. EZELL. That’s correct. 

Mr. HICE. So has the march-in provision ever been used by the 

Federal Government? 

Mr. EZELL. No, not—no, it has not. 

Mr. HICE. All right. So what kind of impact would using the 

march-in impact have on research and development? 

Mr. EZELL. I think there’s a real risk that, if you ever used 

march-in rights, it would substantially stifle the potential of research and development. If the government ever had the capacity 

to march in decades later and compulsory license the IP on a pending pharmaceutical drug on the grounds that some of it was contributed by federally funded research and now some number of decades later the government declares that that price is unreasonable, 

that will give enterprises serious pause about investing the enormous sums required to bring innovative new drugs to the marketplace. 

Mr. HICE. So—— 

Mr. EZELL. It would stifle innovation. 

Mr. HICE. So, in other words, there would be a great disincentive 

for research and development in various companies if they spent 

the billions of dollars, if they assumed the risk to develop drugs, 

and then all the while knowing that the Federal Government could 

march in and take that patent away from them, you are saying 

that would massively disincentivize R&D? 

Mr. EZELL. That’s correct, Congressman. There was a great case 

from 1995, something called CRADAs, cooperative research and development agreements, in 1989 the NIH inserted a reasonable-pricing clause into those CRADAs. The amount of collaboration between industry and government subsequently cratered. And when 

that requirement for original pricing of a subsequent innovation 

was repealed, the number of CRADAs instantaneously rebounded 

in 1995 and we again stimulated effective public-private partnerships toward developing new drugs. 
34 

Mr. HICE. Thank you. Thank you, Mr. Chairman. 

Chairman CUMMINGS. Mr. DeSaulnier? 

Mr. DESAULNIER. Thank you, Mr. Chairman. Thank you for having this hearing. Thank you to everybody who has been behind 

this. 

As somebody who has a pill in my pocket that I will take at three o’clock that keeps me alive that in Australia costs $6, here in the 

United States it costs $400, Johnson & Johnson distributes it. I am 

told it is going to $500, but it keeps me alive, so I am happy that 

I have health insurance that pays for it. 

So I have spent a good deal of time in the last four years since 

I was diagnosed with chronic lymphocytic leukemia trying to figure 

this out. And what is a good reasonable rate of return to get people 

from private sector to invest and what do we get as taxpayers? 

NIH has a figure that shows since 1974 the NIH’s research has 

contributed $77 trillion to the U.S. GDP. 

So having gone out there now multiple times and Dr. Grant having—Mr. O’Day, as somebody who is a resident of the bay area I 

take it now, as somebody who lives in the bay area, moved to San 

Francisco in the 1970’s, went into the restaurant business, I sit 

here and think of the friends, the coworkers, the people who 

worked for me when I owned restaurants who passed away and 

what that did to the culture in San Francisco having moved there 

from the west end of Boston—not a bad facility, by the way, but 

it is no UCSF—and having one of my oncologists be one of your colleagues, Dr. Kaplan at UCSF, who put some work into this as well. 

The numbers that I have from the Washington Post article is the research that you got or the grants you received was $50 million, 

as has been said, $50 million from NIH and then about $17 million 

from the Gates Foundation. Were there other significant contributions from this company or others to your research? 

Dr. GRANT. Gilead did not provide funding. They did donate 

medications, and it was that donation that justified their listing as 

authors on the publication cited before. Importantly, my study was 

not the only study done in PrEP. The CDC funded and performed 

its own study in Botswana and in Thailand, and the NIH also 

funded a study in—called VOICE in Africa. The total U.S. Government investment in PrEP is much more than the $50 million from 

my project. It’s in the hundreds of millions of dollars paid by the 

U.S. Government for the development of PrEP. 

Mr. DESAULNIER. So, Dr. Grant—and actually, Mr. O’Day, I 

think your career is a similar—I remember reading a book Our 

Daily Meds years ago, and that reporter from the New York Times 

did a wonderful job of doing an investigation of the influx of venture capital into this pharmaceutical industry that traditionally, 

40, 50 years ago, the CEO of pharmaceutical companies were researchers like yourself who went to work for the private sector and 

moved up the chain of command. And they weren’t driven by the 

market forces that are currently driven. 

So my question is—and I have an amendment on the floor today 

that I would like to get bipartisan support, and it goes to a little 

bit of the history that Mr. Ezell was talking about. In her investigation, she says that investors looked at professions that people 

trusted, and people with white smocks people trusted. And that 
35 

changed the culture. It brought a lot of pressure to get return on 

investment. 

Mr. O’Day is somewhat legendary, as I read your history, about 

managing pharmaceutical industries. You are on the board of 

Genentech. You are on the board of California Life Sciences, which 

I have great respect for. 

So my question is—my amendment is actually to get the Academy of Sciences to do a study that does the history but helps us 

understand what is the best investment and what is the base that 

we get from NIH, which I believe is underestimated. And then, to 

my Republican colleagues, what is a reasonable rate of return that 

will bring investors in to do what they do? 

So when you look back on your career, how much better would 

it be now if we had that information and you could do the base? 

And maybe it would be more efficient when we argue about patent 

controls in the CDC and this company. Maybe there is a more efficient way to do this for the consumer, for the shareholder, but 

mostly, importantly, for the person whose life is being extended, as 

they do in Australia, as I understand. 

They have a discussion about, for instance, this drug or my drug in Australia is $6 when it is subsidized when they go through the 

process, and the risk to the client. If it is fully loaded, it is like $35 

a day, so I don’t understand why it is $500 a day here. 

Dr. GRANT. I don’t understand that either, sir. 

Mr. DESAULNIER. But we need to find that out to have a rational 

conversation. And I invite my colleagues on the Republican side for 

a more efficient look at how do you attract these investments and 

get what we want, longer and higher-quality lives for American 

citizens? 

Dr. GRANT. You know, I think you’re raising all the right points. 

And it’s important to realize that both components of Truvada, 

tenofovir and emtricitabine, were developed in academic centers 

using public funding. 

Mr. DESAULNIER. Right. 

Dr. GRANT. And then those property rights were purchased by 

Gilead. And, you know, people at Gilead will say that they invented 

those products, but in fact they were invented in academic centers 

using public funds and then purchased by Gilead, who then co-formulated, meaning mixed it into a single tablet. And the mixture in 

the single tablet is what allowed them to extend their patent rights 

beyond 2017. 

And so when we look at innovations, the CDC brought us 

preexposure dosing, they brought us information that the mixture 

of two drugs was much more important than one drug and, you 

know, Gilead’s invention was really buying products developed with 

public funding in the academic sector. So this synergy between academics and private industry is important, but I think that we need 

to be more honest, as you’ve proposed, about who is doing what in 

all of this and how much should be charged later. 

Mr. DESAULNIER. Thank you, Mr. Chairman. I really hope we 

continue to pursue this question because it clearly is a life-determining question that needs to be answered by the American people. 

Thank you, Mr. Chairman. 

Chairman CUMMINGS. Mr. Grothman. 
36 

Mr. GROTHMAN. Thank you. Mr. Ezell, I kind of want to talk to 

just in general an overview because I think the hearing today 

touches not just on a particular drug but things across the board. 

And we talk about the interaction between the private drug companies and NIH funding. And really not till we have this hearing 

that, you know, it occurred to me that we are putting billions and 

billions of dollars a year into the NIH, and I don’t know whether 

we are getting bang for the buck or we should be, you know, getting some other way to get cures for these diseases. Of the $37 billion we put into NIH, how much of that do you 

think goes into pharmaceutical development if you had to guess? 

We are not going to fact-check you. 

Mr. EZELL. I’m not an expert on the share of the allocation of the 

NIH’s budget across its 27 research institutes. Their funding of the 

NIH goes to a number of activities from training future scientists 

to looking into very basic research trying to understand the basic 

molecular processes of how diseases work, trying to identify biomarkers that can single future targets for innovation opportunities. 

But certainly the majority of NIH’s research is going into this basic 

science trying to understand fundamental molecular activities, and 

a much smaller portion of their research is going toward development-oriented activities. 

Mr. GROTHMAN. Okay. As far as drug development, not just what 

we are talking about today but collectively, do you feel—or could 

you describe the different—well, do you know how much is spent 

every year on what we will call drug development by the private 

pharmaceutical industry? If you can’t give me an answer, we will 

ask Mr. O’Day. 

Mr. EZELL. In the year 2013 there was $96.5 billion, as I understand. The average over the past three years has been about $80 

billion per year. 

Mr. GROTHMAN. How many? 

Mr. EZELL. Eighty billion dollars. 

Mr. GROTHMAN. Eighty, so we are going about 80 billion. So, in 

other words, far and away most of the research in this country 

done on drug development is done by private industry, and what 

we get out of NIH is a small fraction? 

Mr. EZELL. That’s exactly right. 

Mr. GROTHMAN. Okay. Could you give me an example of other 

success stories coming out of NIH? 

Mr. EZELL. Well, there are a number. We can look at the invention of Gleevec, treatments for chronic myelogenous leukemia. That 

was a nice set of case studies that the original research was conducted by Dr. James Allison I believe at the University of UCLA 

I believe, and then some of his basic discoveries into how genes 

work gave rise to a new form of treating cancers called checkpoint 

blocking that we were able to identify specific antigen growth factors in the body, and then that set of basic research was ultimately 

licensed to the private sector, and Bristol-Myers Squibb invested 

the hundreds of millions required to now turn that into a first-inthe-world—— 

Mr. GROTHMAN. Do you feel overwhelming—and I don’t mean to 

put words in your mouth—overwhelming the number of pharmaceuticals that are having an effect on our lives or extending lives 
37 

with people with various diseases? I suppose there is a difference 

in the type of things that are financed by NIH and the private industry. Could you comment on the differences between which type 

of drugs each sector goal was after or any reasons why you would 

feel one does a better or worse job than the other? 

Mr. EZELL. Well, it is the private sector that is primarily incurring the risk of doing the applied research and in conducting the 

grueling set of three stages of clinical trials that are proving the 

safety and efficacy of that drug. And the private sector is the one 

who is assuring that the formulation is effective and works in the 

human body, and then of course the FDA is working with the private sector to validate that fact. 

But the system we’ve put in place is now responsible for the fact 

that there are 7,000 new-to-the-world drugs under development 

globally, and it’s estimated that at least 3,600 of those are being 

led primarily by U.S.-headquartered enterprises. 

There’s a lot to do. I’m not satisfied, as wonderful as Mr. O’Day’s 

drug is. We need a cure for HIV/AIDS. We need a cure for various 

forms of cancer. It’s wonderful that there’s competition in the workplace Mr. O’Day’s—O’Day’s company faces the loss of competitiveness. It faces existential threats hopefully from the innovators out 

there who are trying to build a better solution, and I think it’s important that we broadly focus on the system we have in place in 

America that enables competition and enables innovation so that 

we can try and come up with some of these cures. 

Mr. GROTHMAN. Can I give you just one broad question? Does the 

chairman mind? 

Chairman CUMMINGS. The gentleman’s time is expired, but you 

may answer this question. 

Mr. GROTHMAN. Okay. My disease of interest is Alzheimer’s. Do 

you feel, as far as we look for a cure there, that will more likely 

come from the private sector or from NIH, or could you comment 

on that? 

Mr. EZELL. My organization actually did a study looking at the 

economic impact if we were able to come up with a cure for mental 

diseases. We estimated that the value to society would be as much 

is $1.5 trillion. I would support an all-of-the-above solution to innovate for cures like Alzheimer’s. It’s estimated that the real-time net 

present value of curing Alzheimer’s alone would be about $50 trillion for the U.S. economy. So these are massive numbers we’re 

talking about over a period of time, so I applaud research that’s 

being supported by nonprofit and foundational actors like the Gates 

Foundation toward that end. That may be a pathway to innovating 

such a drug. 

But I note that there are hundreds of clinical trials ongoing even 

now to solve various forms of mental diseases being led by the private sector, and that’s, I think, probably a—I mean, historically, 

that—historically across a broader set of disease states that’s been 

a more likely pathway to getting toward a solution toward a breakthrough cure. 

Chairman CUMMINGS. Mr. Rouda. 

Mr. ROUDA. Thank you, Mr. Chairman. 

I would like to talk about two different issues. One is just the 

government’s commitment under the President’s stated objectives 
38 

to addressing HIV infections and then also talk after that a little 

bit about the balance between innovation and drug pricing. 

So, Mr. Horn, I will start with you. The President has stated that 

he wants to reduce infections by 75 percent in the next five years 

and 90 percent in the next decade, yet we have seen systematic attacks on the ACA and funding for community institutions and 

Medicare and so on. What kind of impact is that going to have in 

our ability to address HIV infections? 

Mr. HORN. It has a profound effect. We rely on these systems, 

and we fight very hard for these systems. And I will say that we 

actually fight very hard against these systems sometimes just to 

ensure that. 

But in order to do this—and I think that we realize this. When 

we’re just beginning to think about, you know, just getting—just 

maximizing the number of people who are living with HIV to getting them biologically suppressed. What is making that possible, 

what is getting us there is the Affordable Care Act, as all of the 

systems under the Affordable Care Act. And I think when we do 

think about this in the context of primary prevention or PrEP or 

just the prevention for those who are vulnerable to HIV infection, 

the same holds true. We absolutely need the ACA and, frankly, we 

need Medicaid expansion to make that happen. 

Mr. ROUDA. And actually, if we had universal healthcare, much 

of the issues that we are having when talking with Gilead about 

and any other drug manufacturer about those costs, many of those 

disagreements would go away because we would have properly 

funded, systemwide care for all Americans. 

Mr. HORN. That is correct. 

Mr. ROUDA. And, Mr. Ezell—and hopefully I pronounced that correctly—you made the comment earlier that the NIH plays such an 

important role in the development of new drugs, yet the President 

has three straight years tried to make massive cuts to the NIH. 

Wouldn’t that diminish our opportunity to continue to have innovation in the development of drugs through that public-private partnership? 

Mr. EZELL. Absolutely, Congressmember. In fact, this is perhaps 

the most fundamental threat to the U.S. innovation economy. If the 

United States—essentially, today, the U.S. invests the least it has 

in federally funded R&D as a share of GDP since 1995—1955. To 

match our investment on average in the 1990’s—— 

Mr. ROUDA. Sixty-five years roughly, 64 to be exact. 

Mr. EZELL. Correct. On average, to match the Federal Government’s investment in R&D that we averaged in the 1990’s, we 

would have to invest 80 percent more per year today. And we’re 

seeing that manifest itself within NIH even. The average age of 

first NIH ROI grant has increased from 34 to 42 years, eight years 

later in life. The average success rate has declined from close to 60 

percent in 1962 under 20 percent today. And if we don’t make that 

right, we risk losing our—— 

Mr. ROUDA. I understand. 

Mr. EZELL [continuing]. international competitiveness. 

Mr. ROUDA. Thank you. And, Dr. Walensky, I am not sure if this 

is the appropriate question for you, but I am just curious. When 

we look at the societal cost of not doing anything to making sure 
39 

that we have proper medication and putting a number on that 

versus the cost of providing these drugs to all those, has that analysis been done, and if so, is there any indication as to what it 

would do? 

Dr. WALENSKY. I think—we haven’t done what the status quo is. 

We know that if we invest in this, it will be a cost-effective investment. I want to just comment on something Mr. Ezell said, and 

that is that, currently—and I’ve screened every infectious disease 

fellow who comes in the door at Massachusetts General Hospital. 

Nationally, we have .7 applicants for every infectious disease position in the country. That is—the Indiana HIV outbreak that occurred, there was no infectious disease doctor in that county. And 

if we don’t invest in the NIH to do—— 

Mr. ROUDA. Right. 

Dr. WALENSKY [continuing]. these things, we will not have those 

physicians. 

Mr. ROUDA. Mr. O’Day, I heard testimony that the list price is 

$1,780 to approximately $2,000. That list price, let’s just assume 

for simple math, $2,000. If you sell a monthly prescription for 

$2,000, does that go to your revenue line? 

Mr. O’DAY. The $2,000 would go to the revenue line, that’s correct. 

Mr. ROUDA. And then the pharmacy benefit managers, PBMs, 

about roughly what percentage of that $2,000 would be paid to 

them? 

Mr. O’DAY. Well, actually, the discounting in the commercial sector is actually quite small because the cost-effectiveness of this 

medicine has not required that discounting. When you look into the 

public sector, however, we have very deep discounts, so 70 to 80 

percent discounts, for instance, for Medicaid, for ADAP, and for all 

the government programs. 

Mr. ROUDA. And, one last question, the billion dollars of investment that you noted earlier, is that an ordinary or a capital expense on your income statement? 

Mr. O’DAY. That’s ordinary, yes. I mean, there could be capital 

components to that, but the vast majority is recurring expenses, 

year-on-year invested in R&D, into people, and into costs that support our research and development. 

Mr. ROUDA. Thank you, Mr. Chairman. 

Chairman CUMMINGS. Before we go to Mr. Comer, Dr. Walensky, 

you said something about .7 percent. Can you say that again? I 

think I misheard you. 

Dr. WALENSKY. Unfortunately, you probably didn’t. 

Chairman CUMMINGS. I hope I did. 

Dr. WALENSKY. For every infectious disease fellowship slot that 

we have in this country, we have 0.7 applicants. There has been 

a New York Times editorial in the last week that—or in the last 

month by Matt McCarthy that demonstrates that we are going to 

have a shortage of infectious disease doctors. We know we are anticipated a shortage of infectious disease doctors. Some of the counties that have had HIV outbreaks, there have been no infectious 

disease doctors in them. And so, yes, I think we have a public 

health problem. Part of that is related to NIH funding and seeing— 
40 

because we are what we call a cerebral field, we rely on NIH dollars to recruit applicants into the field. 

Chairman CUMMINGS. Mr. Comer? 

Mr. COMER. Thank you, Mr. Chairman. And we have already hit 

on the important roles of private-sector versus public sector in the 

R&D process and also the role of having strong patents and the 

consequences if the government breaks patents on drugs like 

Truvada. We have also hit on the major scientific and regulatory 

risks and hurdles you have had to take in to market Truvada. 

Overall, though, I just want to reiterate the great role that 

Gilead has played in innovations in antivirals, and I hope we can 

continue to save lives because that is something that we agree on 

in a bipartisan way. 

Switching gears, I want to talk about the President’s initiative 

to eradicate HIV. From what I understand, the bulk of the Trump 

administration’s plan to eradicate HIV is the ability to locate every 

American susceptible to HIV and provide a drug and provide help 

adhering to the daily regime for the rest of their lives. That is no 

easy task. The cost of doing that will be daunting. About 1.1 million Americans have the virus, and about 1 million are at risk of 

contracting it. Finding, treating, and keeping them all on treatment experts estimate would be more than the administration currently is devoting, even in addition to the $20 billion the Federal 

Government already spends on HIV prevention and treatment. 

There are criticisms that if the patent on Truvada remains, the 

Trump administration’s plan to eradicate HIV would cost over $20 

million. 

So, Mr. O’Day, let me start with a few questions. How many bottles of Truvada has your company Gilead donated to the U.S. Government? 

Mr. O’DAY. So our commitment is to donate 2.4 million bottles 

per year for up to 10 years. 

Mr. COMER. Okay. I think Mr. Jordan asked this question. When 

is a generic version coming onto the market? Do we know? 

Mr. O’DAY. A generic version of this medicine Truvada comes out 

into the market in September of next year, 2020, and other 

generics will come on six months later. 

Mr. COMER. And you did, as I understand, voluntarily release the 

patent early? 

Mr. O’DAY. That’s correct. In discussions with—and it was a 

legal decision at the end of the day and an important decision to 

avoid the cost of litigation and to bring this medicine sooner to patients. It’s important to note that when the patent expires for 

Truvada, the next most safe, most effective medicine will take its 

place in the donation—— 

Mr. COMER. Right. 

Mr. O’DAY.—for 2.4 million bottles for the next 10 years. We 

want to make sure that the uninsured patient population in America has access to state-of-the-art care at all times over this decade. 

Mr. COMER. With those developments, how much closer are we 

to eradicating HIV? 

Mr. O’DAY. Well, I think, as has been mentioned, the—you know, 

it’s—I think it’s within our grasp. It’s clearly challenging. It’s, as 

I’ve tried to articulate, based upon the Gilead programs. You know, 
41 

it’s really not about drug pricing. It’s about—in this particular case 

is about the wraparound care. I think the administration and CDC 

and HHS’ efforts to, you know, reduce by 70 percent in five years 

and 90 percent in 10 years is within our grasp, but it does require 

a holistic approach to the wraparound care. 

Many people have talked about Australia here, which I think is 

interesting to look at in some regards. In Europe, generics have 

been available for three years, and even with the lower cost of 

medicines in Europe, we’ve seen very little increase in HIV PrEP, 

which goes to show you that there are many, many elements of this 

system—— 

Mr. COMER. Right. 

Mr. O’DAY.—that have to be invested in. 

Mr. COMER. Right. What proposals currently would hinder the 

progress of eradicating HIV or any prospect of a cure or vaccine to 

HIV? What proposals have you heard out there that would hinder 

that? 

Mr. O’DAY. Well, I think that’s—I mean, the current initiative is 

focused on the available antiretrovirals, which are very effective 

but have drawbacks in terms of getting them into the hands of the 

patients at the right time. So what our scientists are doing is 

they’re working on longer-term medicines. Those could be delivered 

once a month, once every three months, long-acting, which I think 

could help us desperately with this solution of HIV elimination and 

eventually the cure. And the cure is still—it’s I wouldn’t say within 

our grasp today. There’ll need to be a lot of failures to get there, 

but we’re firmly committed at Gilead to investing in that research, 

to keep having the 90 percent failure rates and finding eventually 

that 3 percent cure, which we’re firmly committed to. We won’t rest 

until we get there. 

Mr. COMER. Right. Thank you. Mr. Chairman, I yield back. 

Chairman CUMMINGS. Ms. Hill? 

Ms. HILL. Thank you, Mr. Chairman. I ask unanimous consent 

to enter into the record a Washington Post article from 2016 entitled ‘‘The drug company that shocked the world with its prices 

dodged $10 billion in taxes,’’ report says. 

Chairman CUMMINGS. Without objection, so ordered. 

Ms. HILL. Thank you. We have talked about saving lives, but, as 

a corporate executive, Mr. O’Day, let’s talk about money. Just as 

you are responsible for your budget, I am responsible for our taxpayers’ money, and in this case our worlds collide. Mr. O’Day, how 

much does Gilead spend per year in direct costs for patient care for 

people with HIV and AIDS? 

Mr. O’DAY. I don’t have the exact figure, Congresswoman, but it’s 

in the tens of millions of dollars. 

Ms. HILL. You pay for direct care? 

Mr. O’DAY. We pay—we fund community support groups that 

support patients in a variety of different ways. We’re the largest 

corporate donor to community funding—— 

Ms. HILL. That’s great. Is it true that you get a tax break for 

those corporate donations? 

Mr. O’DAY. Yes. 

Ms. HILL. Okay. 

Mr. O’DAY. Yes, it is. 
42 

Ms. HILL. Okay. So, effectively, you don’t spend money on direct 

patient care. But do you know how much the U.S. Government 

does? 

Mr. O’DAY. No, we do spend money on patient care. We may get 

some tax benefits of that, just to correct—— 

Ms. HILL. Okay. Okay, but—— 

Mr. O’DAY.—but absolutely spend, and we have an outflow in our 

P&L that’s—— 

Ms. HILL. Okay. 

Mr. O’DAY.—associated with those costs—— 

Ms. HILL. Do you know how much the U.S. Government spends 

on that treatment for patients with HIV or AIDS? 

Mr. O’DAY. I—what I know is that the current plan for HHS and 

CDC has earmarked for the 2020 budget somewhere around $290 

million for the HIV elimination program. Now, the fact that Gilead 

will donate all of—— 

Ms. HILL. Well, hold up. Hold up. So what the U.S. Government 

pays in direct care—this is through Medicaid and Medicare—is 

$21.5 billion, so it is a much higher number than what we are adding to the budget for research and elimination. 

But, anyway, it is estimated that $470,000 in lifetime costs is 

what it takes to treat someone with HIV infection, and now we 

have 40,000 people with new HIV diagnoses in the country each 

year, and so that cost to our taxpayers is going to continue to rise. 

So, as you heard from the title of the article I submitted, Gilead 

is notorious for not even paying its fair share in taxes that go toward HIV treatment. Gilead reported its 2018 financial performance to the SEC on February 26. It showed that the company had 

revenue of about $22 billion—that number sounds familiar—in 

2018 with about $31 billion in cash available. So I want to take a 

look at how Gilead is using some of its profits. 

Mr. O’Day, you just joined Gilead Sciences earlier this year. Is 

that right? 

Mr. O’DAY. That’s correct. 

Ms. HILL. Your initial compensation package was reportedly worth about $30 million, including both cash and stock options. So 

the company agreed to pay you $30 million just for taking the job. 

Is that right? 

Mr. O’DAY. That’s correct. I mean, I should articulate that half 

of that was for compensation that I gave up from my previous assignment and have—— 

Ms. HILL. Okay. But it is $30 million for taking the job. So, just 

out of curiosity, do you know what the median income is for a U.S. 

worker according to the BLS? 

Mr. O’DAY. I do not offhand. 

Ms. HILL. It’s $46,800 or one-sixth of 1 percent of what your signing bonus was, just thought you would want to know that. 

And Gilead has a long history of paying windfall amounts to its 

corporate executives. In 2013 Gilead’s former CEO John Martin 

earned almost $180 million. His salary for the year was $15.4 million, but he cashed out almost $160 million in stock options that 

year. Mr. Martin appears to have timed his pay well. According to 

Gilead’s 2013 annual report to shareholders, Gilead had, quote, 

‘‘record total revenues’’ in 2013 of $11.2 billion. Twenty 13 was the 
43 

year that Gilead’s blockbuster drug Sovaldi received FDA approval, 

correct? 

Mr. O’DAY. I believe so. 

Ms. HILL. Sovaldi is a hep C drug that also made headlines for 

costing $1,000 per pill. 

I want to turn to another Gilead executive, your direct predecessor John Milligan. He made a little less than you, just $15 million. I understand Mr. Milligan resigned in 2018, but he didn’t lose 

his salary. In fact, he received what is called a golden parachute, 

meaning that the company paid him extra just for resigning. Mr. 

Milligan had previously received stock options that were not worth 

anything because the company’s stock had gone down, but thanks 

to a separation agreement between Mr. Milligan and the company, 

he was paid an additional severance that earned him a total of $26 

million just for resigning from the company. That is true, right, Mr. 

O’Day? 

Mr. O’DAY. As far as I understand. Those decisions are made by 

the board of directors. 

Ms. HILL. Of course. Gilead is a private company and it can pay 

its corporate executives whatever it likes, but Gilead also makes a 

lifesaving drug that it has kept a U.S. monopoly on. We have heard 

today about people who are not accessing this drug because they 

cannot afford it. We have heard about local public health officials 

that are straining under the financial burden of providing this drug 

to everyone else that needs it to stay healthy, and this drug, which 

has generated billions of dollars for Gilead, was developed using 

tens of millions of dollars of Federal funds. 

So what Gilead chooses to do with its profits really does matter 

to all of us. And I will say that the millions and millions of dollars 

to corporate executives I take some issue with. Thank you. 

Chairman CUMMINGS. Mr. Roy. 

Mr. ROY. Thank you, Mr. Chairman. 

You know, I came to this hearing hoping that we might have a 

hearing where we spent some time diving into some of the tough 

questions instead of preening and posturing for cameras, attacking 

people for making profit in a capitalist society, but that is what I 

just heard in rants for the last five minutes. 

Now, Mr. O’Day, do you make Brentuximab? Do you know what 

Brentuximab is? 

Mr. O’DAY. I do not. I’m sorry, Congressman. Brentuximab 

vedotin is the drug that I took when I was suffering from Hodgkin’s lymphoma, a drug that was created, built, manufactured, developed, designed, created by a private company that made a lot of 

money. And I am really glad they did. I hope they make a lot more, 

and I hope they make a lot more drugs to save a lot more people 

and distribute a lot more drugs around the world to save a lot more 

people. 

Now, it is a reasonable question when patents expire, when they 

should expire, when they shouldn’t expire. It is a reasonable question, how much money that NIH has and is investing and how 

much we should factor that into the patent life. But to sit here and 

attack the capitalistic system that produces and distributes medicine to saving lives around the world, I mean, it is just offensive. 
44 

I mean, I just cannot possibly understand why we are spending 

time sitting here while I listen to people lecturing companies about 

making money. I hope you make a lot of money. It is a reasonable 

question what patent length should be. I would like to have that 

conversation and dialog. I don’t know whether it should be one 

year, five years, 17 years. I don’t know. Let’s have that debate. I 

don’t know how much we should factor in that NIH puts in $400 

million, $50 million, I don’t know what it is, whatever the number 

is that has gone into the production of this drug. I don’t know how 

much went into merging these two putting them together and then 

you guys distribute it versus how much NIH has done. Fine. Let’s 

have this conversation. 

But this absurd attack on profit being evil is undermining the 

entire ability for us to have a rational conversation about the serious questions that are actually before us here. We don’t go down— 

how much cash on hand does Apple have? Two hundred and fortyfive billion dollars. How much has Apple done to go cure health? 

Is Apple in the business of providing direct health care, Mr. O’Day? 

Mr. O’DAY. Not to my knowledge, no. 

Mr. ROY. Right. Are you in that business? 

Mr. O’DAY. Yes, we are. 

Mr. ROY. Do you provide medicine or do you run hospitals? 

Mr. O’DAY. Our role is to bring breakthrough medicines to patients with devastating diseases. 

Mr. ROY. Right. Do you hire doctors to go out and provide care, 

or do you, for the most part, design, develop, and manufacture 

medicine? 

Mr. O’DAY. My colleagues and I at Gilead are exclusively focused 

on the design and development of medicines and getting them in 

the hands of patients. 

Mr. EZELL. And, if I may, Mr. O’Day, you employ 10,000 people 

at Gilead. There are some of the 1.2 million individuals in America’s—who are employed by America’s pharmaceutical companies 

who earn an average salary of $122,000. This is an industry that 

supports over 5.5 million workers across the U.S. economy considering direct and indirect effects, and it’s an industry that supports 

a high-value-added sector of the economy, high-value exports—— 

Mr. ROY. Yes, but whatever, profit is evil, right? Making money 

is apparently evil because never mind all those people you just 

talked about who are making money and able to pay for their jobs, 

their salaries, and be able to send their kids to school and be able 

to buy their houses in our system. This is somehow the wrong 

thing for us to do? 

I mean, again, can we have a roundtable discussion? I am happy 

to sit down with my colleagues on the other side of the aisle and 

this side of the aisle and let’s have two hours, three hours. Let’s 

get whiteboards up and let’s go through all of this stuff and come 

to a reasonable consensus on some of these tough questions about 

patents. It is a real concern. 

But can we dispense with the ridiculousness of hostility toward 

profit. It is a good thing that Apple makes a crap-ton of money 

making these things so that we can have them and distribute them 

and use them and use them for great additions and benefits to the 

world. And it is the same thing in medicine. 
45 

Chairman CUMMINGS. Before we go on to—Mr. Raskin, just a 

moment. 

Mr. Roy, I have been here—oh, he is gone. 

Mr. Roy, I have been here since quarter of 10. I have heard every 

syllable that has been stated here, and I am sorry you had to leave, 

but I think the committee on both sides have asked reasonable 

questions. And I am not beating up on anybody for profit. We are 

just trying to make sure we understand what the American tax dollars are paying for. We want to understand why the price is so 

high, and we are trying to understand how we can get the 90 percent of people who need this lifesaving medication, how we can get 

it to them. 

And, as a matter fact, I have applauded Gilead for their research 

and what they have been able to accomplish. Now, we are just trying to expand it. And Mr. O’Day has made it clear that they are 

trying to figure out how to expand treatment and the number of 

people also who will have access to this medication. So in fairness 

to the committee, I just wanted to make that clear to my colleague. 

Now, we will hear from Mr. Raskin. 

Mr. RASKIN. Mr. Chairman, thank you for that thoughtful comment. And I want to followup on Mr. Roy’s very interesting and 

provocative statement there because I think what we are trying to 

figure out is precisely what are the various public and private ingredients that go into our pharmaceutical system. My friend Mr. 

Roy doesn’t have to look across the aisle to find people who are 

upset with big pharma. President Trump himself has said that the 

pharmaceutical industry is getting away with murder. Pharma has 

a lot of lobbies, a lot of lobbyists, and a lot of power, and there is 

very little bidding on drugs. So I think that it is not just members 

of this side of the aisle that have noted some problems in the current system. 

But, Mr. O’Day, let me come to you because we know that the 

taxpayers, through the NIH, which is proudly in my district, in the 

Eighth congressional District in Maryland, put in $49 million, and 

the Gates Foundation put in tens of millions of dollars more into 

funding the development of Truvada as a method for preventing 

HIV. And I think a lot of the discussion here is about the fact that 

tens of billions of dollars have been earned by your company. But 

how much did Gilead spend on researching and developing 

Truvada as PrEP specifically as a prevention drug? 

Mr. O’DAY. Thank you, Congressman. So it’s hard to tease out 

some of the PrEP activities with the other activities because, at the 

end of the day, this medicine reduces the viral replication. It’s the 

same mechanism if you like for treatment as it is for PrEP. 

Mr. RASKIN. Okay. So how much did you guys put into that part 

of the process then? 

Mr. O’DAY. One point one billion over the course of Truvada’s development, which was really for all indications associated. 

Mr. RASKIN. Okay. And then the infusion of money that came 

from the taxpayers and the NIH was essential for the development, 

I think you would agree, of Truvada for the purpose of preventing 

HIV? 

Mr. O’DAY. Yes. The know-how and knowledge that Gilead put 

in, the investment from the NIH and the $50 million, the greater 
46 

than $80 million donation from the Gates Foundation, all of this 

was important to provide the body of evidence—— 

Mr. RASKIN. Terrific. Okay. So while we can’t imagine this is 

some kind of Ayn Rand fantasy where the private sector did it all 

on its own, right? Would you agree with me about that? 

Mr. O’DAY. I would agree, absolutely. 

Mr. RASKIN. Okay. But what has been the total revenue from 

Truvada as PrEP? 

Mr. O’DAY. The total revenue for Truvada as PrEP is difficult to 

kind of tease out. Again, we’ve talked about the number of $36 billion globally for the entire medicine, but it’s very hard because the 

medicine is prescribed by physicians—— 

Mr. RASKIN. Got you. 

Mr. O’DAY.—who often don’t know whether it’s PrEP or treatment. 

Mr. RASKIN. When you set the price for it for U.S. payers, did 

you take into account the role of taxpayer funding in the development of the drug? 

Mr. O’DAY. When we set the price for Truvada originally, we took 

into account a variety of things, including the impact upon the 

healthcare system, the ability to make sure we get access to—— 

Mr. RASKIN. All right. But you didn’t take into account the fact 

that the public was one of the investors in the research? 

Mr. O’DAY. Well, at the time we priced the medicine, the public 

had very little to do with the invention of this medicine. 

Mr. RASKIN. Okay. And you are choosing now to donate some 

drugs rather than reduce drug prices. Will you claim the donation 

as a tax deduction, as you testified that you did habitually? There 

is nothing wrong with it, but it will be claimed as a tax deduction 

presumably? 

Mr. O’DAY. I would—that’s been my understanding is that at a 

cost-of-goods level. 

Mr. RASKIN. Okay. But one of the shocking revelations from the 

Senate Finance Committee’s investigation into the pricing of your 

hepatitis C product was that the $1,000-a-day price you settled on 

was based on seemingly extraneous or arbitrary factors like the 

likelihood of a public outcry at a certain price point or the likelihood of receiving a letter from a Member of Congress or the likelihood of facing a congressional committee and a hearing like this. 

Did you use those same political factors in setting the price for 

Truvada? 

Mr. O’DAY. So, Congressman, again, I was not at the company 

at the time, but I’ve looked into those details. I think the overriding factors for the setting of the price for the HCV medicine 

were based upon both the cost of current treatment at the time and 

the innovation of bringing this together in a curative setting for 12 

weeks of therapy to cure the disease, a huge step up from what 

was done in the past. Those were the—those are the prevailing 

means that go into account when we priced—— 

Mr. RASKIN. Okay. And then finally, last question, just to follow 

through on the point Mr. Roy raised—and I am sorry he is not here 

for it—but do you think it is inappropriate in a constitutional democracy where the public invests in scientific and medical research 

and helps to produce pharmaceutical drugs that the public relies 
47 

on, for that factor to be taken into account in the pricing and distribution of pharmaceutical drugs? 

Mr. O’DAY. Well, I think it’s very important that you consider the 

access question. Will the medicine get to the patients that need it, 

including in the government sector and the government-funded 

healthcare sector, as well as the private sector. So absolutely I 

think you need to take a variety of things into account in pricing. 

Mr. RASKIN. Okay. Thank you. And I wish I could ask you about 

that access, maybe if we get another round, but I yield back to you, 

Mr. Chairman. 

Chairman CUMMINGS. Thank you very much. Ms. Miller? 

Mrs. MILLER. Thank you, Chairman Cummings and Ranking 

Member Jordan, and thank all of you all for being here today. 

In my home county of Cabell County, there has been an increase 

in HIV cases. In March there were 28 confirmed cases, and in April 

that number has risen to 44. This number is a sharp uptick from 

the case where we only had the eight cases annually over the last 

five years. 

Unfortunately, those most impacted are intravenous drug users, 

which is a terrible result of the opioid crisis that has devastated 

so many communities across the United States. I am very glad that 

President Trump is taking the issue of HIV seriously and has secured the donation of the 2.4 million from Truvada for the Centers 

of Disease Control, and thank you for doing that. 

Mr. O’Day, if a patient cannot afford Truvada, are there precautions in place to ensure access? 

Mr. O’DAY. Yes, absolutely. So we—if there are—if they have private insurance and they can’t afford their co-pay, they can apply 

to our co-pay assistance programs, and 98 percent of patients that 

have done that pay nothing out of pocket. And then if they’re uninsured or struggle with their medicine, we have a medicine assistance program, which essentially evaluates their financial needs 

and provides it for free. 

Mrs. MILLER. Thank you. Can you explain how the new version 

of tenofovir if that is how you pronounce it—— 

Mr. O’DAY. Tenofovir, right. 

Mrs. MILLER [continuing]. was—tenofovir was an improvement to 

patients, and what new benefits does it provide? 

Mr. O’DAY. Well, thank you, Congresswoman. So what you are 

referring to is actually a completely separate medicine from 

tenofovir. It’s a medicine that’s called—or abbreviated as TAF. And 

this is now to—you know, the advancement that we’ve seen in both 

treating and preventing HIV/AIDS is that people living with AIDS 

or people subject to AIDS have the ability to take these medicines 

now for decades. Tenofovir, when taken that long, a certain subset 

of patients have issues with their kidney or with bone disease on 

such a chronic basis because we’ve essentially transformed the disease to such a long-term illness. 

So the new medicine, so-called TAF, which will be combined 

again with FTC and other agents, has a much lower incidence of 

these side effects and is really designed for, if you like, the new 

generation of medicines that will allow patients to be on this 

longer-term without having to worry about other debilitating side 

effects that they could get from their medicines. We’ve launched 
48 

this now into the treatment of HIV setting with a medicine called 

Biktarvy, and we’ll be bringing this innovation—it’s right now filed 

with the FDA, and we will—hope to have a positive approval by 

the end of this year for patients that are eligible for PrEP. So this 

innovation, this new medicine that was completely discovered and 

developed by Gilead scientists, is now kind of the next evolution of 

care for HIV patients. 

Mrs. MILLER. How long did it take you to do that? 

Mr. O’DAY. Oh, my gosh, well, this was back in the 1990’s that 

we started this, so it’s been more than two decades and part of that 

$6 billion investment that we’ve had so far in HIV. 

Mrs. MILLER. Wonderful. Would any new patents prevent 

generics from being created against the original version? 

Mr. O’DAY. No, it’s a completely separate medicine. It has nothing to do with the patents of Truvada. It’s patent-protected from 

this new innovation that took decades to produce. 

Mrs. MILLER. Thank you. Mr. Ezell, do you foresee a future 

where the NIH could take on the entire of the drug development 

process from start to finish? 

Mr. EZELL. I simply do not think that would be the case. First, 

the capacities are not there. The NIH focuses on basic scientific research. What industries really bringing to the table is the development aspect of it, doing the applied research, conducting the clinical trials. 

Now, this has been proposed. Dean Baker, for instance, has written that, quote, ‘‘We could expand the public funding going to NIH 

or other public institutions to extend their charge beyond basic research to include developing and testing drugs and medical equipment.’’ But Baker estimates that, were we to try to do that, we 

would likely—quote, ‘‘It would be necessary to increase the amount 

going to NIH by at least $60 billion a year’’ in order to, quote, ‘‘replace the funding currently supported through patent monopolies. 

So no, I don’t think that’s tenable. I don’t think we’re going to increase NIH funding by $60 billion a year, especially if we can’t increase the—we pass a gas tax. 

And more beyond that point, I think there is very little reason 

to make that dramatic of a change to a system that, as I’ve tried 

to say today, is in fact the world’s most effective and productive at 

generating new-to-the-world cures. 

Mrs. MILLER. Thank you. 

Chairman CUMMINGS. Mr. Khanna. 

Mr. KHANNA. Thank you, Mr. Chairman, and thank you to Representative Alexandria Ocasio-Cortez for working to have this hearing. 

Mr. O’Day, I want to try to be constructive and not score political 

points or embarrass you but just get some facts and see if we can 

make some progress of your commitment. The New York Times 

wrote that Truvada was developed significantly by taxpayers. Is 

that a true statement? 

Mr. O’DAY. I think that’s really inadequate—inaccurate I should 

say. 

Mr. KHANNA. So you disagree with The New York Times editorial 

board? 

Mr. O’DAY. Yes. 
49 

Mr. KHANNA. And why is it not a true statement? 

Mr. O’DAY. Because the medicine was developed and discovered 

within Gilead. Some of my colleagues have mentioned that we licensed some initial compounds on this. That’s important. Those 

were very early stage ideas on the product. In the case of TDF, 

which is one of the components of Truvada, it was not a drug 

that—at the time, and it went through many iterations before it 

got there. 

Mr. KHANNA. Did you benefit at all from the study that was funded, $49 million by NIH and the Gates Foundation in terms of 

understanding the drug could be used for preventing HIV? 

Mr. O’DAY. Absolutely. Of the $1.1 billion we invested, I think 

that was an important contribution to supporting the HIV—— 

Mr. KHANNA. And did you—— 

Mr. O’DAY.—story at the time, and I’m grateful for Dr. 

Grant’s—— 

Mr. KHANNA. And—— 

Mr. O’DAY.—leadership. 

Mr. KHANNA [continuing]. grateful is good. Have you paid them 

anything? 

Mr. O’DAY. Well, I think there’s different ways to look at contribution to society. I mean, we have—— 

Mr. KHANNA. Right. I mean, I am sure they appreciate the compliments, but, you know, usually if I get something, I pay something for it. I am just curious. It is a simple answer, yes or—usually I don’t like yes or no questions, but this one is pretty yes or 

no. Did you pay them money or not? 

Mr. O’DAY. The donations that were provided by NIH and the 

Gates Foundation did not come with terms suggesting that—— 

Mr. KHANNA. No, I am not saying that they required it. I’m just 

asking—so you didn’t pay them anything for that? 

Mr. O’DAY. No, I think it’s in the interest of public health to advance a foundational medicine for additional—— 

Mr. KHANNA. And it absolutely is. The difference is 99.9 percent 

of us don’t get to profit when it is in the interest of public health. 

You know, you have acknowledged that this is something that you 

used to profit, and you haven’t paid them back. I mean, that is 

your decision. I just want to get the facts. 

One thing I want to get, are you—I appreciate that you are going 

to donate these 200,000 drugs. Can you assure us that you are not 

going to claim a tax write-off for those? 

Mr. O’DAY. You know, those will show up on our P&L balance 

sheet—— 

Mr. KHANNA. So you will claim a tax write-off. Can you assure 

us that you will only deduct the manufacturing cost—— 

Mr. O’DAY. Yes, I can assure you of that. 

Mr. KHANNA. So you are going to deduct $6. You are not going 

to deduct—— 

Mr. O’DAY. The $6 figure is not accurate. 

Mr. KHANNA. Okay. But you aren’t going to deduct the $2,000? 

You are going to deduct something closer to—— 

Mr. O’DAY. That’s correct. 

Mr. KHANNA [continuing]. $6? 

Mr. O’DAY. That’s correct. 
50 

Mr. KHANNA. So it is inaccurate that you would try to get a billion-dollar tax deduction? 

Mr. O’DAY. Absolutely not. 

Mr. KHANNA. Okay. So let me ask you this. One thing that I 

think you could commit to that would go a long way, there is some 

misunderstanding on the 200,000 that you have pledged to the 

President, and they are saying that that also includes people who 

are already on your financial aid programs. Can you commit that 

those 200,000 drugs are going to be in addition to the ones of people who are already part of your financial aid programs? 

Mr. O’DAY. Yes, absolutely. I mean, I think it’s important to 

note—— 

Mr. KHANNA. So you are making that commitment. So in addition to the people you have on financial aid, you are going to do 

200,000 new ones, and you are committing today that you are not 

going to deduct anything beyond the cost on your deductions? 

Mr. O’DAY. That’s correct. We’ll continue to serve patients 

through our medical assistance program. Today, we have 20 to 

30,000 a year. This is an additional 200,000, plus we continue to 

support all the co-pays. So back to, you know, do we give back, you 

know, to, you know, inventions that are supported in us? I mean, 

the answer is yes, in different forms—— 

Mr. KHANNA. Well, I am glad you have made a commitment because in The New York Times editorial, you know, they will be 

happy to know. I mean, there was legitimate concern about what 

tax deduction you are going to take. It seems you are not going to 

take that. You are going to do 200,000 in addition. Now, if you 

would just commit to paying back something to the CDC, I think 

it would go a long way. 

Any final thoughts? 

Mr. O’DAY. Well, I think, you know, we are collaborating with 

the CDC on the entirety of the program, so I think this is a partnership. It’s one where we provide resources, intellectual knowhow, medicine. The government provides funding to support—we’re 

all in this together to get to the HIV elimination, so I think there’s 

give-and-take on a variety of sides, Congressman. Thank you. 

Chairman CUMMINGS. Mr. Higgins. 

Mr. HIGGINS. Thank you, Mr. Chairman. Madam and gentlemen, 

thank you for being here today. Mr. Horn, has Gilead invested approximately $1.1 billion in developing Truvada? Is that an accurate number? 

Mr. HORN. I’m sorry? 

Mr. HIGGINS. Approximately did Gilead spend $1.1 billion developing Truvada? 

Mr. HORN. I can’t confirm or deny that. 

Mr. HIGGINS. Can you answer that, Mr. Ezell? 

Mr. EZELL. I would defer to Mr. O’Day, who’s from the company. 

I do not know myself how much—— 

Mr. HIGGINS. Okay. I was wondering if this was common knowledge. Mr. O’Day, can you clarify? 

Mr. O’DAY. I can—— 

Mr. HIGGINS. According to our research, it costs $1.1 billion—— 

Mr. O’DAY. Yes, I can—— 

Mr. HIGGINS [continuing]. to develop Truvada? 
51 

Mr. O’DAY. I can confirm that, yes. 

Mr. HIGGINS. And that drug has been quite successful at treating 

HIV and AIDS, correct? 

Mr. O’DAY. It’s been a cornerstone of HIV treatment, yes. 

Mr. HIGGINS. Thank you. The drug Descovy, are you currently investing a great deal of money perhaps on a similar level to develop 

Descovy? Is that at phase three right now? 

Mr. O’DAY. The phase three trials ran out. They represented at 

the AIDS meeting in March. It’s now been submitted to the FDA 

for the—— 

Mr. HIGGINS. How much money are you making on Descovy right 

now? 

Mr. O’DAY. I don’t have that number on the top of my head. I 

apologize, but I can get back to you. 

Mr. HIGGINS. Is it being sold? 

Mr. O’DAY. It is being sold for the treatment indication, but the 

prevention indication will be new later this year. 

Mr. HIGGINS. Very well. And that is because it is in phase three 

right now—— 

Mr. O’DAY. Yes, it finished phase three. 

Mr. HIGGINS. And GS–9131, is that an HIV/AIDS drug? 

Mr. O’DAY. I believe so. I’m still getting the numbers down. 

Mr. HIGGINS. It is in phase two. Is money being spent to develop 

that drug for HIV and AIDS? 

Mr. O’DAY. I’m just not familiar with this particular number, 

Congressman, so I apologize. But we have a variety of medicines 

in phase two right now. 

Mr. HIGGINS. According to my research, you have four—including 

Descovy, you have five HIV/AIDS drugs being developed, three in 

phase one, one in phase two—— 

Mr. O’DAY. Yes. 

Mr. HIGGINS [continuing]. one in phase three. 

Mr. O’DAY. Yes, that sounds right. 

Mr. HIGGINS. Is that reflective of—so the drugs that are in phase 

one, these three drugs that are in phase one and treat HIV and 

AIDS, is there money, tremendous amounts of money being invested in the development of those drugs? 

Mr. O’DAY. Well, we spent about $3.5 billion U.S. a year on R&D 

and around 40 percent of that goes into HIV/AIDS at this stage. 

So yes, there’s significant—— 

Mr. HIGGINS. And—— 

Mr. O’DAY.—investment in—— 

Mr. HIGGINS. And prior to these drugs that are in development 

right now being sold and marketed including levels that are being 

questioned by this oversight committee, I think appropriately so— 

we must protect the American people. We wouldn’t want to 

gouging, would we? And yet this clearly indicates—our research indicates that you are investing a tremendous amount of money right 

now into drugs being developed to treat HIV and AIDS, which are 

not being sold, so you are not making money on these drugs, you 

are spending money—— 

Mr. O’DAY. Yes. 

Mr. HIGGINS [continuing]. on these drugs? 
52 

Mr. O’DAY.—Congressman, and many of those will fail unfortunately. 

Mr. HIGGINS. Thank you. 

Mr. O’DAY. But it’s the nature of innovative research. 

Mr. HIGGINS. The ones that succeed and they go to market and 

they help Americans, perhaps millions of Americans, as Truvada 

has, is that the corporation’s only window to recoup and retain 

moneys to invest in further research and development? Is that 

not—— 

Mr. O’DAY. Yes. 

Mr. HIGGINS [continuing]. a logical formula to—— 

Mr. O’DAY. Absolutely. That’s basically our contract with society. 

We invest a tremendous amount in R&D at a high failure rate. 

Those that succeed we have a limited patent life to recoup the investment back into investing it and finding cures for devastating 

diseases. And then it becomes generic and broadly available to society. 

Mr. HIGGINS. In the interest of time—thank you for clarifying, 

but I have limited time. According to our research, besides the five 

HIV/AIDS drugs that are in development and which you referred 

to as in the pipeline, you have 28 other drugs that are in the pipeline at various phases of development. Of those 28 additional 

drugs, would it be fair to say that scores of millions of Americans 

could be helped with diseases that currently suffer? 

Mr. O’DAY. Well, we’re certainly hoping, yes. We’re working on 

some of the most devastating diseases—— 

Mr. HIGGINS. And when a drug is under development, is there 

any guarantee that it will become a profitable drug for the company? 

Mr. O’DAY. Quite the contrary. In phase one, 95 percent failure 

rates; phase two, 85 percent failure rates; phase three, 50 percent 

failure rates are the average. In fact, we just had a phase three 

trial for a devastating disease called NASH that failed. 

Mr. HIGGINS. Thank you for clarifying, sir. I think it is clear that 

this is a worthwhile hearing that should be reflected upon in a balanced measure. 

Thank you, Mr. Chairman. 

Chairman CUMMINGS. You mentioned African Americans not getting the medication at a far disproportionate rate. Did you mention 

that? 

Dr. WALENSKY. I did. 

Chairman CUMMINGS. Can you tell me about that? 

Dr. WALENSKY. Well—— 

Chairman CUMMINGS. Because I am listening to you, Mr. O’Day, 

and I am wondering—when I first got to Congress 20-some years 

ago, one of the first issues that we addressed with Maxine Waters 

was AIDS. And back then the treatment went to gay white males. 

The African-American community was pretty much left out. And so 

I am trying to figure out—when I heard those numbers, I am just 

trying to figure out who is going to cover the African-American 

communities and whether when you all make those decisions, you 

know, about distribution, where does that go? I mean, in other 

words, where do the drugs go and what role do you all play in making sure that there is some equitable distribution? 
53 

And I want you to understand I have heard a lot of talk here this 

morning about how people are beaten up—it is not about beating 

up. It is about being thankful that we have a medication that can 

do just about everything but finally cure it, AIDS, and wanting it 

to get to everybody that it can get to. I mean, it is as simple as 

that. 

So Ms.—Dr. Walensky. I am sorry. 

Dr. WALENSKY. Great. Yes, so a couple of comments on that. We 

know there are about 39,000 new HIV infections in the United 

States per year. This past—the most recent data that we have we 

know 80 percent of those new infections were on persons of color. 

We know that—— 

Chairman CUMMINGS. Eighty percent? 

Dr. WALENSKY. Eighty percent were in persons of color. We know 

that, of the new infections in 2017, 43 percent were in African 

Americans. African Americans make up 13 percent of this population. We know that African Americans suffered over 53 percent 

of the deaths of HIV and AIDS. And we know that PrEP is getting 

to largely gay white men, which it needs to get to, and about 75 

percent, but only about 10 percent of its consumers are people of 

color. 

Chairman CUMMINGS. Now, Mr. O’Day, what can we do about 

that? 

Mr. O’DAY. This is a dire need. We completely agree. And part 

of the program we’ve just agreed to with the CDC is focused on 48 

hotspot counties, seven rural states, you know, District of Columbia 

and San Juan, Puerto Rico. These are areas predominantly in the 

southern United States where the African-American incidence is— 

we’re not reaching and getting to. So we’ve had programs that are 

continually focused on supporting the communities, support services that are underway. Now—but we have much more we have to 

do to get to these communities. 

It’s make sure that the medicine is not the barrier in these communities, but beyond that, it’s making sure we provide the services 

to both address the issues relative to inequalities in the healthcare 

system, lack of education, stigma associated with the minority and 

African-American communities. We need to do more. We’re fully 

committed to rolling up our sleeves to be a part of that. 

In fact, I just received an email overnight from an incredible organization in Jackson, Mississippi, that supported 400 patients to 

get PrEP over the past six years. It’s a small start. There’s so much 

more to do. And when they started, they were the only organization 

in Mississippi that did this. And, fortunately, they have a system 

there where, once they identify patients—and they’re now using 

telemedicine to try to identify patients—built into their protocols 

are the ability to access the Gilead support services. And I’m 

pleased to say that they said, of the 400 patients, none of the 400 

had a financial problem with getting the medicine. 

But we need to do this in so many other communities, and that’s 

why we’re rolling up our sleeves and hoping—and not just hoping 

but committing to the CDC initiative and others to get to this community. 

Chairman CUMMINGS. Ms. Pressley. Ms. Pressley. 
54 

Ms. PRESSLEY. Thank you, Mr. Chairman, and thank you, Representative Ocasio-Cortez and all the advocates who made this 

hearing possible. 

And, Mr. Chairman, just picking up on some of your commentary 

and the comments of our colleague across the aisle who is very impassioned, and I have an equitable amount of outrage about the 

fact that people are dying. This is not about the vilifying of profit. 

This is about the vilifying of choosing profit over people. And if we 

know that a new person is infected every 15 minutes and we have 

been here two and a half hours, that is 10 more people who have 

been infected. 

And so we have an administration, the occupant of this White 

House, who sets an aspirational and achievable goal to end this 

epidemic, and yet we don’t have enough infectious disease doctors. 

We have a cost-prohibitive lifesaving drug, and it is not equitably 

being accessed. So that sounds like an unfunded mandate. And we 

have been here before. 

And this is the Oversight and Reform Committee, and so it is our 

job to hold everyone from—you know, I served on the city council 

before, but any time profit over people, whether it is developers or 

pharmaceutical companies are engaging in those practices, we are 

here to shine a light on that and to keep us all accountable. So that 

is the role of this committee. 

So, you know, we should be furious about what we have heard 

here today. This is the world’s wealthiest Nation. There are 40,000 

new HIV diagnoses each year. In my home state of Massachusetts, 

there have been over 140 new HIV cases since 2015, eight new 

cases in Boston over the last six months. 

Now, we have heard a lot of sobering and damning statistics 

here, but I don’t want us to get lost in the numbers and allow that 

to dominate the conversation because this is about people, our family members, our neighbors, our friends, our constituents like my 

constituent Matthew. He lives in Somerville. He is a gay man. And 

Matthew knows he is at higher risk of getting HIV, and for three 

years, he has been fortunate enough to be on PrEP. His insurance 

coverage gives him access to the drug at an affordable rate. However, he lives in constant fear that a job change will push it out 

of reach for him. 

There are millions of Matthews in our country for whom PrEP 

allows them to stand in their truth, safety, and unencumbered by 

the fear of contracting HIV, but unlike Matthew, there are millions 

more who need it and still cannot afford it. 

It has been 40 years since the first HIV case in the U.S., and this 

disease still remains a global public health challenge and, as reminded to all of us by our chair in your earlier commentary, particularly for women and queer people of color. 

It is my opinion that, Gilead, you have used your power to manipulate our patent systems, monopolized the marketplace to line 

your shareholders’ pockets, and I think that is shameful. 

Dr. Walensky, you have studied HIV transmission closely, and, 

as a physician at Mass General Hospital, you are on the frontlines 

of this epidemic. Since we are short on time, yes or no, do you 

agree that by failing to get PrEP in the hands of those most at risk, 
55 

including people who inject drugs, we undercut our ability to eradicate this disease? 

Dr. WALENSKY. Yes. 

Ms. PRESSLEY. Thank you. Can you speak to how substance 

abuse disorders specifically for those who inject drugs with needles, 

have heightened the need for greater access to PrEP? 

Dr. WALENSKY. Our hospital is full of injection drug users right 

now. We have double our consult volume in the last decade much 

due to injection drug use. And there’s been an outbreak in Lawrence and Lowell, as you know, in Massachusetts that was reported 

in the MMWR by the CDC. So yes—an HIV outbreak I should say. 

So yes, we need PrEP for all people at risk. 

Ms. PRESSLEY. Mr. O’Day, Gilead plans to donate millions of bottles of PrEP and bring a generic product to the market in the next 

few years. At face value, this seems like a good idea, although, you 

know, two years is two years too long. But the CDC estimates only 

a fraction of the 1.1 million people who need PrEP have access to 

it. The donation your company announced would reach even less 

people. 

Now, I recognize your company’s efforts to provide financial assistance for people without insurance who can’t afford it, but given 

the uptick in HIV infection, these efforts simply don’t keep pace. 

They don’t go far enough. Mr. O’Day, can you guarantee that the 

donated medications will go to people who do not already have access to the drug? 

Mr. O’DAY. Yes. 

Ms. PRESSLEY. Thank you. In Canada and Australia Truvada is 

sold for less than $10 a pill. It seems to me if your company wanted to, you can make the drug affordable for everyone. What has 

stopped your company from lowering the price to a comparable rate 

in the U.S.? 

Mr. O’DAY. The patent exclusivity ends, as you know, in September of next year, and we will, you know—the pricing between 

the countries is very different. It’s a very heterogenous systems between the United States and in other countries, and the pricing, as 

set in the United States, takes into account the innovation it 

brings, the cost of the health care of treating an HIV patient, the 

ability to invest back in research and development, and then also 

to make sure our access programs are effective and that patients 

in America do not go without receiving this lifesaving medicine. 

Ms. PRESSLEY. Well, it’s—— 

Dr. LORD. It’s greed. 

Ms. PRESSLEY. Yes. Okay. So I was going to say just, you know, 

respectfully, in that every 15 minutes a new person is infected, the 

more time we waste, the more lives that we are losing. And again, 

this is an aspirational and achievable goal, and so it is really infuriating. There are clearly many barriers people are facing in accessing this lifesaving medication, and price should not be one of them. 

Gilead could make PrEP more affordable in the U.S. and therefore 

more accessible if you want to, if there is the moral courage and 

the fortitude and the commitment to do so. Your failure to do so 

is indefensible. Your company brings in record-level profits while 

holding hostage a drug that could end this epidemic. There isn’t a 
56 

country in this world where this type of greed and conduct will be 

tolerated, so I am not sure why we tolerate it in this one. 

Thank you, Mr. Chairman, and I yield back. 

Chairman CUMMINGS. Thank you very much. Ms. Tlaib. 

Ms. TLAIB. Thank you, Mr. Chairman. And, Mr. Chairman, 

thank you so much for always supporting us, especially us new 

class of women that have come in to this U.S. Congress. It speaks 

volumes to your character. 

I also want to thank my sister from New York, Congresswoman 

Alexandria Ocasio-Cortez, and the incredible advocates that are behind her and making sure that we always speak truth to power. 

What is evil, Mr. Chairman? And I talked with you about this. 

What is evil is that people are dying a painful death all because 

of corporate greed. How much profit is enough, Mr. O’Day? When 

does it become immoral? And in my district I have the third-largest 

population of those infected in the state of Michigan. And as I 

think about you saying you are helping folks, I look at numbers because it is important. And when you say you are going to provide 

assistance, 200,000 people when 1.1 million people need your assistance, it is baffling. 

And I agree with Dr. Lord. I agree that Truvada belongs to all 

of us. And it is our responsibility in this chamber to make sure 

that we are putting people before profit. And it is really absurd 

that, as I hear my colleagues defending this practice over the 

American people that brought us here, it is disheartening because 

in the last five months, I don’t care which committee I go to, corporate greed is the issue always. It is always about the money and 

about profit. And as Mr. Chairman has constantly always said, 

there is no problem with that, but when does it become immoral? 

When does it become so unjust that we are seeing our neighbors 

die, die because drugs are just not accessible to them, drugs that 

we created, the Federal Government on behalf of the people? 

And so I just want to urge Mr. O’Day to please take Dr. Lord’s 

recommendations. This is your time to do what is right for the people and do what is right for our country. 

And with that, I want to yield to my sister from New York, who 

is, again, such a shed of light in this time of darkness in our country, that is constantly always putting people before profit, and that 

is Alexandria Ocasio-Cortez. 

Ms. OCASIO-CORTEZ. Thank you. That is incredibly too generous. 

Thank you. 

And I would like to thank my sister and colleague from Michigan 

because, you know, I see you go home every weekend and connecting with your community and really bringing yourself to hold 

that space and feel what your constituents feel. 

Mr. O’Day, I just want to clarify and let you know that this isn’t 

about you, and I am not here to vilify the work that you have done 

because you are responding to a set of incentives. And you could, 

you know, resign today, there would still be someone that would 

come up and occupy this seat, responding to those same incentives, 

making the same decisions that you make. So this isn’t about you 

as an individual or who you are or your character. This is about 

the system of incentives that we have set up. 
57 

And when it comes to who to blame for this, I don’t blame you. 

I blame us. I blame this body because every single developed country in the world guarantees health care as a right except us, except 

the United States because we can’t get it together, because we 

don’t have the fortitude to kick pharmaceutical lobbyists outside of 

our congressional offices. 

We have a leader here, Mr. Sarbanes, who has led in the role of 

money and politics. We can’t even reform our own political system 

to make sure that we are more responsive to the people and the 

electorate that we seek to lead and whose votes we ask for. 

And so this isn’t your fault. This is our fault because for some 

reason, for some reason the conclusion that every single other 

Western or rather developed country in the world has come to, we 

haven’t been able to come to. In Australia, PrEP is $8 a month. In 

the United States, it is almost $2,000 a month because we have 

legislated a set of incentives, and we have legislated a system that 

allows that to happen. 

Out of every 10 people that need PrEP, nine of them cannot access it, and that is largely due to the price. We heard earlier today 

an impassioned plea about profits and about how a corporation like 

Apple should be able to enjoy that. Well, I know a woman, her 

name is Amy Vilela and her daughter died because she went to a 

hospital and told them that she wasn’t insured and they said come 

again in a month when you do have insurance. Well, her blood clot 

didn’t wait a month. Her daughter died at 22 years old. And the 

rub of it was that her daughter, I believe, might have actually been 

ensured and just didn’t know it because she was in between jobs. 

And so what Amy says, what Ms. Vilela says is this is a commodity. Her daughter’s life was not. People’s lives are not commodities. When we talk about economics, there is something known as 

a demand curve with elasticity. And with every other commodity, 

you can say how much is this phone worth to you and you can say 

$100, $200. You can buy a Nokia phone. You cannot have a phone 

at all, but you cannot ask the question how much will you pay to 

be alive? How much will you pay to live? Because the answer is everything. The answer is you will pay $10, you will pay $1,000, you 

will go into debt, you will do anything to live. And that is what 

makes the price of medicine different than the price of an iPhone. 

Thank you very much. 

Chairman CUMMINGS. The gentlelady’s time is expired. 

Mr. SARBANES. 

Mr. SARBANES. Thank you, Mr. Chairman. I am tempted to just 

say amen and stop talking, but I do have a couple of questions I 

would like to—— 

Chairman CUMMINGS. Me, too. 

Mr. SARBANES. Yes, I would like to get on the record. Mr. O’Day, 

this new drug that is going through the process, Descovy, is that 

how you say it? 

Mr. O’DAY. That’s correct, Congressman. 

Mr. SARBANES. Yes, that is based on this component that has 

TAF as opposed to TDF. 

Mr. O’DAY. Correct. 

Mr. SARBANES. Is that something you are going to pursue exclusivity on in terms of the patent around that? What is—— 
58 

Mr. O’DAY. It’s a brand-new medicine. 

Mr. SARBANES. Yes, brand-new—— 

Mr. O’DAY. It has a patent life, as granted to it under the patent 

statutes. 

Mr. SARBANES. I know there are some questions being raised out 

there. I think it has found its way into litigation as to whether 

Gilead knew back when it was developing TDF that the TAF opportunity might be a safer one. And I am curious as to whether you 

were aware of the safety benefits associated with TAF at the time 

when TDF was being developed. 

Mr. O’DAY. Absolutely not. I mean, TAF was still in the very 

early stages. 

Mr. SARBANES. Okay. 

Mr. O’DAY. We pursued the development of that for treatment 

and for prevention in line with the natural course of development. 

Mr. SARBANES. Dr. Lord, did you want to say something? 

Dr. LORD. We know that Gilead in 2011, the ex-CEO actually 

said that they stopped the development of the safer TAF drug because they knew—they knew it was not as safe, and when they 

were trying to launch Truvada versus another drug Epzicom at the 

time—and this is a quote, they said ‘‘and to have our own studies 

suggesting that Viread’’—which is part of Truvada—‘‘wasn’t the 

safest thing on the market, which it certainly was at the time, it 

didn’t seem like the best.’’ So we have evidence from their CEO 

that they purposely delayed—— 

Mr. SARBANES. Well, that—— 

Dr. LORD [continuing]. development of the safer drug. 

Mr. SARBANES. I appreciate that. And it is obviously going to 

play itself out. I mean, we will—— 

Dr. LORD. See you in court. 

Mr. SARBANES [continuing]. the courts will decide, I guess, 

whether these allegations are well-founded or not. But it is interesting that the effect of this is that with the new Descovy TAFbased drug that is coming, you are going to get another period of 

exclusivity. So am I right that essentially what is being achieved 

there is that by first pursuing the TDF-based Truvada with apparently the safety risk and now pursuing the safer TAF-based drug 

of Descovy, basically Gilead is going to reap the benefit of two periods of exclusivity rather than one, correct? I mean, that is just factual. 

Mr. O’DAY. Well, these are two completely different medicines. 

Mr. SARBANES. Right, but—— 

Mr. O’DAY. This is a step—— 

Mr. SARBANES. I got you—— 

Mr. O’DAY. This is a step change in innovation—— 

Mr. SARBANES. That is going to be subject to debate and whatever, but you are going to get a period of exclusivity, which you are 

still in for the TDF-based Truvada, and then you are going to get 

another period if this all works out for you of exclusivity for the 

TAF-based Descovy. That is how it looks to me. 

I have got to move on real quick to one other series of questions 

I wanted to ask you. I understand that Teva Pharmaceutical got 

FDA approval for a generic equivalent for its Truvada back in June 

2017. And so it raises the question if that generic drug was ap-
59 

proved in 1917, why did it not enter the market in 1917? And apparently, the answer is that three years previously in 1914 Gilead 

had entered into a settlement agreement with Teva under the 

terms of which Teva agreed not to challenge Gilead’s patents in 

court. And so in exchange, Gilead allowed Teva to come to the market in 2020, which is a year earlier. 

So you made this deal with them that basically said we will let 

you come in a year earlier if you, I gather, don’t sue us on the patent. And maybe you saw some weakness there, and this was a good 

deal to make, but is that true that there is some agreement that 

was made there with Teva where they are going to be able to come 

in a year earlier in return for something that was done? Is that 

true? 

Mr. O’DAY. So this is a fairly normal process of generics coming 

in, challenging patents—— 

Mr. SARBANES. Yes. 

Mr. O’DAY.—and then a determination is eventually made on the 

cost of litigation, the potential litigation. We believe strongly in the 

Truvada patents. At the end of the day—— 

Mr. SARBANES. It is pretty typical. You are right about that. And 

you have done it in I think nine other instances, the effect of 

which—there are all these ways to extend your patent control. One 

is pay for delay. This is a little bit different. This is making a deal 

basically so people won’t challenge the patent, which to me signals 

maybe some concerns about the weakness of the patent, but you 

have figured out a way to push that off. So it just makes me concerned about how you are conducting the business because the bottom line is these generics don’t get to the market as quickly as they 

could. And I understand from Dr. Walensky that the benefits of 

that in terms of the pricing may not be as much as we fantasize 

about. But nevertheless, it is important that the generics be able 

to get to market quickly or as quickly as they can. And we are seeing some maneuvers on your part I believe that keeps that from 

happening. 

With that, I would yield back my time, Mr. Chairman. 

Chairman CUMMINGS. Ms. Speier. 

Ms. SPEIER. Thank you, Mr. Chairman. Thank you all for being 

here. 

At the outset, it is important for me to disclose that Gilead is a 

company in my district with 9,000 employees around the world, 

many of them in my district. 

Having said that, Mr. O’Day, I am glad that you are here. I am 

glad that you have participated in the manner that you have. I 

think you do have a responsibility to your shareholders. I also 

think you have a responsibility to our country. And you are doing 

what you are doing in large part—and I agree with Ms. Ocasio-Cortez—because the system allows you to do it. And we have got to 

take responsibility for the fact that when Medicare part D was created, we tied our hands behind our backs and did not allow Congress or the government to negotiate prescription drug discounts. 

Now, I am deeply concerned about the 1.1 million people that Dr. 

Walensky talked about who warrant PrEP right now. They are 

those most susceptible to potentially getting HIV. But only 150,000 

of those 1.1 million people actually do, and of those, they are 75 
60 

percent white. So the people that desperately need this drug are 

African-American gay men. One in two black gay men will be diagnosed with HIV in their lifetime. 

So knowing all this, I want to know—and here I am negotiating 

with you in public over something frankly the government should 

have been doing a long time ago. Are you willing to provide P.R. 

ads—you put lots of ads on TV, I see them all the time for your 

drugs. Will you put ads on TV that are targeted at the AfricanAmerican gay men who should be getting this drug and who are 

not and make them also aware of the fact that you are making 

available this drug for free to those who need it? 

Mr. O’DAY. Thank you, Congresswoman. Just to clarify, the numbers that we have are around 200,000 people are on—of the 1.1 

million are on the Truvada today. There’s clearly a huge unmet 

medical need to your point, and again, the CDC’s own studies suggest that, with the Gilead support programs, there’s only 1 percent 

that aren’t on it for financial means. 

We are firmly committed to working in a number of ways to outreach—— 

Ms. SPEIER. Okay. Mr. O’Day, I don’t have a lot of time. 

Mr. O’DAY. Right. 

Ms. SPEIER. Will you commit to developing a P.R. campaign for 

TV to target the African-American population that is most susceptible to getting HIV and making them aware that the drug is available and it will be made available to them for free? 

Mr. O’DAY. We do do television advertising today for this community. We do digital advertising. We commit to—— 

Ms. SPEIER. That is not working. 

Mr. O’DAY. We commit to a variety of programs that are getting 

at this community today. And it is increasing, but there is much, 

much more to do, which is why the CDC initiative, which it is their 

numbers that suggest that 200,000 people are uninsured of those 

1.1 million, and we are providing the total amount to make sure 

that we get that to patients, and we’ll continue to work—— 

Ms. SPEIER. But if people don’t know about it, it doesn’t matter 

that you are making 200,000 doses or enough for 200,000 people. 

If they don’t know about it, they are not going to access it. So—— 

Mr. O’DAY. Right. 

Ms. SPEIER [continuing]. I feel that you have a moral obligation 

to inform that population. We have to save these lives. We do know 

that HIV is increasing because young gays, particularly in my district, are feeling immortal now, and since this disease is becoming 

chronic, that they can engage in unprotected sex, and so HIV is on 

the increase. So, as the biggest provider of the drug that protects 

these individuals, I believe you have to do more, and I am asking 

you to do more. 

Mr. O’DAY. Yes, and we will continue to do more. We spend more 

than $100 million over a 10-year period on a compass program that 

specifically targets the southern states in the United States that focuses on education, that focuses on access to health care, and we’ll 

continue to roll up our sleeves and work with the community and 

work with other organizations to be able to increase this presence. 

Absolutely we commit to that. 
61 

Dr. LORD. It’s obviously not working, though, and this donation 

really is not anything meaningfully different than their medication 

access program, which they already have, which, as you say, is not 

working. It’s only reaching, as Mr. O’Day said, 20,000 people—— 

Ms. SPEIER. Okay. So, Dr. Lord, what would you recommend? 

Dr. LORD. I would recommend that they lower the price—that 

they lower the price so that Mr. Horn’s organizations can get drugs 

to the people that need them. Instead of spending $2.6 billion, 

which is the domestic spend on Truvada, I say we spend that 

money to develop programs for Mr. Horn’s agencies to get drugs to 

these people that need it. They don’t just need a free drug. They 

need programs, and we’re not going to do that with a donation. 

We’re going to do that when we spend serious money, instead of 

sending it to Gilead, to giving it to the states, to the counties and 

municipalities that need it. 

Mr. O’DAY. And Gilead is spending hundreds of millions of dollars on these programs. 

Dr. LORD. We’re spending $2.6 billion, so, yes, you give us a few 

hundred million back, but we’re giving you the vast majority of 

that to begin with. 

Ms. SPEIER. All right. My time is expired, but, Mr. O’Day, I hope 

that you will take my request seriously and come back to us with 

a campaign that will engage the whole community that is not 

aware that your program exists. I yield back. 

Chairman CUMMINGS. We want to be effective and efficient. Is 

there any agency that can identify who these people are that need 

this treatment, Dr. Walensky? In other words, can we pinpoint 

them, I mean, who they are? Do you follow me? 

Dr. WALENSKY. Yes, I do. 

Chairman CUMMINGS. And that way you can go straight to them. 

Dr. WALENSKY. Yes, thank you for that question. I want to go 

back to a number that keeps getting cited that is 98 percent of people get access and 1 percent of people don’t have—don’t—cite cost 

as the issue. Less than 1 percent of people don’t cite cost as the 

issue. That was a study that was funded by the CDC, it was conducted by the CDC. It was a household survey. So we know that— 

so we know that adults who are surveyed in the household don’t 

think that they have a problem accessing PrEP. Well, I can tell you 

what, those are not the people who actually need access to PrEP. 

We know that of our youth that are—that about 10 percent of 

our youth are gay. We know that of our homeless youth, 40 percent 

of them are gay. And you know what, they’re not filling out household surveys. So I think part of the challenge with access to PrEP 

is that these folks are not easily coming forward. 

When we talk about gay black men, they don’t have a good reason to come forward. And I can promise you that teenagers and 20- 

year-old gay men are not accessing health care. They just don’t 

come to the doctor. So—— 

Chairman CUMMINGS. And how can we reach them? How do 

you—— 

Dr. WALENSKY. I think we needed to decrease stigma. I think we 

need to have advertising. I think we need to open our doors to 

these people so that they will come, welcomed and loved, and access these drugs and come quarterly. So I know the other statistics 
62 

that’s been thrown out is 200,000 people are currently on PrEP. 

Two hundred thousand people have ever been on PrEP. We learned 

at the HIV meetings in March 34 percent of people don’t take it 

for longer than a year. 

Chairman CUMMINGS. And, Mr. Horn? 

Mr. HORN. Thank you. So we’ve been really discussing cost as a 

considerable factor here, and cost does remain, you know, a key 

issue here. But I think when we sort of open it up a little bit, we 

really have to talk about really sort of financing sustainable 

healthcare systems, you know, for the individuals that we’re trying 

to reach here. 

And I just do want to circle back on one thing here. I think that, 

you know—I think the—you know, the hearings, it’s sort of just 

centers around acrimony around like, you know, that—we’re 

against profit, that Gilead is the enemy. Neither is true. Neither 

is true in that. And I am surrounded by activists, by clinicians, by 

academics, by policymakers who have all fought tooth and nail 

with health insurance companies, with Medicaid to make sure that 

Truvada was covered. 

However, what that comes back to is the issue of cost. And even 

with the co-pay assistance program, again, that has been—that has 

really been elementary in just ensuring access there, but it really 

does come down to an issue of cost as to why those programs are 

even necessary in the first place. 

So we’re all in this together. We’re all looking for solutions here. 

We’re just not—we don’t have one good guy, we don’t have one 

enemy. We really have to think about our entire system and how 

costs manifest across that entire system and what are we going to 

do about that going forward? Thank you. 

Chairman CUMMINGS. Mr. O’Day, do you all—your board—I 

know it may be out of the ordinary, but does your board ever hear 

from people like Dr. Walensky and Mr. Horn? 

Mr. O’DAY. Well, as you know, I just joined a couple of months 

ago—— 

Chairman CUMMINGS. Right. 

Mr. O’DAY.—so I don’t know the past practices of the board, 

but—— 

Chairman CUMMINGS. No, I was just wondering. 

Mr. O’DAY. But I think the voice of the patient and voice of the 

community is represented in the company in very, very meaningful 

and serious ways. There’s many, many community leaders that 

have joined Gilead, many HIV top physicians that are now part of 

Gilead. It is a part of the fabric of Gilead in my—if you’ll allow 

me—in my two and a half months, Mr. Chairman, that you feel 

very connected with all aspects of the continuum of care here. And 

people take it very seriously. I mean, our role is to develop the next 

transformational medicine, but it’s also to work as a member of 

this community in a very responsible way, and we take that seriously. 

Chairman CUMMINGS. Finally, where are the negotiations with 

the CDC? Where are they right now? I mean, you did the 200,000. 

Is that ongoing? Do you follow me? 

Mr. O’DAY. Well, yes, I mean, the details of the program, how to 

implement it, those are all now ongoing. The commitment is clear. 
63 

And, as you said before, I mean, I think we would respond to other 

requests for the commitment. But now we’re working through the 

details and trying to get it implemented as quickly as we can. 

Chairman CUMMINGS. Mr. Jordan? 

Mr. JORDAN. I would just thank our panel and again thank 

Gilead for the amazing drug they developed and the difference it 

has made for, as I said earlier, millions of people around the world. 

Chairman CUMMINGS. Without objection, letters the committee 

has received about this issue are entered into the hearing record 

from a number of organizations, including the Treatment Action 

Group, the AIDS Vaccine Advocacy Coalition, and the HIV Medicine Association. All of these groups have written to express their 

concerns about the impact that the high price of Truvada is having 

on their members, their communities, and the American healthcare 

system. 

Chairman CUMMINGS. I would also like to thank our witnesses 

for testifying today. 

And without objection, all members will have five legislative days 

within which to submit additional written questions for the witnesses, and they should be submitted to the chair, which will be 

forwarded to the witnesses for their response. I ask our witnesses 

to please respond as promptly as you possibly can when you receive 

those written questions. 

With that, the hearing is adjourned. 

[Whereupon, at 1:30 p.m., the committee was adjourned.] 

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