Company aims to head off competition and grab a slice of royalties

Gilead has granted licenses to seven generic drugmakers to produce its blockbuster hepatitis C drug Sovaldi (sofosbuvir) in India and 90 other developing nations. The company will give each licensee a full technology transfer, in exchange for 7% royalties on all sales.

The move counters several problems Gilead could otherwise face in India. Firstly, there is doubt over whether India would grant a patent for sofosbuvir, since the drug is already approved in the US and EU, and India has a history of refusing patents for molecules ‘already in the public domain’. Lack of patent protection would leave Sovaldi open to generic competition. By granting licenses, Gilead at least gets a share of sales.

At the same time, it goes some way towards appeasing activist groups, which have criticised the company for the high prices it has set for Sovaldi. Generic manufacturers will be allowed to set their own prices, which could bring the treatment within the budgets of many more patients.