“As Gilead Sciences pursues cure of all diseases, I wouldn’t mind sales decline.”
So said CEO Lee Seung-woo when asked how Gilead Sciences Korea would deal with falling global revenues of Gilead Sciences.
The pharmaceutical firm’s revenue has been on a steady decline due to sliding sales of Sovaldi and Harvoni, the hepatitis C treatments that had led Gilead’s revenue growth for years. The sales decline resulted from a sharp drop in the number of hepatitis C patients with more patients cured in a tight competition against rival products.
Viread, a hepatitis B treatment that generates annual sales of 100 billion won ($93 million), is also facing challenges from generic copies. Gilead is also under severe competition in the HIV (Human Immunodeficiency Virus) market against rivals such as GlaxoSmithKline.
The rapid decline in global sales of Gilead put a strain on its Korean unit, which has been performing well since its establishment in 2011.
Regardless of the sales, Gilead Sciences Korea will keep seeking ways to cure diseases, Lee said.
Korea Biomedical Review met Lee to learn what made him so confident.
Lee served as president of AstraZeneca Korea, managing director of MSD Korea, and the first president of the Korea Research-based Pharma Industry Association. He has been leading Gilead Sciences Korea as general manager since the company’s establishment in 2011.
|Lee Seung-woo, general manager of Gilead Sciences Korea, speaks during an interview with Korea Biomedical Review.|
Question: What were the achievements of Gilead Sciences Korea last year?
Answer: Our revenue was 270 billion won in 2016, and we performed similarly last year. But it is meaningful that we have contributed to the cure of hepatitis C with our products such as Sovaldi. We released insurance-covered HIV treatments Genvoya and Descovy. It was a year with more expectations for future.
Q: Why is your company switching HIV treatments from TDF (tenofovir disoproxil fumarate) to TAF (tenofovir alafenamide)?
A: In the second half of last year, 85 percent of HIV patients who have been taking Stribild (cobicistat silicon dioxide, elvitegravir, emtricitabine, TDF) switched to Genvoya (cobicistat silicon dioxide, elvitegravir, emtricitabine, TAF).
Switching from Stribild to Genvoya is increasingly seen not only in Korea but other countries as well because drug tolerance and safety have become more important for HIV patients who have to take medicine in the long term. In the past, HIV treatments used to focus on viral suppression and tolerance treatment.
In Korea, however, the health authorities seem to have a conservative approach in deciding the reimbursement rate for HIV drugs because the nation had an issue with antiviral resistance in the past.
Thus, the regulator demands us to submit more data regarding the switching from Viread (TDF) to Vemlidy (TAF). Our company fully understands this and is preparing to offer related data.
Q: The sales of Sovaldi and Harvoni, which had led the recent growth, are falling. What measures do you have to stop this?
A: Taking the first step in the Korean market several years ago, I discussed with employees what kind of company Gilead Sciences Korea should be. We had concluded that our company should be a scientific, ethical, and patient-oriented company, apart from sales ranking.
We also pledged to be a leader in the market for hepatitis B, hepatitis C, HIV, and antifungal drugs. Indeed, as a leader in the hepatitis C market, we have developed innovative new drugs, which have cured over one million patients.
It is natural that the sales fell. If the number of cured patients goes up, the number of drug-taking patients goes down. For the first two to three years, sales rise because patients who have waited for the treatment often use it early. After then, we face a time to uncover and treat patients. Just as shown in other countries, Korea is now in such a situation.
What Gilead Sciences Korea is trying to do is to increase patients’ accessibility to treatment. Expanding the insurance coverage in drugs is also part of our goal. The health authorities allowed limited insurance coverage on Harvoni. But we will put more effort to expand the coverage so that we can supply the drug for more patients.
The World Health Organization (WHO) aims to eradicate hepatitis C by 2030. In line with this, our company will make every effort to eliminate hepatitis C in Korea by 2030. We can achieve these goals because of innovative new drugs such as Sovaldi and Harvoni.
Q: Don’t you think the number of employees at Gilead Sciences Korea is too small to remain at 65, compared to the size of the revenue?
A: Unlike other companies, we don’t reduce workforce even when the revenue declines. If our production or sales are in shortage of workforce, we make use of partnerships with other companies such as Yuhan Corp. The current organization is not minimal but optimal. As the company’s operation is centered on the key personnel, employees are not affected by fluctuations in sales, and they can work along with the company’s mission and vision.
Q: Last year, Gilead Sciences acquired Kite Pharma and got approval for CAR-T therapy Yescart in the U.S. The company also took over Cell Design Labs, a cell therapy company, in the same year. Do you have plans to bring these therapies to Korea?
A: Cell therapy products leading to customized treatments go through extremely complex procedures from manufacturing to administration. Related regulations are not yet complete. However, there is a high expectation that the cell therapy will be a therapeutic alternative that can give hope for a cure in more areas. It’s quite difficult to comment on specific plans.
Q: Do you have any suggestion for policymakers about the Korean drug pricing system?
A: I hope that the regulators could recognize the value of new drugs. To help innovative medicines to come out on the market, we need a proper drug pricing system. Developing a novel drug requires a massive amount of capital and risks.
Multinational pharmaceutical firms carry out many clinical trials in Korea. Fifty percent of R&D costs is spent on clinical trials. Gilead is also conducting 18 experiments in Korea out of more than 400 studies globally. Such studies will help Korea enhance its research power and create added values.
In Korea, local drugmakers have not been very enthusiastic about developing novel drugs because new drug prices were set low and generic drugs, relatively high. As drug suppliers concentrated on generics business, they had rebate issues.
Now, the Korean drug industry’s level has risen to an international level, the drug pricing system should be improved to recognize the value of innovative drugs.
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