A U.S. appeals court just handed Gilead Sciences a victory against alternative funding programs that were importing the company's medications from overseas. The programs wanted to buy drugs cheaper abroad and bring them back. The court said no. Gilead can now keep charging whatever the f*ck they want domestically without worrying about overseas arbitrage cutting into margins.
Alternative funding programs are exactly what they sound like. Insurance won't cover your meds, so you pay some middleman to import them from Canada or wherever pills cost less than a mortgage payment. It's the pharmaceutical equivalent of buying your textbooks from Amazon UK instead of the campus bookstore. Except now a federal court says you can't do that anymore because it hurts Gilead's feelings.
Gilead makes antiviral medications. Expensive ones. The kind where you see the price tag and immediately check if your kidneys are worth more on the black market. These alternative funding outfits were cutting into that business model by recognizing that drugs cost different amounts in different countries and maybe sick people shouldn't have to choose between treatment and bankruptcy.
The court disagreed. Intellectual property must be protected. Importation violates licensing agreements. Corporate revenues matter more than some idiot thinking geography shouldn't determine whether they live or die.
Retail traders saw the news and immediately started Googling "how to buy Gilead calls." They think this is bullish. They believe a court ruling that lets a company maintain artificially high prices in one market while selling cheaper elsewhere is a sign of strong fundamentals. They'll buy at the top, watch it trade sideways for six months, then sell at a loss and blame Jerome Powell.
Gilead stock will do whatever it was going to do anyway because this ruling changes nothing about the company's actual business except now they have legal permission to keep doing what they were already doing. The AFP health programs lose. Patients pay more. Gilead's legal team bills another few million.
But at least someone protected the sanctity of charging Americans triple what everyone else pays.
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