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<h4>Resolution Details</h4>
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<strong>Company:</strong>
<p>Gilead Sciences, Inc.</p>
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<strong>Year:</strong>
<p>2026 </p>
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<strong>Issue Area:</strong>
<p>Corporate Governance </p>
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<strong>Focus Area:</strong>
<p>Independent Board Chairs </p>
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<strong>Status:</strong>
<p>Filed</p>
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<h2>Resolution Text</h2>
<p><strong>RESOLVED</strong>: Shareholders request that the Board of Directors adopt an enduring policy, and amend the governing documents as necessary in order that 2 separate people hold the office of the Chairman and the office of the CEO as soon as possible.</p>
<p><strong>SUPPORTING STATEMENT</strong>:</p>
<p dir=”ltr”>The Chairman of the Board shall be an Independent Director. A Lead Director shall not be a substitute for an independent Board Chairman.<br>&nbsp;<br>The Board shall have the discretion to select an interim Chairman of the Board, who is not an Independent Director, to serve while the Board is required to seek an Independent Chairman of the Board on an accelerated basis. This policy could be phased in when there is a contract renewal for our current CEO or for the next CEO transition although it is better to adopt it now.</p>
<p dir=”ltr”>An independent Board Chairman&nbsp;at all times improves corporate governance by bringing impartiality, objective oversight, and external expertise to board decisions, mitigating conflicts of interest, enhancing transparency, and boosting shareholder confidence.&nbsp;</p>
<p dir=”ltr”>This detached perspective allows the chairman to focus on&nbsp;shareholder interests,&nbsp;strengthen management accountability, and provide critical checks and balances, ultimately contributing to long-term sustainability and credibility.&nbsp;</p>
<p dir=”ltr”>Now could be a ripe time for a change since Gilead stock was at $123 in 2015 and only at $120 late in 2025 despite a robust stock market.</p>
<p dir=”ltr”>Gilead settled a civil fraud lawsuit for $202 million with the U.S. Attorney’s Office and 49 state attorneys generals. Gilead was charged with running an illegal kickback scheme by providing lavish meals, free travel, and speaker fees to doctors to encourage them to prescribe Gilead’s HIV drugs. &nbsp;<br><br>Lawsuits continue over older Gilead HIV drugs containing tenofovir disoproxil fumarate, such as Truvada. Gilead is charged with intentionally withholding a safer alternative to maximize profits and failed to warn patients of the risk of kidney and bone damage. There are thousands of pending state-level cases.<br><br>A settlement between Gilead and the U.S. Department of Health and Human Services was criticized for potentially undermining the public-private partnership model for pharmaceutical innovation. Critics argued that the terms, which allow Gilead to use patents developed by the Centers for Disease Control and Prevention for HIV prevention, were too favorable to Gilead and could harm public health.&nbsp;<br><br>The U.S. Food and Drug Administration placed a clinical hold on trials for two investigational HIV treatments, GS-1720 and GS-4182. There was a decrease in a type of white blood cell in some trial participants.<br><br>Gilead’s efforts to expand its oncology portfolio faced setbacks with the failure of two late-stage clinical trials for its cancer drug Trodelvy. A trial for metastatic urothelial cancer failed, along with another study for previously treated metastatic non-small cell lung cancer.<br><br>Gilead Q2 2025 earnings indicated disappointing sales. The Cell Therapy franchise (Yescarta and Tecartus) and the liver disease portfolio both experienced sales decreases due to competitive pressures.&nbsp;<br><br>Per an October 2025 MarketBeat&nbsp;report recent insider Gilead stock sales could be a point of concern for investors, potentially signaling a lack of confidence in Gilead’s short-term performance.&nbsp;</p>

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<h3>Lead Filer</h3>
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<div class=”views-field views-field-nothing”><span class=”field-content”> John Chevedden</span></div><div class=”views-field views-field-title views-field-field-shareholder”><span class=”field-content”>Chevedden Corporate Governance</span></div>
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<h4>Resolution Details</h4>
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<strong>Company:</strong>
<p>Gilead Sciences, Inc.</p>
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<strong>Year:</strong>
<p>2026 </p>
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<strong>Issue Area:</strong>
<p>Health </p>
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<strong>Focus Area:</strong>
<p>Access &amp; Affordability, Human Rights </p>
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<strong>Status:</strong>
<p>Filed</p>
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<h2>Resolution Text</h2>
<p>RESOLVED, that shareholders of Gilead Sciences Inc. (“Gilead” or the “Company”) urge the board of directors to adopt a comprehensive human rights policy covering Gilead’s operations, and supply chain, that commits Gilead to respecting internationally recognized human rights, including the right to health, and to conducting human rights due diligence (“HRDD”) to address the most salient adverse human rights impacts caused by Gilead’s or a supplier’s activities.</p>
<p>SUPPORTING STATEMENT</p>
<p>The United Nations Guiding Principles on Business and Human Rights (the “UNGPs”) state that businesses should adopt a human rights policy committing them to respecting internationally recognized human rights.[1] Although Gilead has a supplier code of conduct, it does not have a comprehensive human rights policy that applies to its own operations and commits Gilead to respecting the human right to health.</p>
<p>The Universal Declaration of Human Rights states, “Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including . . . medical care.”[2]Article 12.1 of the International Covenant on Economic, Social, and Cultural Rights “recognize[s] the right of everyone to the enjoyment of the highest attainable standard of physical and mental health.”[3] Access to medicines is a key element of the right to health. Target 3.8 of Sustainable Development Goal 3 assesses progress toward “access to safe, effective, quality and affordable essential medicines and vaccines for all.”[4]&nbsp;As a global pharmaceutical company, we believe Gilead should commit to respecting this right.</p>
<p>Gilead has been criticized for limiting access to its lifesaving HIV medications. Its 2024 deal licensing to six generics manufacturers the right to sell the “game-changing”[5] long-acting lenacapavir has been faulted for sidestepping the Medicines Patent Pool and for its inadequate geographic reach.[6] Lenacapavir’s annual U.S. price of over $40,000 also inhibits access.[7] Gilead recently settled one case and faces a much larger one claiming that its delay in seeking approval for a safer form of tenofovir out of a desire to fully exploit its exclusivity period for its already FDA-approved but much more toxic form of the drug caused kidney and bone damage that killed patients.[8]</p>
<p>The UNGPs also state that respecting human rights requires companies to establish an HRDD process to identify, prevent, mitigate and remedy human rights impacts.[9] Gilead does not appear to have established such a process, nor has it disclosed any human rights impact assessments resulting from HRDD it has conducted. The supplier code’s requirement that suppliers conduct HRDD to identify and address human rights risks[10] would not identify adverse impacts of Gilead’s own operations; also, suppliers’ incentives, including those created by purchasing practices, may discourage them from undertaking robust HRDD.[11] Conducting HRDD covering its own operations and those of its suppliers would give Gilead a full picture of its human rights risks and impacts.</p>
<p>[1]&nbsp; https://www.ohchr.org/sites/default/files/documents/publications/guidingprinciplesbusinesshr_en.pdf, at 15-16</p>
<p>[2]&nbsp; &nbsp;https://www.ohchr.org/en/human-rights/universal-declaration/translations/english</p>
<p>[3]&nbsp;www.ohchr.org/en/instruments-mechanisms/instruments/international-covenant-economic-social-and-cultural-rights; https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7605313/</p>
<p>[4]&nbsp;www.un.org/en/development/desa/population/migration/generalassembly/docs/globalcompact/A_RES_70_1_E.pdf</p>
<p>[5]&nbsp; https://www.unaids.org/en/resources/presscentre/pressreleaseandstatementarchive/2024/july/20240710_lenacapavir</p>
<p>[6]&nbsp; https://www.citizen.org/news/hiv-breakthrough-drug-licensing-deal-marks-significant-but-flawed-step-for-access/</p>
<p>[7]&nbsp; https://msfaccess.org/activists-aids2024-demand-break-gileads-lenacapavir-monopoly-gileads-price-100000-higher-target</p>
<p>[8]&nbsp; https://www.statnews.com/2024/08/16/gilead-suit-patent-hopping-hiv-treatment/</p>
<p>[9]&nbsp; www.ohchr.org/sites/default/files/documents/publications/guidingprinciplesbusinesshr_en.pdf, at 16</p>
<p>[10]&nbsp; https://www.gilead.com/-/media/files/pdfs/gilead-supplier-code.pdf, at 6</p>
<p>[11]&nbsp; https://betterbuying.org/the-impact-of-purchasing-practices-on-workers-human-rights/</p>

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<div class=”views-field views-field-nothing”><span class=”field-content”> Lydia Kuykendal</span></div><div class=”views-field views-field-title views-field-field-shareholder”><span class=”field-content”>Mercy Investment Services</span></div>
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<div class=”views-field views-field-nothing”><span class=”field-content”> Josie Chrosniak</span></div><div class=”views-field views-field-title views-field-field-shareholder”><span class=”field-content”>Sisters of the Humility of Mary, OH</span></div>
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<div class=”views-field views-field-nothing”><span class=”field-content”> Barbara McCracken</span></div><div class=”views-field views-field-title views-field-field-shareholder”><span class=”field-content”>Benedictine Sisters of Mount St. Scholastica</span></div>
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<div class=”views-field views-field-nothing”><span class=”field-content”> Lydia Kuykendal</span></div><div class=”views-field views-field-title views-field-field-shareholder”><span class=”field-content”>Adrian Dominican Sisters</span></div>
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<h4>Resolution Details</h4>
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<strong>Company:</strong>
<p>Gilead Sciences, Inc.</p>
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<strong>Year:</strong>
<p>2026 </p>
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<strong>Issue Area:</strong>
<p>Health </p>
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<strong>Focus Area:</strong>
<p>Pharmaceutical Patents </p>
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<strong>Status:</strong>
<p>Filed</p>
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<h2>Resolution Text</h2>
<p>RESOLVED, that the shareholders of Gilead Sciences (“Gilead”) ask the Board of Directors to provide a report (at reasonable cost and omitting confidential or proprietary information) that assesses the risks of how extending patent exclusivities of current Gilead treatments could delay Gilead from releasing biosimilars and novel therapeutics, hindering patient access to more effective and/or affordable treatments. The report need not include any material that Gilead reasonably believes would prejudice it in pending litigation or claims of which it has notice.</p>
<p>SUPPORTING STATEMENT&nbsp;</p>
<p>Patent extensions of branded drugs impede patient access to next generation therapeutics while also making the pharmaceutical manufacturer overly reliant on a revenue model that privileges the short-term over long-term growth. When patent protection of a branded drug nears its end, a manufacturer that makes minor changes to the formulation can extend patent protections; if the drug maker has a much more effective successor therapeutic ready for FDA approval, it can delay the release of the successor treatment to maximize monopolistic profits of the older, less effective version.</p>
<p>Reports suggest that Gilead delayed the release of Descovy (emtricitabine and tenofovir alafenamide) in favor of maximizing profits of Truvada (tenofovir disoproxil fumarate). The decision led to legal expenses, including settlements with plaintiffs alleging impropriety, which diverts time and resources away from research and development of innovative treatments. The FDA approved Truvada for treatment of HIV in 2004. Internal documents show that one year prior, Gilead proposed patent exclusivity strategy while already working on the more potent version of tenofovir, Descovy.(1)</p>
<p>Gilead’s delay strategy created foreseeable legal risks. The company was the subject of a New York Times exposé, which included leaked internal memos outlining the patent extension plan.(2) The negative press coverage detailed that a small percentage of Truvada users suffered kidney damage and osteoporosis, avoidable consequences had Gilead expedited development of a successor compound with a safer risk profile.&nbsp;</p>
<p>As a result of Holley v. Gilead Sciences, the company agreed to a $40 million settlement with 2,625 plaintiffs “to avoid the cost and distraction of litigating these cases, and in no way is this settlement an admission of liability or wrongdoing.”(3) While Gilead admits no fault, the settlement itself can create doubt with investors and other stakeholders.</p>
<p>Gilead opted to maximize revenue of an older therapeutic when it had a more effective version ready to enter the market. Those living with HIV were held captive to a revenue model that preferred patent extensions over bringing the next generation of safer, more effective therapies to market. A report on how patent exclusivity extensions could stifle innovation functions as a guardrail to ensure Gilead prioritizes investments in the breakthrough therapeutics of the future.</p>
<p>1 https://int.nyt.com/data/documenttools/gilead-sept-2003/1561f0e7e503288f/full.pdf. &nbsp;</p>
<p>2 How Gilead Profited by Slow-Walking a Promising H.I.V. Therapy – The New York Times.&nbsp;</p>
<p>3 Gilead Statement on Agreement in Principle to Resolve Federal TDF Litigation</p>

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<h3>Lead Filer</h3>
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<div class=”views-field views-field-nothing”><span class=”field-content”> John Arcano</span></div><div class=”views-field views-field-title views-field-field-shareholder”><span class=”field-content”>AIDS Healthcare Foundation</span></div>
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<strong>Company:</strong>
<p>Gilead Sciences, Inc.</p>
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<strong>Year:</strong>
<p>2025 </p>
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<strong>Issue Area:</strong>
<p>Health </p>
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<strong>Focus Area:</strong>
<p>Pharmaceutical Chair &amp; CEO Separation </p>
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<strong>Status:</strong>
<p>Filed</p>
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<h2>Resolution Text</h2>
<p>Shareholders request that the Board of Directors adopt an enduring policy, and amend the governing documents as necessary in order that 2 separate people hold the office of the Chairman and the office of the CEO as follows:<br>&nbsp;<br>Selection of the Chairman of the Board the Board requires the separation of the offices of the Chairman of the Board and the Chief Executive Officer.&nbsp;<br>&nbsp;<br>Whenever possible, the Chairman of the Board shall be an Independent Director.<br>&nbsp;<br>The Board has the discretion to select a Temporary Chairman of the Board who is not an Independent Director to serve while the Board is seeking an Independent Chairman of the Board on an accelerated basis. This policy could be phased in when there is a contract renewal for our current CEO or for the next CEO transition.&nbsp;<br><br>Previously this proposal topic received 44%-support from&nbsp;Gilead Sciences shareholders.&nbsp;<br><br>A lead director is no substitute for an independent board chairman. A lead director cannot call a special shareholder meeting and cannot even call a special meeting of the board. A lead director can delegate most of his lead director duties to others and then simply rubber-stamp it. There is no way shareholders can be sure of what goes on.&nbsp;<br><br>​With the current CEO serving as Chair this means giving up a substantial check and balance safeguard that can only occur with an independent Board Chairman.&nbsp;</p>
<p>It is important to have an independent Board Chairman given the context of the stagnate&nbsp;Gilead Sciences long-term stock performance during a robust stock market. The&nbsp;Gilead&nbsp;stock price was at $84 in 2020 and at only $87 in late 2024. Giving the 2 most important&nbsp;Gilead&nbsp;jobs to one person is not working at&nbsp;Gilead.</p>

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<h3>Lead Filer</h3>
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<div class=”views-field views-field-nothing”><span class=”field-content”> John Chevedden</span></div><div class=”views-field views-field-title views-field-field-shareholder”><span class=”field-content”>Chevedden Corporate Governance</span></div>
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<h4>Resolution Details</h4>
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<strong>Company:</strong>
<p>Gilead Sciences, Inc.</p>
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<strong>Year:</strong>
<p>2025 </p>
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<strong>Issue Area:</strong>
<p>Health </p>
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<strong>Focus Area:</strong>
<p>Access &amp; Affordability, Human Rights Due Diligence, Pharmaceutical Prices and Access </p>
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<strong>Status:</strong>
<p>Filed</p>
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<h2>Resolution Text</h2>
<p>&nbsp;</p>
<p>RESOLVED, that shareholders of Gilead Sciences Inc. (“Gilead” or the “Company”) urge the board of directors to adopt a comprehensive human rights policy covering Gilead’s operations, activities, business relationships, and products, that commits Gilead to respecting internationally recognized human rights, including the right to health, and to conducting human rights due diligence (“HRDD”) to identify, prevent, mitigate, and remedy the most salient adverse human rights impacts caused by Gilead’s or a supplier’s activities.</p>
<p>&nbsp;</p>
<p>SUPPORTING STATEMENT</p>
<p>&nbsp;</p>
<p>The United Nations Guiding Principles on Business and Human Rights (the “UNGPs”) state that businesses should adopt a human rights policy committing them to respecting internationally recognized human rights.[1] Although Gilead has a supplier code of conduct, it does not have a comprehensive human rights policy that applies to its own operations and commits Gilead to respecting the human right to health.</p>
<p>&nbsp;</p>
<p>The Universal Declaration of Human Rights states, “Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including . . . medical care.”[2]Article 12.1 of the International Covenant on Economic, Social, and Cultural Rights “recognize[s] the right of everyone to the enjoyment of the highest attainable standard of physical and mental health.”[3] Access to medicines is a key element of the right to health. Target 3.8 of Sustainable Development Goal 3 assesses progress toward “access to safe, effective, quality and affordable essential medicines and vaccines for all.”[4]&nbsp;As a global pharmaceutical company, we believe Gilead should commit to respecting this right.</p>
<p>&nbsp;</p>
<p>Gilead has been criticized for limiting access to its lifesaving HIV medications. Its recent deal licensing to six generics manufacturers the right to sell the “game-changing”[5] long-acting lenacapavir has been faulted for sidestepping the Medicines Patent Pool and for its inadequate geographic reach.[6] Lenacapavit’s annual U.S. price of over $40,000 also inhibits access.[7] Gilead recently settled one case and faces a much larger one claiming that its delay in seeking approval for a safer form of tenofovir out of a desire to fully exploit its exclusivity period for its already FDA-approved but much more toxic form of the drug caused kidney and bone damage that killed patients.[8]</p>
<p>&nbsp;</p>
<p>The UNGPs also state that respecting human rights requires companies to establish an HRDD process to identify, prevent, mitigate and remedy human rights impacts.[9] Gilead does not appear to have established such a process, nor has it disclosed any human rights impact assessments resulting from HRDD it has conducted. The supplier code’s requirement that suppliers conduct HRDD to identify and address human rights risks[10] would not identify adverse impacts of Gilead’s own operations; also, suppliers’ incentives, including those created by purchasing practices, may discourage them from undertaking robust HRDD.[11] Conducting HRDD covering its own operations and those of its suppliers would give Gilead a full picture of its human rights risks and impacts.</p>
<p><br>&nbsp;</p>
<p>[1]&nbsp; https://www.ohchr.org/sites/default/files/documents/publications/guidingprinciplesbusinesshr_en.pdf, at 15-16</p>
<p>[2]&nbsp; &nbsp;https://www.ohchr.org/en/human-rights/universal-declaration/translations/english</p>
<p>[3]&nbsp;www.ohchr.org/en/instruments-mechanisms/instruments/international-covenant-economic-social-and-cultural-rights; https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7605313/</p>
<p>[4]&nbsp;www.un.org/en/development/desa/population/migration/generalassembly/docs/globalcompact/A_RES_70_1_E.pdf</p>
<p>[5]&nbsp; https://www.unaids.org/en/resources/presscentre/pressreleaseandstatementarchive/2024/july/20240710_lenacapavir</p>
<p>[6]&nbsp; https://www.citizen.org/news/hiv-breakthrough-drug-licensing-deal-marks-significant-but-flawed-step-for-access/</p>
<p>[7]&nbsp; https://msfaccess.org/activists-aids2024-demand-break-gileads-lenacapavir-monopoly-gileads-price-100000-higher-target</p>
<p>[8]&nbsp; https://www.statnews.com/2024/08/16/gilead-suit-patent-hopping-hiv-treatment/</p>
<p>[9]&nbsp; www.ohchr.org/sites/default/files/documents/publications/guidingprinciplesbusinesshr_en.pdf, at 16</p>
<p>[10]&nbsp; https://www.gilead.com/-/media/files/pdfs/gilead-supplier-code.pdf, at 6</p>
<p>[11]&nbsp; https://betterbuying.org/the-impact-of-purchasing-practices-on-workers-human-rights/</p>

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<h3>Lead Filer</h3>
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<div class=”views-field views-field-nothing”><span class=”field-content”> Lydia Kuykendal</span></div><div class=”views-field views-field-title views-field-field-shareholder”><span class=”field-content”>Mercy Investment Services</span></div>
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<h3>Co-filer</h3>
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<div class=”views-field views-field-nothing”><span class=”field-content”> Barbara McCracken</span></div><div class=”views-field views-field-title views-field-field-shareholder”><span class=”field-content”>Benedictine Sisters of Mount St. Scholastica</span></div>
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<div class=”views-field views-field-nothing”><span class=”field-content”> Cathy Rowan</span></div><div class=”views-field views-field-title views-field-field-shareholder”><span class=”field-content”>Trinity Health</span></div>
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<div class=”views-field views-field-nothing”><span class=”field-content”> Lydia Kuykendal</span></div><div class=”views-field views-field-title views-field-field-shareholder”><span class=”field-content”>Adrian Dominican Sisters</span></div>
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Resolution Details

Company:

Gilead Sciences, Inc.

Year:

2024

Issue Area:

Health

Focus Area:

Access & Affordability, Pharmaceutical Patents, Pharmaceutical Prices and Access

Status:

Filed

Resolution Text

RESOLVED, that Gilead Sciences, Inc (“the company” or “Gilead”) shareholders ask the Board of Directors to establish and report on a process by which the impact of extended patent exclusivities on product access would be considered in deciding whether to apply for secondary and tertiary patents. Secondary and tertiary patents are patents applied for after the main active ingredient/molecule patent(s) and which relate to the product. The report on the process should be prepared at reasonable cost, omitting confidential and proprietary information, and be made public.

SUPPORTING STATEMENT: Intellectual property protections on branded drugs play an important role in maintaining high prices and impeding access. When patent protection on a drug ends, generic manufacturers can enter the market, reducing prices. But branded drug manufacturers may try to delay generic competition by extending their exclusivity periods. 

In part because of this behavior access to medicines is the subject of consistent and widespread public debate in the U.S. A 2021 Rand Corporation analysis concluded that U.S. prices for branded drugs were nearly 3.5 times higher than prices in 32 OECD member countries.[1] The Kaiser Family Foundation has “consistently found prescription drug costs to be an important health policy area of public interest and public concern.”[2]

This high level of concern has driven policy responses. The Inflation Reduction Act empowers the federal government to negotiate some drug prices, and in fact some have argued it enacts significant patent reform, specifically around the issue this proposal seeks to understand. This comes from one important provision stating that the only drugs that can be considered for price negotiations are those with no generic competition, thus discouraging extended patent exclusivities.

One law firm asserts that “prevailing in a patent infringement lawsuit against a forthcoming competitor may no longer be as valuable for a branded drug company because high-expenditure single-source drugs are at risk of being selected for price negotiation if there is no generic or biosimilar competitor on the market.”[3]

Additionally, there are 5 U.S. Senate bipartisan bills all aimed at addressing this issue:

Ensuring Timely Access to Generics Act of 2023 (S. 1067)
Expanding Access to Low-Cost Generics Act of 2023 (S. 1114)
Increasing Transparency in Generic Drug Applications Act of 2023 (S. 775)
Preserve Access to Affordable Generics and Biosimilars Act of 2023 (S. 142)
Stop STALLING Act of 2023 (S. 148)

Biktarvy routinely accounts for huge percentages of Gilead’s revenues – nearly 40% for FY 2022.[4] Biktarvy is also the product most at risk for regulatory changes because of overpatenting. The company has applied for 73 patents on this product and has had 44 granted.[5] Any regulatory action poses a legitimate threat to the company’s biggest money maker.

In our view, recent policy changes and the heightened exposure the company has due to Biktarvy shows that a more thoughtful process could bolster Gilead’s reputation and help avoid regulatory blowback resulting from high drug prices and perceptions regarding abusive patenting practices.

[1]  https://www.rand.org/news/press/2021/01/28.html

[2] https://www.kff.org/health-costs/poll-finding/public-opinion-on-prescription-drugs-and-their-prices/

[3] https://www.akingump.com/en/insights/alerts/the-impact-of-the-inflation-reduction-act-of-2022-on-pharmaceutical-innovation-patent-litigation-and-market-entry

[4] https://www.gilead.com/news-and-press/press-room/press-releases/2023/2/gilead-sciences-announces-fourth-quarter-and-full-year-2022-financial-results

[5] https://www.i-mak.org/2021-top-selling/

 

Resolution Details

Company:

Gilead Sciences, Inc.

Year:

2023

Issue Area:

Health

Focus Area:

Anti-Competitive Practices, Pharmaceutical Patents, Pharmaceutical Prices and Access

Status:

Vote

Vote Percentage:

16.70%


Gilead Sciences, Inc. Patents and Access – Proxy Exempt Solicitation


Resolution Text

RESOLVED, that shareholders of the Gilead Sciences Inc. (“Gilead”) ask the Board of Directors to establish and report on a process by which the impact of extended patent exclusivities on product access would be considered in deciding whether to apply for secondary and tertiary patents. Secondary and tertiary patents are patents applied for after the main active ingredient/molecule patent(s) and which relate to the product. The report on the process should be prepared at reasonable cost, omitting confidential and proprietary information, and published on Gilead’s website.

SUPPORTING STATEMENT: Access to medicines, especially costly specialty drugs, is the subject of consistent and widespread public debate in the U.S. A 2021 Rand Corporation analysis concluded that U.S. prices for branded drugs were nearly 3.5 times higher than prices in 32 OECD member countries.[1] The Kaiser Family Foundation has “consistently found prescription drug costs to be an important health policy area of public interest and public concern.”[2]

This high level of concern has driven policy responses. The Inflation Reduction Act empowers the federal government to negotiate some drug prices.[3] State measures, including drug price transparency legislation, copay caps, and Medicaid purchasing programs, have also been adopted.[4] The House Committee on Oversight and Reform (the “Committee”) launched a far-reaching investigation into drug pricing in January 2019.[5]

Intellectual property protections on branded drugs play an important role in maintaining high prices and impeding access. When a drug’s patent protection ends, generic manufacturers can enter the market, reducing prices. But branded drug manufacturers may try to delay competition by extending their exclusivity periods.

Among the abuses described by the Committee’s December 2021 report is construction of a “patent thicket,” which consists of many “secondary patents covering the formulations, dosing, or methods of using, administering, or manufacturing a drug”; they are granted after the drug’s primary patent, covering its main active ingredient or molecule, has been granted.[6] In June 2022, citing the impact of patent thickets on drug prices, a bipartisan group of Senators urged the U.S. Patent and Trademark Office to “take regulatory steps to . . . eliminate large collections of patents on a single invention.”

Gilead markets hepatitis C treatments Sovaldi and Harvoni, whose costs are so high that public payors have had to limit access. Senator Elizabeth Warren publicly criticized Gilead for erecting a thicket of “questionable” patents around these drugs.[7]

In our view, a process that considers the impact of extended exclusivity periods on patient access would ensure that Gilead considers not only whether it can apply for secondary and tertiary patents but also whether it should do so. Gilead’s current approach subjects the company to reputational risks and potential regulatory blowback resulting from high drug prices and perceptions regarding abusive patenting practices.

[1]  https://www.rand.org/news/press/2021/01/28.html

[2]  https://www.kff.org/health-costs/poll-finding/public-opinion-on-prescription-drugs-and-their-prices/

[3]  https://www.kff.org/medicare/issue-brief/explaining-the-prescription-drug-provisions-in-the-inflation-reduction-act/

[4]  https://www.americanprogress.org/article/state-policies-to-address-prescription-drug-affordability-across-the-supply-chain/

[5]  https://oversight.house.gov/sites/democrats.oversight.house.gov/files/DRUG%20PRICING%20REPORT%20WITH%20APPENDIX%20v3.pdf, at i.

[6]  https://oversight.house.gov/sites/democrats.oversight.house.gov/files/DRUG%20PRICING%20REPORT%20WITH%20APPENDIX%20v3.pdf, at 79.

[7]  https://www.warren.senate.gov/imo/media/doc/2021.06.04%20Letter%20to%20CEO%20of%20Gilead%20re%20Subcommittee%20Hearing%20.pdf

  

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