Wall Street Profits From Heroin Epidemic As Gilead's Hep C Drug Profits Soar

By John Lavitt 04/27/16

As the demand for hepatitis C treatments rise, investors are betting big that heroin will continue to be the 'X factor' to their financial success.

Wall Street Profits From Heroin Epidemic As Gilead's Hep C Drug Profits Soar
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The maker of the leading hepatitis C and HIV drugs, Gilead Sciences, has a lot to gain from the heroin epidemic, as a result of increased injection drug use and thus increased HCV and HIV infection rates.

This conclusion was drawn by an anonymous author on the investment research website Seeking Alpha, who says the opioid crisis is an "overlooked X Factor" that will "continue to drive sales growth" of Gilead Sciences' HCV and HIV products for years to come. The company is "well positioned to benefit from this disturbing societal trend," wrote the author. It's not a stretch to conclude that more injection drug use, which is correlated to the contraction of both HCV and (to a lesser extent) HIV, will add to Gilead's profits. Gilead is the maker of leading HCV drugs, Harvoni and Sovaldi, and Viread and Truvada for HIV. 

As the demand for heroin has risen on the black market, producers have upped the supply, pumping cheap heroin throughout the U.S. Fueling this demand are people transitioning from prescription painkillers, who chose to use heroin because pills were "far more expensive and harder to obtain," according to a 2016 report by the American Society of Addiction Medicine. The report stated that four in five people began using painkillers before switching to heroin.

According to the head of the Centers for Disease Control and Prevention, Tom Friedan, the effects of the opioid epidemic on HCV and HIV infection rates are already materializing. "Most people coming in to treatment for heroin addiction report injecting the drug," Friedan said during a press briefing last July, "and I'll tell you that as a doctor who started my career taking care of patients with HIV and other complications from injection drugs, it's heartbreaking to see injection drug use making a comeback in the U.S." The bottom line: "We're seeing clusters of hepatitis C and of HIV coming from opioid injection."

The author wraps up his analysis with a bleak forecast of what's to come, predicting that the rising rate of injection heroin use will take "at least three years to begin to reverse." But until then, Gilead will likely continue to post high profit margins driven by its treatments for HCV and HIV.

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Growing up in Manhattan as a stutterer, John Lavitt discovered that writing was the best way to express himself when the words would not come. After graduating with honors from Brown University, he lived on the Greek island of Patmos, studying with his mentor, the late American poet Robert Lax. As a writer, John’s published work includes three articles in Chicken Soup For The Soul volumes and poems in multiple poetry journals and compilations. Active in recovery, John has been the Treatment Professional News Editor for The Fix. Since 2015, he has published over 500 articles on the addiction and recovery news website. Today, he lives in Los Angeles, trying his best to be happy and creative. Find John on Facebook, Twitter, and LinkedIn.