(Reuters) -Shares of Gilead rose nearly 3% after the U.S. Supreme Court on Friday preserved a key element of the Obamacare law that helps guarantee that health insurers cover preventive care at no cost to patients.
At the heart of the case was whether the U.S. Preventive Services Task Force (USPSTF), which determines which preventive services insurers must cover at no cost, was unconstitutionally structured because its members are appointed without Senate confirmation.
The 5th Circuit ruled in 2024 that the task force’s structure violates the Constitution.
On Friday, the justices in a 6-3 decision reversed the lower court’s ruling.
This eased fears on insurance coverage for PrEP, or pre-exposure prophylaxis, drugs approved in the U.S. to prevent HIV infection, which can cause AIDS.
“This ruling is a relief in maintaining the critical role of the U. S. Preventive Services Task Force to cover preventive care services under the Affordable Care Act, including HIV PrEP,” said Mitchell Warren, AIDS nonprofit AVAC’s executive director in an email.
The drugs are made by Gilead and by ViiV Healthcare, a joint venture of GSK, Pfizer and Shionogi.
Analysts had warned ahead of the verdict that any adverse decision could reduce uptake among lower-income and younger patients, weighing on Gilead’s HIV prevention revenues.
Gilead’s HIV franchise, including its PrEP products, is a significant revenue driver.
Obamacare had fueled broad insurance coverage without cost-sharing, contributing to steady prescription volumes.
Gilead’s HIV business, which includes prominent PrEP drug Descovy, accounted for $4.6 billion in sales in the latest reported quarter. Total revenue during the said period was $6.6 billion.
(Reporting by Mrinalika Roy and Mariam Sunny in Bengaluru; Editing by Sriraj Kalluvila)
