By Mariam Sunny and Mrinalika Roy (Reuters) -Shares of Gilead rose 3% after the U.S. Supreme Court on Friday upheld a federal mandate that requires health insurers to cover preventive care services including those for reducing HIV risk and cancer screenings at no extra cost to patients. At the heart of the case was whether […]
Health
Gilead shares rise after US top court ruling on preventive coverage

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By Mariam Sunny and Mrinalika Roy
(Reuters) -Shares of Gilead rose 3% after the U.S. Supreme Court on Friday upheld a federal mandate that requires health insurers to cover preventive care services including those for reducing HIV risk and cancer screenings at no extra cost to patients.
At the heart of the case was whether the U.S. Preventive Services Task Force, which determines which preventive services insurers must cover at no cost under the Obamacare law, was unconstitutionally structured because its members are appointed without Senate confirmation.
The New Orleans-based 5th U.S. Circuit Court had ruled that the task force’s structure violates the Constitution. On Friday, the U.S. top court in a 6-3 decision reversed that ruling.
The decision preserves a meaningful growth driver for companies developing HIV PrEP medications including Gilead, Merck and GSK, helping refocus attention on commercial execution, said Daina Graybosch, an analyst at Leerink Partners.
Gilead’s HIV business, which includes prominent PrEP, or pre-exposure prophylaxis, drug Descovy, generated $4.6 billion in sales in its latest reported quarter. Total revenue during the said period was $6.6 billion.
The broad insurance coverage without cost-sharing under Obamacare has fueled steady prescription volumes.
Gilead in an emailed statement to Reuters said it remained committed to supporting minimal out-of-pocket costs as well as protections for important preventive services and medicines.
“The decision is reassuring to Gilead investors who have been looking to Yeztugo’s launch as a growth driver,” Morningstar analyst Karen Andersen said, adding it “reaffirms a foundation” for HIV prevention coverage.
Earlier this month, the U.S. Food and Drug Administration approved the company’s keenly watched twice-yearly shot lenacapavir, branded as Yeztugo, to prevent HIV infection in adults and adolescents.
Shares of cancer test maker Exact Sciences climbed 6.3% to $55.07 as analysts said the ruling removed a key overhang on its commercial execution. Peer Guardant Health rose nearly 2% to $50.87.
Still, some concerns lingered.
Mitchell Warren, executive director of AIDS nonprofit AVAC, called the ruling “a relief” for maintaining access to critical preventive care, but noted that the Secretary of Health and Human Services (HHS) wields enormous power over the constitution of such task forces, underscoring future policy uncertainty.
(Reporting by Mrinalika Roy and Mariam Sunny in Bengaluru, Julie Steenhuysen in Chicago; Editing by Sriraj Kalluvila)