In the HIV drug market, Gilead leads the way. Its products Truvada has sales of
ID: 1168712 • Letter: I
Question
In the HIV drug market, Gilead leads the way. Its products Truvada has sales of $3.1 billion. Stribild ($205
million), Complera ($800 million), Viread ($958 million), and Antripla ($3.6 billion).
Note that 2 of these drugs are joint ventures. Complera is a joint venture with Johnson & Johnson.
Johnson & Johnson’s other HIV products are Prezista ($1.7 billion) and Intelence ($0.3 billion).
The other Gilead joint venture is Antripla where proceeds are shared with Bristol-Myers. The other
Bristol-Myers HIV drugs are Sustiva ($2.4 billion) and Reyatac ($2.3 billion)
Note: for joint ventures assume revenue is divided 50-50.
Solve for the HH Index in the HIV drug industry. Show your solution.
Explanation / Answer
Gilead revenue from Complera = 50% x $800 mill = $400 mill
Gilead revenue from Antripla = 50% x $3.6 bill = $1,800 mill
Total revenue of Gilead = $(3,100 + 205 + 400 + 958 + 1,800) million = $8,663 million
Johnson & Johnson (J&J) revenue from Complera = $400 mill
Total revenue of J&J = $(400 + 1,700 + 300) mill = $2,400 mill
Mristol-Myers (BM) revenue from Antripla = $1,800 mill
Total revenue of BM = $(1,800 + 2,400 + 2,300) mill = $6,500 mill
So:
Total revenue, all 3 firms = $(8,663 + 2,400 + 6,500) mill = $17,563 mill
Market share of Gilead =8,663 / 17,563 = 49.33%
Market share of J&J = 2,400 / 17,563 = 13.67%
Market share of BM = 6,500 / 17,563 = 37.01%
So, HH Index = (49.33)2 + (13.67)2 + (37.01)2 = 2,433 + 187 + 1,370
= 3,990