Gov. Rick Scott profits from Hep C drug tied to state prisons, opioid crisis

TALLAHASSEE — Gov. Rick Scott has drawn heat for failing to act swiftly against the rise of Hepatitis C – an often fatal liver disease coursing through Florida’s prisons and fueled by the state’s opioid crisis.

But Scott does have an interest in the issue: He’s a million-dollar investor in Gilead Sciences, the controversial manufacturer of Hep C treatment drugs that have cost U.S. taxpayers billions of dollars for treating patients.

The investment is listed in the governor’s 2013 financial disclosure with the state, one of the few expansive looks at the finances of the former health care administrator who last month reported a $232.6 million net worth — up 56 percent from a year earlier.

A blind trust contains $215 million of his wealth and makes public none of the stocks and other assets it contains.

Scott, now a candidate for U.S. Senate, faces a July 29 deadline to file a more detailed federal disclosure, which also will force him for the first time to reveal his wife’s assets along with his own wide-ranging holdings.

But the $1.1 million worth of stock Scott reported owning in Gilead five years ago shows just how the governor’s private investments can become entangled with public policy issues facing the state he leads.

Records filed by the blind trust manager with the Securities and Exchange Commission also suggest that Scott still owns the Gilead stock. And while Scott has been dogged by questions about his finances going back to before his 2010 election, he dismisses them, saying he has no control over the investments.

“When Gov. Scott was first elected, he put all of his assets in a blind trust, which is managed by an independent third party, to shield his investments from his direct control and to avoid any potential conflicts of interest,” said Kerri Wyland, a spokeswoman for Scott’s Senate campaign.

“As such, the governor has no control of what is bought or sold in the blind trust,” she added.

Scott doesn’t take a salary as governor, uses his own aircraft to get to state and campaign events and has spent $86 million of his own family’s money in winning two elections as governor.

But a lawsuit, argued last Tuesday in Tallahassee’s 1st District Court of Appeal, contends Scott is violating state disclosure law by failing to fully report his assets.

“There are public policy positions he’s taken such as on fracking, offshore oil drilling and things of that nature where we know from past disclosures that he’s had a financial interest in those, but his current interests we don’t know,” said Don Hinkle, the Tallahassee lawyer and Democratic fundraiser who has sued Scott.

Scott’s investment in Gilead — whose Hep C drugs were considered among the most expensive in the world — is complicated by the steps he’s taken in office.

A federal judge last year ruled that the Scott administration had failed to properly care for as many as 20,000 state inmates with Hepatitis C — a move that forced the Legislature this year to spend $21.7 million on treatment with Gilead drugs.

“Gov. Scott is making money off a Gilead medication that is a lifesaving one. Scott is beyond cruel to deny that therapy to Florida inmates,” said Jeremy Leaming, spokesman for the National Health Law Program.

The NHLP, along with Florida Legal Services, earlier sued the administration in a separate Hep C matter, claiming the state Medicaid program was only using Gilead’s costly drugs when patients were so sick they were close to needing a liver transplant.

Medicaid changed its policy in 2016 to require insurance companies that take part in the program to provide treatment with the medications earlier in a patient’s care. A 12-week treatment, which can lead to a cure, cost more than $30,000 at the time.

Scott’s Gilead investment appears to have begun in 2013, when the company’s stock began soaring after the groundbreaking Solvadi drug treatment was launched at a price of $1,000-a-pill, or $84,000 for a 12-week course.

Harvoni and Epclusa are other expensive Hep C drugs the company makes and commonly used. But increasing competition from other products has caused Gilead’s stock to stall after years of sharp growth.

In those early go-go years, both public and private payers derided the Hep C drugs as budget busters.

A U.S. Senate Finance Committee investigation in 2015 concluded that Gilead put profits before patients in pricing its Hep C drugs, refusing to lower prices or offer discounts to maximize returns and stave-off competitors.

The same probe found that Medicaid programs across the nation were able to treat less than 3 percent of the 700,000 patients infected with the disease, despite spending more than $1 billion on Solvadi.

The Florida prison system’s refusal to treat inmates suffering from Hep C was changed only after a lawsuit by the Florida Justice Institute, a nonprofit public interest law firm.

“This court will not tolerate further foot-dragging," U.S. District Judge Mark Walker wrote in his order last December. “One can only wonder how long Defendant would have kicked the can down the road had Plaintiffs not filed this case.”

Hepatitis C is a leading cause of cirrhosis and fatal liver disease. It’s blood-borne and has been traced to contaminated blood transfusions from decades ago, injected drug use and tattooing with nonsterile equipment.

Former health care workers, particularly from the baby boom generation, along with current and former drug users, make up much of the Hep C population.

“I don’t know anything about the governor’s investments,” said Pam Langford, president of HEALS of the South, a hepatitis support and advocacy organization. “But with specialty drugs, you can make a financial killing because no one else has what you’re making.”

The nationwide opioid problem — which is raging through Florida communities — has been a Hep C driver.

Scott and state lawmakers spent more than $50 million in this year’s budget to fight opioid drug use in Florida.

But because of rising inmate health care costs, the governor also endorsed the Department of Corrections decision to slash almost $30 million from community re-entry and drug treatment programs for inmates soon to leave prison.

Scott’s Senate campaign, though, defends his record, saying fighting opioid addiction remains a priority.

“The governor has consistently fought against the national opioid crisis, including securing major state and federal funding and signing multiple pieces of legislation to combat opioid abuse and support law enforcement officers,” Wyland said.