Gilead Sciences' (NASDAQ:GILD) Sovaldi has been a game changing therapy for thousands of patients in America and Europe, but patients living in poverty stricken countries in Africa and Asia have been shut out from the drug, which costs $84,000 for 12 weeks of treatment.

However, cash-strapped nations may soon gain access to Sovaldi thanks to a deal announced by Gilead over the weekend. As early as next summer, seven generic drugmakers, including Mylan Labs and Ranbaxy Labs, will be able to manufacture and sell the drug in developing markets.

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Source: Gilead Sciences via Google Maps

Bringing a generic to market
The seven generic manufacturers that signed on with Gilead to produce generic Sovaldi are among the globe's biggest generic drugmakers. That means that they have the scale necessary to reach millions of patients far more quickly than if Gilead had tried to go at it alone.

The potential for generic Sovaldi is huge. Developing markets still rely heavily on peg-interferon and ribavirin to treat patients and those drugs only result in a functional cure in about half of the patients taking them. Additionally, patients must take those medications for 48 weeks and often suffer from nasty side effects. The combination of coin-flip efficacy, a long treatment period, and side-effects means that many patients end up discontinuing treatment.

Gilead

Source: Gilead Sciences

Risky business?
Generic drugmakers will set their own price for generic Sovaldi and pay Gilead a royalty on sales. That revelation leaves some scratching their heads wondering why Gilead would allow generic competition years before patents expire.

But investors need to look at the incredible rise and fall of Vertex former blockbuster hepatitis C treatment, Incivek, to see why Gilead's decision makes sense.

When Vertex launched Incivek in 2011 it quickly became the fastest drug to ever reach billion dollar blockbuster sales status; however, Invicek sales fell as quickly as they climbed as doctors and patients began warehousing patients ahead of Sovaldi's launch. As a result, Incivek announced last month it would stop producing Incivek just three years after winning FDA approval.

Given that history, Gilead's decision to expand Sovaldi's reach and relevancy is savvy given that a wave of competing drugs are about to hit the market, including Gilead's own next generation therapy, which combines Sovaldi with Gilead's new drug ledipasvir.

The FDA is set to make a decision on Sovaldi/ledipasvir on October 10th, but it's not the only hepatitis C drug awaiting an FDA decision. The FDA is also considering new hepatitis C drugs from AbbVie and Bristol-Myers, too. And Merck isn't that far behind the pack either.

That means that Sovaldi's day in the sun may soon be over. Gilead's executives admitted as much during their second quarter earning conference call, reporting that they had already started seeing signs of patient warehousing ahead of the launch of this next new wave of treatments.

Fool-worthy final thoughts
Gilead kept the Indian market to itself and the company is rolling out its own generic Sovaldi there at a price of just $300 per bottle, or $900 for a 12-week course of treatment. That was a smart decision. There are 12 million people in India with chronic hepatitis C, or roughly three times as many as there are in the United States.

It's likely Gilead's price in India will serve as the benchmark for generic manufacturers. If that proves true, then royalties on generic Sovaldi could still prove substantial. Overall, the World Health Organization estimates that there are between 120 million and 170 million cases of hepatitis C globally. That's a massive patient population that could benefit substantially from increased access to Sovaldi, particularly considering that just 70,000 people had been treated with Sovaldi during the first six months of 2014. However, generic Sovaldi may still end up being an asterisk compared to Sovaldi/ledipasvir. That's because Gilead's Sovaldi/ledipasvir proved a functional cure in up to 99% of patients during trials.

Todd Campbell owns shares of Gilead Sciences. Todd owns E.B. Capital Markets, LLC. E.B. Capital's clients may or may not have positions in the companies mentioned. Todd owns Gundalow Advisors, LLC. Gundalow's clients do not have positions in the companies mentioned. The Motley Fool recommends Gilead Sciences. The Motley Fool owns shares of Gilead Sciences. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.