$4,500 or $10? Manufacturer of COVID Drug Has Big Decision

All eyes on Gilead Sciences, manufacturer of remdesivir
By John Johnson,  Newser Staff
Posted May 7, 2020 12:10 PM CDT
Updated May 10, 2020 1:50 PM CDT
Big Question on Hot COVID Drug: How Much Will It Cost?
In this March 2020 photo, a vial of the drug remdesivir is inspected at a Gilead manufacturing site in the United States.   (Gilead Sciences via AP)

Now that the FDA has approved the drug remdesivir for the treatment of COVID-19, a big question looms: How much will it cost? The drug's manufacturer, Gilead Sciences, is donating its current stock, enough to treat about 140,000 patients, reports Barron's, but its pricing decision after that will be under scrutiny. Much will depend on data still to come in on the drug's effectiveness, but this "will set the bar for how all coronavirus treatments that come after remdesivir will be priced," writes Bob Herman at Axios.

  • $4,500: A report issued last Friday by the Institute for Clinical and Economic Review, a research group that offers guidance on pricing, said Gilead could charge about $4,500 per treatment course if further testing proves that it saves lives. It figures a treatment course of 10 days.
  • $390: The group says the price could be $390 per course if the drug has a lesser effect: that is, it doesn't save lives, but it speeds up recovery by a few days, per Axios.
  • $10: The report also provides a low range of $10, which it says would allow Gilead to recover the cost of making the drug but forgo any profits. How Reuters frames the issue in a headline: "Will Gilead price its coronavirus drug for public good or company profit?" The advocacy group Public Citizen is all for this $1-per-day model, arguing that "Gilead initially developed remdesivir as one of several candidate treatments for hepatitis C and has made tens of billions off its successful hepatitis C drugs."

  • Big money: If Gilead goes with the upper range of $4,500, that could generate $2 billion in revenue for the company, reports Bloomberg. If the drug does indeed save lives, this price is "really reasonable," in the view of one analyst.
  • Old controversy: Gilead ran into much controversy in 2013 when it priced a new drug for hepatitis C, Sovaldi, at $1,000 per pill, notes Reuters. That led to a huge backlash against Big Pharma in general. "This is a tremendous opportunity for drug manufacturers" to help the industry's image, says a pricing expert at firm ZS Associates. "There has been an overwhelmingly negative focus on drug prices."
  • Lawmakers' letter: After the FDA move, Democratic Reps. Lloyd Doggett of Texas and Rosa DeLauro of Connecticut wrote a letter to Health and Human Services chief Alex Azar to demand an "appropriate accounting" of how much taxpayer help Gilead received in developing the drug in the form of grants and such, reports the San Francisco Business Times. The outlet sees this as "one of the first salvoes" in the Gilead pricing debate. An "unaffordable drug is completely ineffective," the lawmakers wrote.
(Read more remdesivir stories.)

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