Setting the price for a drug
A RECENT letter by the Malaysian Health Coalition (MHC) and the Drugs for Neglected Diseases Initiative (DNDi) has highlighted once again how people living in low- and middle-income countries like Malaysia are frequently denied access to affordable, life-saving medicines.
By excluding Malaysia from its voluntary licensing agreements, the biopharmaceutical company Gilead Sciences has denied Malaysians access to affordable generic versions of remdesivir, a potential treatment for Covid-19, thus forcing us to pay whatever price it charges.
This raises two questions: What price will Gilead set for remdesivir, and why should it set a high price for this drug?
An article published in
Politico recently (“Remdesivir helps coronavirus patients – but at what cost?”, May 6) revealed that while Gilead has not decided on the final price yet, Wall Street analysts have begun suggesting that the drug could be priced between US$5,000 and US$10,000 for a 10-day course of treatment, allowing the company to make between US$5bil and US$10bil over three years.
A more conservative estimate by the Institute for Clinical and Economic Review (Icer) suggests
that remdesivir could be priced at US$4,500. These are prices that most Malaysians will not be able to afford. There is also no good reason for remdesivir to be excessively priced.
For starters, there is lack of evidence that remdesivir prevents or reduces death from Covid-19; we only know that it shortens the time patients need to recover from the disease. Based on this, Icer itself suggests that if remdesivir only shortens recovery time, then it could be priced at US$390 instead. This price tag, however, is still a difficult one to swallow for many Malaysians.
Secondly, the cost of manufacturing remdesivir does not justify a high price tag. An independent study by Dr Andrew Hill and his colleagues published in “Journal of Virus Eradication” estimated the cost of manufacturing a full 10-day course of remdesivir at US$9, or US$0.93 per day. Even if we factor in the costs of marketing and packaging, it is still difficult to justify the high price.
As for research and development costs, it is worth noting that a large portion of the remdesivir development costs were funded by a US$37.5mil grant from the United States government, and the current clinical trials are funded by non-profit organisations such as the World Health Organisation and the US National Institute of Allergy and Infectious Diseases.
Keep in mind as well that prior to Covid-19, remdesivir was an experimental drug with no approval for any use in any country.
In short, there is no reason that remdesivir should be highly priced. The patent system and Malaysia’s exclusion from Gilead’s voluntary licensing agreements, however, mean that we have no alternatives even if an exorbitant price is set on the drug.
Hopefully, Gilead and other pharmaceutical companies with vaccines and treatments in their pipeline will consider the global need for their products and make compassionate decisions on pricing and availability. Failing this, Malaysia and other low- and middle-income countries should remember that they have the legal right to set aside patents using compulsory licences in order to protect their people during a public health emergency.