Gilead chooses middle ground in pricing of coronavirus drug
NEW YORK: Gilead Sciences Inc said on Monday that it would charge US hospitals roughly $3,120 for most patients who need remdesivir, picking a middle ground in a high-profile decision on the cost of one of the first drugs for Covid-19.
Patients suffering from the illness caused by the novel coronavirus are usually given six vials of remdesivir over five days. The price, which comes to $520 a vial, would apply to commercially insured patients in the United States, according to a letter from Gilead chief executive Daniel O’Day posted on the company’s website.
It plans to charge $390 a vial, or $2,340 for a five-day regimen, for direct government purchases by the US or other developed countries.
Gilead’s pricing decision is consequential because it sets a precedent for how much future Covid-19 treatments might cost.
While it’s higher than some patient groups had pushed for, it was close to a level that some drug-pricing watchdogs have said will be acceptable based on remdesivir’s expected benefit.
The medicine could yield substantial profits for Gilead if large quantities are needed for many months, as seems likely.
Gilead said in a statement that it would offer the lower price to developed countries in order to create a one-price model that would avoid the need for negotiations that could slow down access.
“We wanted to make sure that nothing gets in the way of remdesivir getting to patients,” O’Day said in an interview. “The price will make sure all patients around the world have access to this medicine.”
Brazil, which is in the midst of the one of the world’s worst outbreaks, may be one of the countries set to get the lower price.
Remdesivir is one of the first widelyused drugs for Covid-19. It received an emergency use authorisation from US regulators in May, after a big trial found it sped recovery by about four days in hospitalised patients.
Hundreds of treatments and vaccines are in development around the globe as researchers race to find ways to halt a global pandemic that’s infected over 10 million people and killed more than 500,000.
Gilead had promised to donate the drug through June, but what the company would charge after that supply runs out has been furiously debated.
It wasn’t immediately clear how many US patients would qualify for the lower price beyond those treated at facilities operated by the Department of Veterans Affairs. Meanwhile, for patients in the Medicare programme for the elderly, hospitals will purchase the medicine at commercial rates.
The company suggested that it could have charged more based on the value the medicine provides, the typical approach drugmakers use in setting pricing for new and innovative therapies.
It argued remdesivir could save $12,000 per patient by getting people out of the hospital faster. But it went with a lower price in order to make sure that all developed countries could afford it.
“The price is within the reasonable range, and should contribute significantly to Gilead’s revenue and growth through the mid-2020s,” Geoffrey Porges, an analyst at SVB Leerink LLC, said in a note to clients.
Gilead also said Monday that it reached an agreement with the
Department of Health and Human Services to manage allocation of remdesivir in the US through September.
In a statement, HHS said the agreement would cover more than 500,000 treatment courses of remdesivir for American hospitals.