Gilead’s $2,340 price on virus drug

San Francisco Chronicle Late Edition - - BUSINESS - By Mar­i­lynn Mar­chione Mar­i­lynn Mar­chione is an As­so­ci­ated Press writer.

The maker of a drug shown to shorten re­cov­ery time for se­verely ill COVID­19 patients says it will charge $2,340 for a typ­i­cal treat­ment course for peo­ple cov­ered by gov­ern­ment health pro­grams in the United States and other de­vel­oped coun­tries.

Gilead Sciences an­nounced the price Mon­day for remde­sivir, and said the price would be $3,120 for patients with pri­vate in­surance. The amount that patients pay out of pocket de­pends on in­surance, in­come and other fac­tors.

“We’re in un­charted ter­ri­tory with pric­ing a new medicine, a novel medicine, in a pan­demic,” Gilead’s chief ex­ec­u­tive, Dan O’Day, told the As­so­ci­ated Press.

“We be­lieve that we had to really de­vi­ate from the nor­mal cir­cum­stances” and price the drug to en­sure wide ac­cess rather than based solely on value to patients, he said.

How­ever, the price was swiftly crit­i­cized; a con­sumer group called it “an out­rage” be­cause of the amount tax­pay­ers in­vested to­ward the drug’s de­vel­op­ment.

The treat­ment cour­ses that the Foster City com­pany has do­nated to the U.S. and other coun­tries will run out in about a week, and the prices will ap­ply to the drug af­ter that, O’Day said.

In the U.S., fed­eral health of­fi­cials have al­lo­cated the lim­ited sup­ply to states, but that agree­ment with Gilead will end af­ter Septem­ber. They said Mon­day that the gov­ern­ment has se­cured more than 500,000 ad­di­tional cour­ses that Gilead will pro­duce start­ing in July to sup­ply to hos­pi­tals through Septem­ber, and stressed that that does not mean the gov­ern­ment ac­tu­ally was ac­quir­ing that much, just en­sur­ing the avail­abil­ity.

“We should have suf­fi­cient sup­ply ... but we have to make sure it’s in the right place at the right time,” O’Day said

In 127 poor or mid­dlein­come coun­tries, Gilead is al­low­ing generic mak­ers to sup­ply the drug; two coun­tries are do­ing that for around $600 per treat­ment course.

Remde­sivir’s price has been highly an­tic­i­pated since it be­came the first medicine to show ben­e­fit in the pan­demic, which has killed more than half a mil­lion peo­ple glob­ally in six months.

The drug, given through an IV, in­ter­feres with the coro­n­avirus’ abil­ity to copy its ge­netic ma­te­rial. In a U.S. gov­ern­ment­led study, remde­sivir shortened re­cov­ery time by 31% — 11 days on av­er­age ver­sus 15 days for those given just usual care. It had not im­proved sur­vival ac­cord­ing to pre­lim­i­nary re­sults af­ter two weeks of fol­lowup; re­sults af­ter four weeks are ex­pected soon.

The In­sti­tute for Clin­i­cal and Eco­nomic Re­view, a non­profit group that an­a­lyzes drug prices, said remde­sivir would be cost­ef­fec­tive in a range of $4,580 to $5,080 if it saved lives. But re­cent news that a cheap steroid called dex­am­etha­sone im­proves sur­vival means remde­sivir should be priced be­tween $2,520 and $2,800, the group said.

“This is a high price for a drug that has not been shown to re­duce mor­tal­ity,” Dr. Steven Nis­sen of the Cleve­land Clinic said in an email. “Given the se­ri­ous na­ture of the pan­demic, I would pre­fer that the gov­ern­ment take over pro­duc­tion and dis­trib­ute the drug for free. It was de­vel­oped us­ing sig­nif­i­cant tax­payer fund­ing.”

Peter May­bar­duk, a lawyer at the con­sumer group Pub­lic Cit­i­zen, called the price “an out­rage.”

“Remde­sivir should be in the pub­lic do­main” be­cause the drug re­ceived at least $70 mil­lion in pub­lic fund­ing to­ward its de­vel­op­ment, he said.

“The price puts to rest any no­tion that drug com­pa­nies will ‘do the right thing’ be­cause it is a pan­demic,” Dr. Peter

Bach, a health pol­icy ex­pert at Me­mo­rial Sloan Ket­ter­ing Can­cer Cen­ter in New York said in an email. “The price might have been fine if the com­pany had demon­strated that the treat­ment saved lives. It didn’t.”

While it may be a sticker shock for many, “from the health sys­tem per­spec­tive, if remde­sivir can shorten du­ra­tion of hos­pi­tal­iza­tion by four days, then the medicine pro­vides a rea­son­able value,” Dr. David Boul­ware, an in­fec­tious dis­ease spe­cial­ist at the University of Min­nesota, said in an email.

O’Day said that short­en­ing hos­pi­tal­iza­tion saves about $12,000 per pa­tient. Gilead says it will have spent $1 bil­lion on de­vel­op­ing and mak­ing the drug by the end of this year. Gilead shares fell 0.013% to close at $74.56 on Mon­day.

The drug has emer­gency use au­tho­riza­tion in the U.S. and Gilead has ap­plied for full ap­proval.

Jef­feries phar­ma­ceu­ti­cals an­a­lyst Michael Yee wrote to in­vestors that Gilead’s price was a bit above what stock bro­kers were ex­pect­ing. He said that at that price, analysts ex­pect Gilead to make $525 mil­lion on remde­sivir sales this year and $2.1 bil­lion next year.

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