Gilead Sciences has priced its covid-19 treatment, remdesivir, at $3,120 for the typical U.S. patient with private insurance.
Trump administration secures 500,000 courses of drug for hospital use
Gilead Sciences, the maker of the first covid-19 treatment found to have worked in clinical trials, remdesivir, said Monday it will charge U.S. hospitals $3,120 for the typical patient with private insurance.
Soon after the announcement, the Trump administration said it had secured nearly all of the company’s supply of the drug for use in U.S. hospitals through September, with a contract for 500,000 treatment courses, which it will make available to hospitals at Gilead’s price.
Other developed countries will pay 25 percent less than the United States, a discount Gilead said reflects a need to make the drug as widely available as possible throughout the world.
The company has licensed generic manufacturers to produce the drug for developing countries, “at a substantially lower cost,” the company said.
Gilead’s announcement settles a lingering question about a drug that has been shown to have a modest benefit but remains the only therapy authorized by the Food and Drug Administration to treat hospitalized patients with covid-19, the disease caused by the novel coronavirus. A clinical trial sponsored by the government showed the drug — invented by Gilead but developed largely by taxpayer-funded agencies — sped up hospital recoveries by four days. It had no statistically significant impact on survival for covid-19 patients.
Setting a price for a novel drug in the middle of a pandemic posed an unprecedented challenge, Gilead said. Cutting four days of hospital costs for each patient saves the U.S. health system $12,000 per patient, the company said. Based on that benchmark, it suggested it could have justified a higher price.
“As with many aspects of this pandemic, we are in uncharted territory in pricing remdesivir,'' Gilead’s chairman and chief executive, Daniel O’day, wrote in an open letter. “As the world continues to reel from the human, social and economic impact of this pandemic, we believe that pricing remdesivir well below value is the right and responsible thing to do.''
Gilead said it will have spent $1 billion to develop and manufacturer remdesivir by the end of 2020. Gilead invented the drug about 10 years ago when it was searching for treatments for hepatitis C but did not develop it. Later, the drug’s potential as an antiviral for emerging diseases was explored through a partnership with the government. Taxpayers spent at least $70 million developing the drug, according to advocates.
An independent analysis last week by the Institute for Clinical and Economic Review said Gilead could recover its costs by distributing the drug for as little as $1 to $60 per dose, or $100 to $160 per dose if all of the company’s 2020 costs are taken into account.
Under Monday’s pricing, Gilead set the price at $520 per dose in the United States and $390 per dose in other developed countries. Gilead said six doses are required, while the U.S. Department of Health and Human Services said it was using an average of 6.25 vials in its estimated costs for hospitals.
Members of Congress and consumer advocates raised concerns Monday that Gilead could be seeking to profit unfairly on a taxpayer-backed invention amid a pandemic.
“We are in the midst of a full-blown global health crisis,” said Rep. Diana Degette (D- Colo.), who chairs the House Energy and Commerce oversight and investigations panel. “We need to make sure any treatment that has the potential to save lives is available to all those who need it, not just those who can afford it.”
Rep. Lloyd Doggett (D-tex.) said Gilead had set “an outrageous price for a very modest drug, which taxpayer funding saved from a scrapheap of failures.” He criticized the Trump administration for not demanding a lower price in its contract for the first 500,000 courses of treatment.
“Gilead has priced at several thousand dollars a drug that should be in the public domain,” said Peter Maybarduk, access to medicines director for the nonprofit group Public Citizen. “Gilead did not make remdesivir alone. Public funding was indispensable at each stage, and government scientists led the early drug discovery team. Allowing Gilead to set the terms during a pandemic represents a colossal failure of leadership.”
HHS will distribute the drug to state health departments based on the number of hospitalized patients with covid-19, the agency said. State health departments will then allocate the drug to hospitals based on need — the same process HHS employed for a donation of 120,000 treatment courses of the drug, whose final allocation is being shipped on Monday.
“To the extent possible, we want to ensure that any American patient who needs remdesivir can get it,” HHS Secretary Alex Azar said in a statement.
Demand for remdesivir soared after the National Institutes of Health announced on April 29 that a clinical trial had shown that hospitalized patients with advanced covid-19 who received the experimental drug recovered faster than similar patients who received a placebo. Two days later, the Food and Drug Administration, citing those results, approved the drug to treat severely ill patients.
Confirmed coronavirus cases have soared in recent weeks, and health officials warned on Sunday that the window was closing to stop the spread of the virus. The number of confirmed cases surpassed 2.5 million on Sunday as a crushing new wave of infections continued to bear down throughout the country’s South and West. Across the nation, 40,587 new daily cases were reported.
Remdesivir must be administered intravenously, which has limited its use to hospitalized patients with significant covid-19 progression. The company is testing an inhaled form, which would allow patients to use it at home, earlier in the disease, when it might have a greater benefit.
Meanwhile, an inexpensive steroid has been shown to have a greater benefit on the death rate for patients in hospitals. The 60year-old drug, dexamethasone, reduced the risk of death for patients on ventilators by a third and cut the risk of death for patients on oxygen by a fifth, according to a study published in the Lancet on June 16.
Lab techs work on remdesivir in Cairo last week. The drug has been found in a study to speed up hospital recoveries for covid-19 patients.