Gilead sets price for coronavirus drug remdesivir at $3400, sparking criticism

Grant Boone
June 30, 2020

The maker of a drug shown to shorten recovery time for severely ill COVID-19 patients says it will charge US$2340 ($3400) for a typical treatment course for people covered by government health programs in the United States and other developed countries.

In an open letter released on June 29, Daniel O'Day, chairman and CEO of Foster City-based Gilead, said the drug remdesivir shortened patient recovery time from COVID-19 by an average of four days in early clinical trials.

Private insurance companies will have to pay more - $520 - per vial of remdesivir, however, "because of the way the US system is set up and the discounts that government healthcare programs expect", the company said. For the "vast majority" of patients, a 5-day treatment course would be priced at $2,340 (containing six vials in all). It received an emergency use authorization from USA regulators in May, after a big trial found it sped recovery by about four days in hospitalized patients.

"At the level we have priced remdesivir and with government programs in place, along with additional Gilead assistance as needed, we believe all patients will have access", O'Day said.

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. The company also holds a monopoly on manufacturing human immunodeficiency virus (HIV) antiviral drug Truvada, for which it charges in excess of $20,000 per year to halt the onset of acquired immune deficiency syndrome (AIDS).

Shares of Gilead gained as much as 2.7% in trading Monday in NY. After September, HHS will stop managing the allocation, Gilead said.

The Health and Human Services Department said on Monday it will ship the final allocation of 120,000 treatment courses that Gilead donated amid the pandemic, which has killed over 125,000 people in the U.S.

The agency said it secured more than 500,000 remdesivir courses for USA hospitals through September.

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Despite the price, O'Day promised during a Monday CNBC interview that "there will not be an issue for access with remdesivir". "We are aware of the significant responsibility that comes with pricing remdesivir, and the need to be transparent on our decision".

"For $1 per day, remdesivir can be manufactured at scale with a reasonable profit", he said.

Peter Maybarduk is a lawyer at the consumer group Public Citizen. For cases that take longer to treat, the total cost could be $4.290.

'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 NY said.

Remdesivir could also be sold for as low as $2,520 because of a cheap steroid called dexamethasone that has also been shown to reduce risk of death, the group said.

Its shortest treatment course which is expected to last for five days would cost $2,340 per patient equivalent of N906,750 in Nigeria.

After donating its 1.5 million doses of Remdesivir to the USA government to allocate on an as-needed basis through the end of June, the company also announced that it will begin charging for the drug from July 1, 2020.

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