Gilead Remdesivir Price Triggers Analyst Debate on Recouping Investment

Grant Boone
July 1, 2020

An HHS spokesperson said that approximately 94,200 treatment courses would be available in July (100% of the available drug), another 174,900 courses by August, and 232,800 more by September.

The agency granted remdesivir an Emergency Use Authorization in May, but the order is temporary and "does not take the place of the formal new drug application submission, review and approval process", the company said. "In normal circumstances, we'd have priced this medicine in accordance with value. They buy that drug and supply that to you out of their pocket, and if it delivers this one-third shorter hospital stay that is shown in the data, then that might actually be a beneficial financial move for the hospitals". The department also announced Monday that it's secured more than 500,000 treatment courses of remdesivir through September, which it said will be distributed to hospitals based on the need of their state and territorial health departments.

Remdesivir was developed by Gilead as a possible treatment for Ebola, but was not approved as it did not perform well compared with other candidate drugs.

According to O'Day, the company has entered into an agreement with the U.S. department of health and human services (HHS) whereby HHS and states will continue to manage allocation to hospitals until the end of September.

The price tag is slightly below the range of $2,520 to $2,800 suggested last week by US drug pricing research group the Institute for Clinical and Economic Review (ICER) after British researchers said they found that the cheap, widely available steroid dexamethasone significantly reduced mortality among severely ill COVID-19 patients.

According to the letter, remdesivir is the first antiviral to demonstrate patient improvement in clinical trials for COVID-19, and the pricing of the drug has been a major concern.

However, the price was swiftly criticised; a consumer group called it "an outrage" because of the amount taxpayers invested toward the drug's development. At the current price of $390 per vial, remdesivir is positioned to achieve the aim of providing immediate net savings for healthcare systems.

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"Part of the intent behind our decision was to remove the need for country by country negotiations on price", O'Day wrote.

"We discounted the price to a level that is affordable for developed countries with the lowest purchasing power".

"In the USA, the same government price of $390 per vial will apply".

However, he noted that "because of the way the United States system is set up and the discounts that government healthcare programs expect, the price for U.S. private insurance companies, will be $520 per vial", which translates to a total cost of $3,120.

"At this price we expect routine adoption of remdesivir for nearly all moderate to severe Covid patients in the U.S".

Globally, over 10.3 million COVID-19 cases have been recorded. After this period, once supplies are less constrained, HHS will no longer manage allocation.

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