Gilead Sciences Inc. said that it will 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. It will charge the U.S. government and other developed countries $390 per vial, or about $2,340 for a typical five-day course of treatment.
"While we don't pretend to be pricing experts, this range seems reasonable considering that the value of early discharge is $12,000 per the USA government (which could be increased based on the average four-day shortening of stay) and that Gilead is spending $1 billion on manufacturing by year-end". Gilead's O'Day said the vast majority of patients, more than 90%, are being treated with the 5-day course.
It also said that the potential value of the drug can be recognized such as through a study showing that remdesivir shortened the recovery time of patients by an average of four days.
Piper Sandler analyst Tyler Van Buren said that the remdesivir pricing for developed countries, is "perfectly reasonable" and within expectations considering that the "value of early discharge is $12,000 per the United States government".
The company also said it has entered into agreements with generic manufacturers to provide the drug at a "substantially lower cost" in developing countries.
Remdesivir is expected to be the first COVID-19 treatment that will receive full FDA approval, which could explain its high price.
A similar lawsuit filed in December 2019 by HIV prevention group PrEP4All Collaboration alleges Gilead purposefully delayed development of Descovy for five years in order to maintain its monopoly on PreP drugs via the Truvada patent, even though Descovy was proven to be more effective at treatment HIV than Truvada.
After donating its 1.5 million doses of Remdesivir to the US 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.
O'Day said pricing of the drug was a balancing act. For commercially insured patients, the five-day course will cost $3,120.
In the interview, O'Day said that US$1 per day was "not a realistic price point". Porges has advocated for a price that allows Gilead to make a reasonable profit as an incentive for private companies to research medicines for this and future epidemics. "It was developed using significant taxpayer funding".
Shares of Gilead gained as much as 2.7% in trading Monday in NY. Now the government and state health departments will coordinate shipments directly to hospitals every two weeks, so we will see how that goes. "The price might have been fine if the company had demonstrated that the treatment saved lives".
RBC Capital Markets analyst Brian Abrahams saw the pricing through a different lens and argued it could imply revenue of about $2.3 billion this year, more than offsetting Gilead's spending.
Gilead is continuing to evaluate remdesivir's effectiveness against the coronavirus, including its possible use earlier in the course of the disease, in outpatient settings, with an inhaled formulation and in combination with other therapies.