The drugmaker behind the experimental COVID-19 treatment remdesivir has announced how much it will charge for the drug, after months of speculation as the company tried to figure out how to balance profit and public health needs in the middle of a pandemic.
In the United States, Gilead Sciences will charge $520 per vial for patients with private insurance, with some government programs getting a lower price. With a double-dose the first day, that comes out to $3,120 for the five-day treatment course. For governments in developed countries outside the U.S., it will cost $390 per vial, or $2,340 for the five-day course. How much uninsured patients would pay is still unclear.
"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," Gilead CEO Daniel O'Day said in an open letter posted Monday morning.
Since then, reaction to the price has been mixed.
Some advocacy organizations and members of Congress say Gilead is taking advantage of Americans during a pandemic.
Rep. Lloyd Doggett, D-Texas, called the price "outrageous."
"Without a taxpayer investment of $99 million, this drug would have been abandoned. It would be on the scrap heap of failures," he tells NPR. "So it's the taxpayer who's really taking the risk here and ought to get the reward of the angel investors that taxpayers are."
Public Citizen, a nonprofit consumer advocacy group, echoed his remarks with a similar sentiment.
"In an offensive display of hubris and disregard for the public, Gilead has priced at several thousand dollars a drug that should be in the public domain," Peter Maybarduk, director of Public Citizen's Access to Medicines Program said in a written statement.
(In a quarterly financial filing, Gilead said its investment in remdesivir for 2020 alone "could be up to $1 billion or more," much of that money used to scale up manufacturing capacity.)
Still, analysts expected Gilead to set a higher price than the company did.
Geoffrey Porges, an analyst at the investment bank SVB Leerink, said the announced price for the drug offers a "spectacularly good value."
"It's unprecedented to price the drug below the medical costs that it's saving," Porges said, adding that remdesivir could save up to $40,000 per patient, if it prevents a COVID-19 patient from needing the ICU. And there's even more value that's not built into Gilead's price, he says.
"That ignores the enormous societal value that everybody else gets from making a patient less infectious, for getting a patient back into the community, for getting them back to work sooner," Porges said. "All of those societal benefits aren't even considered in this price."
The Institute for Clinical and Economic Review, or ICER, an influential nonprofit that analyzes drug pricing, said Gilead showed "restraint" and set a "responsible" price.
That said, ICER President Steven Pearson noted that this reasoning assumes remdesivir will eventually be shown to improve COVID-19 survival — something research hasn't yet proven.
A federally funded study by the National Institute of Allergy and Infectious Diseases published at the end of April indicated that remdesivir can shorten COVID-19 patients' hospital stays by about four days. But it's unclear whether the drug also improves survival.
"If further data do not show a clear mortality benefit for remdesivir, then the price of the drug should be dramatically reduced," Pearson said in his written statement.
The drug price will send a message to companies working on other treatments, vaccines and cures for COVID-19. They have been watching remdesivir closely to find out what kind of reward they might expect for their investments, should their own treatments pan out.
At the announced price, Gilead is still expected to profit from remdesivir sales. That should be encouraging for companies currently investing and developing additional COVID-19 treatments and vaccines.
"Gilead will make a good amount of money selling this product," Craig Garthwaite, who directs the health care program at Northwestern University's Kellogg School of Management, told NPR. "And that's really the return other people have been looking at. In the end, really, the other firms aren't necessarily looking at the price Gilead charges. What they're really looking at is, what is the payoff that they get on their investment? "
Until now, Gilead had been donating doses of remdesivir for use in clinical trials and under the Food and Drug Administration's emergency use authorization announced in May. The last of the donated supply was distributed by the U.S. Department of Health and Human Services on Monday.
HHS announced that it has "secured" an additional 500,000 treatment courses for the United States — the majority of remdesivir that Gilead plans to manufacture in July, August and September. Although hospitals and insurers will now be charged for the drug, the federal government will continue to manage distribution, which had initially been plagued by confusion when it began in early May.
Overall, the price is less than the highest estimates of what it might be, but more than the lowest ones, Michael Carrier, a professor at Rutgers Law School who specializes in antitrust and pharmaceuticals, told NPR.
"Shareholders aren't getting the maximum they wanted but that's to be expected in this environment," he wrote in an email. "With no simple way to determine what a drug is worth, there will always be plenty to debate!"
MARY LOUISE KELLY, HOST:
After months of speculation, the drugmaker Gilead Sciences has finally announced the price for remdesivir. That is their experimental COVID-19 drug. NPR pharmaceutical correspondent Sydney Lupkin is with us.
Hey there, Sydney.
SYDNEY LUPKIN, BYLINE: Hi, Mary Louise.
KELLY: So the big reveal - what's it going to cost?
LUPKIN: So just to refresh our memories, remdesivir is an experimental, intravenous drug, and it's given to COVID-19 patients who are in the hospital. Even though we've been hearing about patients getting this drug in and out of studies for months, it actually isn't yet FDA approved, and it hasn't had a price. Gilead had committed to donating its initial supply. And now that that's about used up, it's announced a price. So it's going to be $520 per vial for most Americans with insurance. And there would be a lower price for certain government programs, and there are some unknowns. But outside of the U.S., the price for governments in developed countries would be about $390. And then for a five-day course of treatment, that comes out to more than $2,000 for those governments and a little bit more than $3,000 for private insurance.
KELLY: Which - well, give us some context here. That does not sound cheap. Is that a good deal? Is it a fair price?
LUPKIN: Yeah. I mean, that's a really good question. The reactions so far have been mixed. Some advocates and members of Congress are already saying the price is just way too high. They argue that taxpayers helped pay for remdesivir research and that that should result in a lower price, considering that, you know, we're in the middle of a pandemic. Rep. Lloyd Doggett, a Democrat from Texas, has called the price outrageous.
(SOUNDBITE OF ARCHIVED RECORDING)
LLOYD DOGGETT: Without a taxpayer investment of $99 million, this drug would have been abandoned. It would be on the scrap heap of failures.
LUPKIN: But on the other hand, Gilead actually set the price for remdesivir lower than a lot of analysts expected. Some said Gilead showed a lot of restraint when it set this price because it could have charged more. One told me the remdesivir price offers a really great value considering the drug could keep patients out of the ICU, which costs tens of thousands of dollars.
KELLY: Right. That prompts the next thing I want to ask you, Sydney, because setting aside whatever it's going to cost, there have been all these questions about remdesivir and whether it works and how it compares to other treatments and cures in the pipeline. Where does that stand?
LUPKIN: So right now we know from an NIH-funded study that remdesivir can shorten patients' hospital stays by about four days, but we still don't know whether it has an effect on overall survival. So even though it's a good first drug, its benefits are still somewhat modest. Meanwhile, there is now a U.K. study that shows that another drug - a cheaper, generic steroid - has actually been shown to increase survival for COVID-19 patients. So overall, we know we're going to need other drugs beyond remdesivir. Craig Garthwaite, a health economist at Northwestern University, says companies developing newer, maybe better treatments will be paying close attention to remdesivir.
CRAIG GARTHWAITE: Gilead will make a good amount of money selling this product, and that's where the return that other people are going to be looking at - in the end, really, the other firms aren't necessarily looking at the price Gilead charges. What they're really looking at is, what is the payoff that they get on their investment?
LUPKIN: They want to know, will there be a reward for their risky investments? And at the announced price, Gilead is expected to make a profit.
KELLY: One last thing to ask you, which is, is there enough remdesivir? Is there enough supply to go around?
LUPKIN: Sure. So according to HHS, it has secured all of the remdesivir Gilead will manufacture in July and about 90% of its supply manufactured for the following two months through September. But there's still a limited amount of remdesivir. Since the FDA authorized remdesivir for emergency use in May, the federal government has been in charge of distribution around the country. And that rollout has had some problems with confusion over how the government was deciding where the remdesivir should go. Early on, some states and hospitals were wondering why they didn't get any. Now the government and state health departments will coordinate shipments directly to hospitals every two weeks, so we will see how that goes.
KELLY: All right. We'll see how that goes.
NPR's Sydney Lupkin - thanks, Sydney.
LUPKIN: You bet.
(SOUNDBITE OF MUSIC) Transcript provided by NPR, Copyright NPR.