Gilead Sciences Inc. said that it will charge USA 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.
Daniel O'Day, chief executive officer of Gilead Sciences, a biopharmaceutical company in the United States, made this known in an open letter on Monday. 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.
The company estimates that it will reduce hospital costs by $12,000 per patient, as data shows that COVID-19 patients taking Remdesivir were discharged from the hospital four days earlier than those undergoing a standard treatment plan. "This price will be offered to all governments in developed countries around the world where remdesivir is approved or authorized for use", the company said.
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, our investigational treatment, is the first antiviral to have demonstrated patient improvement in clinical trials for COVID-19 and there is no playbook for how to price a new medicine in a pandemic". But recent news that a less costly drug called dexamethasone improves survival means remdesivir should be priced between $2,520 and $2,800.
Gilead shares were about flat on Monday.More news: Supreme Court strikes down CFPB leadership structure
After this period, once supplies are less constrained, HHS will stop managing the allocation, the company said. They said Monday that the US government has received more than 500,000 additional treatments.
Gilead signed an agreement with the US Department of Health and Human Services (HHS), under which the department and states will manage the distribution to hospitals until the end of September.
Remdesivir's price has been a topic of intense debate.
Gilead's chief executive Dan O'Day told the Associated Press, "We're in uncharted territory with pricing a new medicine, a novel medicine, in a pandemic".More news: Swine flu with pandemic potential discovered in China
O'Day said there will be enough supply of remdesivir.
The company is developing an inhaled version that could be used outside a hospital setting.
Gilead said it had priced the drug "well below" what it considered to be the value of the benefits it provides. For cases that take longer to treat, the total cost could be $4.290.
ICER President Steve Pearson said in a statement that the group's analysis is based on the assumption remdesivir saves lives. That hasn't been proven yet, though one big trial indicated it might lower the death rate.
At the $2,340 government purchase price, Gilead could collect revenue of about $2.3 billion from selling around 1.5 million remdeisivr treatment course in 2020, RBC Capital analyst Brian Abrahams wrote in a Monday note to clients.More news: The Simpsons stops using white actors to voice non-white characters
To date, Gilead has donated about a quarter of a million treatment courses of remdesivir, and it is bolstering supply rapidly. Two countries are doing that for about $600 for each treatment.