Gilead Sciences, the manufacturer of an experimental antiviral drug used to shorten the effects of the COVID-19 disease, announced on Monday a $390 price tag per vial of the medication, or $2,340 per patient for a full five-day treatment if purchased through government programs. For private insurance companies, the medication will cost $520 per vial or $3,120 per patient for the full treatment.
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. It is the first antiviral drug to demonstrate patient improvement.
The company claims the cost is far below how drugs are usually priced, which is generally based on their "value." In the U.S., the earlier hospital discharge by four days would save hospitals about $12,000 per patient.
Gilead is pricing remdesivir at far below that price, he said. The company will charge governments of developed countries, including the U.S., $390 per vial. An average five-day treatment course using six vials of remdesivir would cost $2,340 per patient.
The price changes for private insurers, however.
"Because of the way the U.S. 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" or $3,120 for a full five-day course, O'Day said.
"Part of the intent behind our decision was to remove the need for country by country negotiations on price. We discounted the price to a level that is affordable for developed countries with the lowest purchasing power," he said.
"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."
In the developing world, where health care resources, infrastructure and economics are so different, the company also has entered into agreements with generic manufacturers to deliver the treatments at a substantially lower cost. O'Day did not specify that amount.
"These alternative solutions are designed to ensure that all countries in the world can provide access to treatment," he said.
The company based its decision on pricing by considering "the full scope of our responsibilities." Gilead first looked to ensure that price is not a hindrance to rapid and widespread treatment and then tried to balance that with the costs of continuing its work on the drug, to maintain its long-term research in antivirals and to invest in scientific innovation, he said.
"As with many other aspects of this pandemic, we are in uncharted territory in pricing remdesivir. Ultimately, we were guided by the need to do things differently. As the world continues to reel from the human, social and economic impact of this pandemic, we believe that pricing remdesivir well below value is the right and responsible thing to do."
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. By the end of this year, the company expects it will have invested more than $1 billion on the drug's development and production, he said.
The U.S. Food and Drug Administration has only allowed the use of remdesivir in emergencies to treat hospitalized patients with severe COVID-19. The authorization is temporary. The company would need to submit a new drug application and undergo a separate review and approval process for remdesivir to obtain federal drug approval.
Find comprehensive coverage on the Midpeninsula's response to the new coronavirus by Palo Alto Online, the Mountain View Voice and the Almanac here.