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The cost of COVID-19 drug remdesivir: $2,340 to $3,120 per patient

With discounted price, 'we believe all patients will have access,' says Gilead Sciences CEO Daniel O'Day

Foster City-based Gilead Sciences CEO Daniel O'Day announced prices for experimental drug remdesivir in an open letter on June 29. Courtesy Gilead.

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.

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"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.

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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.

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The cost of COVID-19 drug remdesivir: $2,340 to $3,120 per patient

With discounted price, 'we believe all patients will have access,' says Gilead Sciences CEO Daniel O'Day

by / Palo Alto Weekly

Uploaded: Mon, Jun 29, 2020, 5:21 pm

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.

Comments

parent
Stanford
on Jun 29, 2020 at 6:42 pm
parent, Stanford
on Jun 29, 2020 at 6:42 pm
13 people like this

Research and development cost for this drug was paid for by your tax dollars. Is it right for them to charge us again to use the drug? Or is this just a big corporate ripoff?


Chris
University South
on Jun 30, 2020 at 8:10 am
Chris, University South
on Jun 30, 2020 at 8:10 am
2 people like this

This is the health care system your fellow citizens voted for. How about trying to influence them. At least, the pricing is far cheaper than cancer drugs and far cheaper than even a night in the hospital, so even at this pricing, it saves s lot of money.


Dan
Professorville
on Jun 30, 2020 at 9:09 am
Dan, Professorville
on Jun 30, 2020 at 9:09 am
8 people like this

Here in Palo Alto, it costs a lot more than $3,000 a night to be in the hospital.

It would have been nice for the Palo Alto version of this story too be adapted to local reality.

Spending $3,000 on this drug to avoid perhaps $20,000 to $50,000 which you might spend on 4 extra days at Stanford hospital seems like a pretty good bargain to me. Plus spending four less days in the hospital is kind of priceless...

Seems like a bargain to me.


C
Palo Verde
on Jun 30, 2020 at 10:40 am
C, Palo Verde
on Jun 30, 2020 at 10:40 am
2 people like this

I'll just add that this only one of many different treatments being researched to fight CoVid. Some treatments are actually inexpensive and based on existing medicine. We don't know what treatments will be used a year from now, but I'm glad to see these promising treatments.

Meanwhile, practice social distancing and wear a mask. We still don't know the long-term effects of the virus, and you or a loved one doesn't need to find out the hard way when it's only a matter of time before a solution is found.


Marketing Guru
Another Palo Alto neighborhood
on Jul 1, 2020 at 1:36 am
Marketing Guru, Another Palo Alto neighborhood
on Jul 1, 2020 at 1:36 am
8 people like this

Cost is what it actually costs to produce something. Price is whatever the market will bear.

Justifying the high price of Remdesivir by comparing it to the even more ridiculous price-tag for a hospital stay is circular logic, but this is of course exactly the rational the Gilead executive team used when pricing the drug.

India, Costa Rica, Australia, South Korea, Brazil, and Israel are all using the dirt cheap, decades old, Malaria/Lupus medication Hydroxychloroquine for early stage treatment of COVID-19, but Trump is also using it so it will probably kill you.

"Doctors and Patients Pawns in a Dangerous Political Brinkmanship" Web Link


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