Institute for Clinical and Economic Review says U.S. should quickly decide pricing strategy to expedite developments of future COVID-19 drugs
  • Medical-cost-watchdog organization put out pricing models for potential COVID-19 treatments amid growing controversy about how the U.S. should price vaccines or drugs aimed at curbing the pandemic.
  • Advocacy groups have criticized Gilead Sciences Inc. for what they say is the elevated cost of the coronavirus treatment Remdesivir, which has benefited from about $70.5 million in public funding.
  • Gilead says it must recoup an estimated $1 billion of the development and manufacturing costs for its drug.

How much should Gilead Sciences Inc. charge for its drug Remdesivir — one of the first effective treatments for the novel coronavirus? The company priced a five-day-course of the drug at $3,120. Advocacy groups, citing government funding for the drug, say it should cost $1.  

The Institute for Clinical and Economic Review, a nonprofit organization that calculates fair drug prices, has said it depends on numerous factors, but “without an assumption of a mortality benefit, the cost-effectiveness benchmark price falls to $310.” The medical-cost-watchdog organization released a report last week saying these differences need to be worked out to expedite developing ways to treat the viral outbreak that has infected over 2.8 million Americans.

“The COVID-19 pandemic presents challenges for the U.S. unlike any that the nation has faced in generations,” co-authors Sarah Emond and Steven Pearson write in the report. “Among the many challenges will be how to adapt the policy structure surrounding the development, pricing, and payment for new vaccines and treatments… Discussion about the trade-offs and priorities involved with different pricing approaches cannot wait.”

The whitepaper gives an overview of pricing models for potential COVID-19 treatments and the different pricing methods that have been employed for public health benefit going as far back as the Spanish Flu outbreak of 1918. The authors don’t pick a winning policy but list the trade-offs of each approach and highlight some historical examples.

Polio, a global viral infection, which at its height paralyzed up to 20,000 people yearly in the U.S. has been nearly eradicated after the introduction of the polio vaccine in the mid-1950s. Jonas Salk, the American inventor of the vaccine, was funded by a charity that evolved into today’s March of Dimes. Salk did not patent his vaccine saying it belonged to the people. The U.S. government “licensed the manufacture of the vaccine to a private company, ensuring mass production and wide access,” says the report. 

The ICER whitepaper comes at a time when the pharmaceutical company Gilead has been criticized for making the COVID-19 treatment, Remdesivir too costly, after benefitting from $70.5 million in public funding for the development of the drug, say advocates such as Peter Maybarduk, the director for the access to medicines program for Public Citizen.

Gilead priced Remdesivir at $520 a vial or $3,120 for an estimated 5-day treatment for people who have private insurance. Gilead did not respond to a request for comment for this article. The company previously said it has a lower price point for U.S. military veterans and patients in countries with a national health care plan.

“We think [the price] is too high,” Maybarduk told Karma. “The U.S. government was a partner in its development and has put forward much of the key funding and so this drug really should be in the public domain, or at least the U.S. government should be using its rights to make sure it is affordable and available to all.”

Public Citizen says the drug should be priced at $1 per day.

A Remdesivir clinical trial by the National Institutes of Health showed the drug sped-up the recovery time for patients affected by the coronavirus but did not reduce resulting deaths, the New York Times reports.

Advocates say Gilead’s price is elevated compared with an estimate from ICER, which takes into account the current treatment has no effect on mortality rates.

In an open letter, Daniel O’Day, Gilead’s chairman and chief executive officer does not mention public funding but says the company priced the drug below market estimates. 

The price for Remdesivir took into account the $1 billion the company expects to have paid for the development and manufacture of the drug by the end of this year and the company’s continued commitment to further research.

“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,” O’Day wrote.