Gilead's $2340 price for coronavirus drug draws criticism

Gilead's $2340 price for coronavirus drug draws criticism

Gilead's $2340 price for coronavirus drug draws criticism

While there are still no COVID-19 treatments approved by the Food and Drug Administration, scientists have found some success in hastening the recovery time of severe patients by using remdesivir.

Now, the guessing is over.

Multiple global trials of remdesivir are ongoing, and an inhaled version of the intravenous drug that could be taken outside a hospital setting is also being tested, the company said.

This mean the price for a five-day course, the standard treatment, comes out to $2,340 per patient.

"While we don't pretend to be pricing experts, this range seems reasonable considering that the value of early discharge is $12,000 per the USA government (which could be increased based on the average four-day shortening of stay) and that Gilead is spending $1 billion on manufacturing by year-end".

"Part of the intent behind our decision was to remove the need for country by country negotiations on price", Gilead chairman and CEO Daniel O'Day said in an open letter.

The price tag is below the $5,080 per course recommendation by USA drug pricing research group, the Institute for Clinical and Economic Review (ICER), last week.

The price sets a benchmark for all other treatments and vaccines in development for Covid-19, which shows profit is possible though it may not be as large as some had hoped. However, if low-priced steroid dexamethasone-which made a big splash recently with preliminary data-does deliver peer-reviewed data showing it can save the lives of seriously ill patients, remdesivir's price should drop to the range of $2,520 to $2,800, according to ICER.

Remdesivir's selling price has been hugely predicted because it grew to become the 1st medication to display reward in the pandemic, which has killed a lot more than 50 % a million men and women globally in 6 months. It argued remdesivir could save $12,000 per patient by getting people out of the hospital faster.

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BofA's Take: BofA Securities has been estimating the total cost of remdesivir treatment at $5,000, with potential price controls factored in, analyst Geoff Meacham said in a recent note.

On the other hand, Gilead investors may find the price less appealing.

Rates outperform and is revisiting remdesivir sales forecasts and Gilead's valuation. And now, a modest pricing strategy following cost-effectiveness models' suggestions offers a relief from the possibility of damage to the company's reputation, which could hurt Gilead's business elsewhere.

GILD Price Action: Gilead shares were up 1.42% at $75.63 at the time of publication Monday.

O'Day obviously also sees the long-term value in pricing remdesivir reasonably.

After this period, once supplies are less constrained, HHS will stop managing the allocation, Gilead said.

"The price puts to rest any notion that drug companies will "do the right thing" because it is a pandemic", Dr. Peter Bach, a wellness coverage specialist at Memorial Sloan Kettering Most cancers Heart in NY explained in an e mail.

Countries in the developing world will get the drug at greatly reduced prices through generic manufacturers to which Gilead has licensed production.

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