After months of waiting, Gilead’s pricing for COVID-19 treatment remdesivir inspired the backlash many expected. Patient advocacy groups and legislators howled over the $3,120 price tag as greedy and excessive, while analysts and even an industry watchdog pegged the price as acceptable—and in some cases, lower than expected.
Ahead of the decision, pharma watchers had been pitching their own ideas, and they ranged widely enough to beg the question: Could Gilead satisfy everyone? Despite the outcry, some experts think Gilead did thread the needle on this one with a price right in line with reasonable estimates.
"Some" is the keyword there, though. And the bigger question for Gilead—and the rest of pharma for that matter—is how will remdesivir's pricing affect the industry’s reputation? Will the furor subside as patients successfully recover and save money on hospital bills or will the overpriced outcry drown out patient gains?
Sean Dickson, director of health policy at West Health Policy Center, said Monday that Gilead's price for remedesivir has already met consumers' worst expectations. He pointed to a study his organization did with Gallup two weeks ago that found almost 9 in 10 U.S. adults are either very (55%) or somewhat (33%) concerned that the pharmaceutical industry will use the COVID-19 pandemic to raise drug prices.
“The American people were right once again—Gilead is using the pandemic to charge an unfair price for remdesivir without sufficient data to demonstrate value,” Dickson wrote on Twitter.
For its part, the Trump administration gave its thumbs up, with Health and Human Services ordering the bulk of Gilead’s immediate supply of 500,000 doses. Secretary Alex Azar said the deal takes up “100% of Gilead’s projected production for July” as well as 90% of its production for August and September and an additional allocation for clinical trials.
The HHS said doses would be distributed through AmerisourceBergen with hospitals paying “no more than” Gilead’s $3,200 wholesale list price.
White House Press Secretary Kayleigh McEnany confirmed in a press briefing that President Trump has no issue with Gilead’s price point. She claimed patients wouldn't see the cost anyway, as Azar explained to her, “in layman terms, hospitals have to eat the cost of treatment use.”
Still, legislators and drug pricing watchdogs were outraged. Sen. Bernie Sanders tweeted that Gilead’s “greed must be stopped,” noting that the company's net worth of more than $15 billion is in part because it expects to profit off remdesivir even though the drug was already sitting in its pipeline.
Public Citizen, a frequent pharma critic, called the pricing an “offensive display of hubris and disregard for the public” in a statement. The group pointed out remedisivr's public funding in a pinned tweet.
BREAKING: Gilead is charging $3,000+ for its COVID drug, remdesivir.— Public Citizen (@Public_Citizen) June 29, 2020
Taxpayers spent $70,000,000 to develop this drug. It should be in the public domain.
Instead, Big Pharma is robbing us blind.
We must shame @GileadSciences into changing course. Please share this.
The advocacy group also turned on the administration in its statement: “Allowing Gilead to set the terms during a pandemic represents a colossal failure of leadership by the Trump administration. The U.S. government has authority and a responsibility to steward the technology it helped develop.”
Outspoken drug pricing reformer and Senate Judiciary Committee Chairman Chuck Grassley, an Iowa Republican, didn’t release a formal statement, but posted on Twitter: “We need innovation but also affordability. Coronavirus is all the more reason to pass my bill to lower Rx drug costs / hold Big Pharma accountable to taxpayers!”
Another vocal patient group, Patients For Affordable Drugs, condemned the decision, saying Gilead “aims to profiteer off the COVID-19 pandemic.”
David Mitchell, the group’s president and founder, called for receipts from Gilead instead of just taking the drugmakers word for its development costs. Mitchell's colleague executive directory Ben Wakana used Gilead CEO Daniel O'Day's own words explaining the pricing in a Twitter rebuttal.
Gilead CEO on Remdesivir: "There is no playbook for how to price a new medicine in a pandemic."— Ben Wakana (@benwakana) June 30, 2020
Salk on Polio vaccine: "There is no patent. Could you patent the sun?"
Banting: "Insulin does not belong to me, it belongs to the world."
sooo, maybe there is a playbook?
On the flip side, Wall Street and industry watchdogs were generally satisfied with the price. The Institute for Clinical and Economic Review (ICER) confirmed the price was in line with its own cost-benefit analysis.
ICER President Steven D. Pearson called the decision responsible and “a promising sign for pricing decisions of other treatments for COVID-19 on the horizon,” in a statement Monday.
SVB Leerink analyst Geoffrey Porges said the price was slightly lower than his firm had expected for the U.S., but because Gilead set the price the same for all developed countries, it may deliver higher-than-expected gains in other countries.
“We believe the disclosed remdesivir pricing is reasonable and should provide significant value to the Gilead shareholders and still deflect much of the criticism the company might face in this emergency,” Porges wrote in an investor note, adding that Gilead’s argument of shorter hospital stays and average savings of $12,000 per patient justifies the price.
Jeremy Faust, Brigham and Women's Hospital emergency medicine physician, said in a YahooFinance interview that the cost-effectiveness for the now-set price for remdesivir still depends on the use of the drug.
“I worry that this will be a very expensive endeavor, but look, if it does save hospital days, then it will save money, and if it doesn’t, it will cost money,” he said.
Dr. Peter Bach, director of the Center for Health Policy and Outcomes at Memorial Sloan Cancer Center in New York, said pricing shouldn’t even be the main concern.
“The key issue in my mind is not the price, it is that the company is not doing the critical studies of the product. Lives, perhaps many, would be saved if we knew how remdesivir should be used in the setting of dexamethasone in severely ill patients,” Bach said in an email.
The two most important questions he has are whether remdesivir improves patient survival and how does remdesivir works with dexamethasone, a corticosteroid with recent positive reported results in treating COVID-19.
“It was also either sloppy or deceitful to misrepresent which programs were getting discounts. They said ‘government’ programs, but that doesn’t include Medicare, Medicaid, Federal Employee Health Benefits Program (or) state employers. Basically, the vast majority of govt programs,” he said.
Bach added, “Last I checked appeasing Wall Street investors was not a goal of government investment in research, and the government paid for the pivotal trial here.”