Gilead's COVID med remdesivir is scarce and costly, AGs say, urging feds to sidestep its patents

remdesivir
A group of attorneys general are asking the federal government to use march-in rights on Gilead's remdesivir. (Gilead Sciences)

Unhappy with the price and availability of Gilead’s remdesivir—the only drug with FDA clearance to treat COVID-19—dozens of state attorney generals have called for the federal government to exercise march-in rights to allow for broader production of the medicine.

In a letter to the heads of the FDA, HHS and NIH, 34 attorneys general wrote that Gilead has been unable to ensure “sufficient” supply and has priced the medicine out of reach for many patients who need it. Gilead is charging $3,120 per treatment course for patients with commercial insurance, Medicare or Medicaid, and $2,340 for patients on certain smaller federal programs. 

Federal laws allow the government to sidestep patents if the patent holder received taxpayer support and isn't meeting public health needs, the AGs wrote. 

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"Here, we think it is clear that Gilead has not established a reasonable price, nor has it met the health and safety needs of the public given the COVID-19 pandemic," they added.

A Gilead spokeswoman said the company is "deeply disappointed" the AGs "have chosen to misrepresent facts on access" to remdesivir. The letter is "premised on multiple factual inaccuracies and a fundamental lack of understanding of how remdesivir is being used to treat patients," she added. Gilead maintains the AGs requested steps are "unauthorized under these circumstances" and won't boost access.

Studies have shown the drug reduces the length of hospitalization for patients with severe COVID-19 and cuts their risk of death. The drug has received “substantial federal funding,” the AGs wrote, but the supply is still “dangerously limited." In a recent survey of mostly hospital pharmacists, one-third said they don’t have enough supply of the drug on hand. 

The AGs are urging the federal government to step in and use march-in rights under the Bayh-Dole Act to allow third parties to make the medicine to “reach sufficient production rates to mitigate the health and safety concerns.” 

Gilead’s price for the drug has received mixed reviews. Steve Pearson, president of drug cost watchdog ICER, said the company made a “responsible” decision, while some critics, including Rep. Lloyd Doggett of Texas, argued the company gouged taxpayers, who helped pay to develop the drug.  

RELATED: Gilead's long-awaited remdesivir price is $3,120, in line with watchdog estimates 

The company’s CEO, Daniel O’Day, has said Gilead believes “all patients will have access” at the current price with government programs and company financial assistance. Further, by enabling patients to leave hospitals sooner, the drug provides around $12,000 in savings per patient, O'Day argued. That doesn't factor in "direct benefits" to patients who recover more quickly.

O'Day said the price is "well below" the drug's value, an argument echoed by Wall Street analysts. 

If the federal government doesn’t use march-in rights, the AGs asked for the power for states to sidestep patents. They’re further urging the feds to use the Defense Production Act to boost remdesivir production and distribution. 

“This is not the time for any company to extract large corporate profits from uninsured and underinsured Americans—nor can we allow the individual market priorities and weaknesses of one company to determine the fates of hundreds of thousands of people,” the AGs wrote. 

RELATED: Gilead banks on blockbuster remdesivir with sunnier 2020 outlook 

Gilead has been working to increase its remdesivir production for months, and on a recent conference call, executives said they expect the company to adequately meet global supply starting in October. The company has additionally partnered with generic drugmakers for supply in 127 countries around the world. Gilead is planning to spend $1 billion this year to expand production capacity, its spokeswoman said.

The AGs wrote that Gilead's supply is inadequate to treat all of the COVID-19 patients in the U.S., but as the company's spokeswoman pointed out, not all patients need the drug. The medicine is only authorized for hospitalized patients with severe COVID-19, she said, and "thankfully, many will recover prior to hospitalization and never need the drug." 

Amid the rollout, Gilead is starting to see a financial boost from remdesivir. The company recently raised its revenue guidance for the year, expecting to deliver 1 million to 1.5 million treatment courses in 2020. That’s about $3.5 billion in second-half revenue, according to a calculation from RBC Capital Markets analyst Brian Abrahams.

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