Gilead Sciences takes back remdesivir distribution as demand drops

After a somewhat chaotic initial rollout by the U.S. government, Gilead Sciences is now taking distribution of COVID-19 drug remdesivir into its own hands.

Starting Thursday, Gilead will directly sell remdesivir, branded as Veklury, to American hospitals, ending a five-month phase when the U.S. Department of Health and Human services was responsible for allocating it, the company and HHS said. AmerisourceBergen will remain the sole U.S. distributor through the end of the year.

Gilead has been collecting revenue on the drug since July at the wholesale acquisition cost of $3,120 for a typical five-day treatment course. That's when its U.S. donation of about 1.5 million doses ran out.

At that price, Wolfe Research analyst Tim Anderson projects remdesivir peak sales in both 2020 and 2021 at just below $3 billion. Gilead itself expects to sell about 1 million to 1.5 million courses this year, which roughly equates to $3.5 billion in revenue.

Remdesivir is one of only a few drugs to show signs of benefits in COVID-19 during the early days of the pandemic. But just like the world’s response to the virus, the initial distribution of the antiviral drug was confusing under the feds’ oversight.

Some doses went directly to hospitals but not necessarily to those in greatest need, and some hospitals either didn’t receive enough or were left empty-handed, NPR reported in May, weeks after the remdesivir won its emergency use authorization from the FDA. The allocations improved later, but HHS' methods for earmarking doses remained a mystery.

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Meanwhile, Gilead quickly worked to ramp up supply, increasing internal manufacturing capacity and signing on contractors.

Now, the supply’s exceeding market demand. At the end of June, HHS secured more than 500,000 treatment courses of the drug, which represented nearly all of Gilead’s yield through September. However, states and territories haven’t been accepting their full allocations, and only 32% of the total amount was actually purchased by hospitals from July to September, HHS said Thursday, citing data from its Office of the Assistant Secretary for Preparedness and Response.

Now that Gilead’s meeting real-time demand for the drug in the U.S., the HHS and the company decided it’s time for the HHS to bow out and let the company handle commercial sales directly to hospitals. Remdesivir distribution will now follow a plan that Gilead said “closely reflects the traditional model hospitals use to procure medicines.”

The Big Biotech also said it will meet global demand starting this month, even in the event of another wave of COVID-19 infections.

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Remdesivir has shown it can cut recovery time for hospitalized patients by about 30%, or four days, but its ability to slash death rates wasn’t statistically significant in a clinical trial run by the NIH.

Besides, the drug’s benefit to moderately ill patients was debatable; a study showed the drug, as a 5-day treatment but not as a 10-day regimen, was better at helping moderate COVID-19 patients achieve clinical status improvement compared with standard therapy.

In comparison, low-cost corticosteroids have shown they can save lives in critically ill patients. Most notably, dexamethasone’s ability to cut death rates by 35% among patients on invasive mechanical ventilation has many industry watchers hailing it as the new standard of care—and may have led to declining interest in remdesivir.

Gilead’s currently seeking full FDA approval for remdesivir in COVID-19, including for those with moderate disease. Eli Lilly recently said adding its rheumatoid arthritis drug Olumiant on top of the Gilead drug helped patients recover even faster, as shown in an NIH-run study.