New fair price for Gilead's remdesivir? Below $2,800 if dexamethasone lives up to its COVID-19 promise

Nearly two months ago, an influential drug cost watchdog pegged $4,460 as the fair price for Gilead Sciences’ authorized COVID-19 therapy remdesivir. But on coronavirus time, that's an eternity—and a lot has changed since then.

In an updated assessment published Wednesday, the Institute for Clinical and Economic Review (ICER) slightly dialed up its cost-effective price for remdesivir to a range of $4,580 to $5,080 based on detailed clinical data, updated cost estimates and interactions with Gilead.

Three cheers for the Big Biotech? Not so fast.

A recent announcement from U.K. researchers on the successful use of low-cost dexamethasone in a large COVID-19 clinical trial added another wrinkle to the price. That is, if the steroid’s benefits are confirmed in a peer-reviewed paper and therefore qualify it as the new standard of care, remdesivir’s cost should be cut to around $2,520 to $2,800, ICER said.

The new calculus pulls some additional data points into the mix. Once again, it relies on an external study to estimate that the raw materials needed to make remdesivir would cost about $10 for a 10-day course. But ICER also considers generic remdesivir now available in India from local drugmakers Hetero Labs and Cipla. Figures on those meds suggest hard costs for Gilead's brand at $390 to $780 per treatment.

Meanwhile, Gilead has said it would spend about $1 billion on remdesivir R&D in 2020. Divide that by around 1 million courses ICER assumes Gilead could sell in the first year, and that's an additional $1,000 to cover. Gilead recently said it’s expected to increase remdesivir supply to 2 million courses this year, though many doses have been committed to donations.

REALTED: Fair price for Gilead's COVID-19 med remdesivir? $4,460, cost watchdog says

The watchdog combined those figures with detailed data from the National Institutes of Health's ACTT-1 trial—including adjustments based on the age of patients at hospitalization, updated mortality results and time-to-recovery benefits—to reach its new $4,580-to-$5,080 base-case scenario.

That increase in remdesivir's cost-effective price would have been good news for Gilead. But findings from the U.K. Recovery trial of dexamethasone add one major uncertainty.

According to results just published on preprint site medRxiv, dexamethasone treatment led to a 35% reduction in death rate among patients on invasive mechanical ventilation and 20% for those receiving oxygen without invasive ventilation.

Because of that showing, clinical experts told ICER that dexamethasone could soon become the new standard of care throughout the U.S., “and that the relative benefits of remdesivir will now be judged to be most pertinent as an adjunct to dexamethasone treatment,” the organization noted in its new analysis. In the ACTT-1 trial, the death rate for remdesivir among severe patients were reduced to 7.7% from 13% for placebo, a difference that was not statistically significant.

RELATED: New dexamethasone stats suggest lifesaving potential for severe COVID-19 patients

As ICER notes, the Recovery data haven't been peer reviewed yet. But if patients indeed enjoy a significantly lower risk of death thanks to dexamethasone, remdesivir would have a reduced role to play, ICER figures. And that, in turn, would push the cost-effective price for remdesivir down to $2,520 to $2,800.

Now, the ball is back in Gilead’s court. As the initial 1.5 million doses of donated remdeisivr are expected to run out this month, the biotech will soon unveil its commercial pricing strategy in a moment that could define the conversation around pharma reputation for years to come.