In the United States, Gilead Sciences set the price for remdesivir, its antiviral drug that can shorten hospitalization stays for individuals ill with coronavirus disease 2019 (COVID-19), based on insurance factors, and is allowing generic drug makers to create the drug for less in low to middle income countries.
The medicine could yield substantial profits for Gilead if large quantities are needed for many months, as seems likely.
Countries in the developing world will get the drug at greatly reduced prices through generic manufacturers to which Gilead has licensed production.
"The same focus went into the price and although this medicine adds significant value to the healthcare system by reducing the hospital days, we chose to price this at a very extraordinary time in a unique way", he stated.
The price of drugs in the United States has placed pharmaceutical companies and biotechs under close scrutiny.
It also said that the potential value of the drug can be recognized such as through a study showing that remdesivir shortened the recovery time of patients by an average of four days.
Health Secretary Alex Azar said the deal with Gilead Sciences will ensure a steady supply of remdesivir for American hospitals through September. But it had not been clear what the price tag of the drug would be after the donations ended. Gilead will begin production in July to supply hospitals through September.
The company based its decision on pricing by considering "the full scope of our responsibilities". It argued remdesivir could save $12,000 per patient by getting people out of the hospital faster.
Most private insurers have a model similar to that of Medicare, the official said. That's probably why shareholders sent Gilead's stock price up by about 3% in premarket trading Monday. In a statement, HHS said the agreement would cover more than 500,000 treatment courses of remdesivir for American hospitals.
O'Day added that for developing countries, the drug will be given at "a substantially lower cost".
Peter Maybarduk, a lawyer at the consumer group Public Citizen, called the price "an outrage".
During an interview Monday, the company's CEO Daniel O'Day defended the company's pricing.
O'Day said there will be enough supply of remdesivir. On the one hand, a pandemic is raging and there is no cure.
However, the high price of the drug has been blasted by experts, who note Gilead developed the drug using public funding.The group earlier said remdesivir would be cost effective at $4,500, but recently lowered its figure after the affordable steroid dexamethasone was found to reduce deaths in advanced Covid-19 patients. "The price might have been fine if the company had demonstrated that the treatment saved lives".
In the NIH trial, the death rate in all patients-including mild, moderate and severe groups-was 7.1% for remdesivir compared with 11.9% for placebo.
Its shortest treatment course which is expected to last for five days would cost $2,340 per patient equivalent of N906,750 in Nigeria.
Gilead donated 1.5 million vials of remdesivir worldwide before announcing its price.