Hospitals will pay no more than Gilead's Wholesale Acquisition Price, which amounts to approximately $3,200 per treatment course, the HHS statement said.
Gilead is set to begin selling Remdesivir on July 1.
There are now more cases of COVID-19 in the United States than in Europe, with several US states hitting new records for numbers of cases.
Gilead's CEO said the first results from the National Institue of Allergy and Infectious Diseases study in hospitalized patients with COVID-19 showed that remdesivir shortened time to recovery by an average of four days.
Gilead has entered into an agreement with the U.S. Department of Health and Human Services (HHS) so that the HHS and states can manage allocation to hospitals until the end of September.
The U.S. pharmaceutical company behind a drug that's been approved by the Food and Drug Administration for emergency use for covid-19 patients announced today the drug will cost $US3,120 ($4,553) per typical treatment course for individuals with private insurance plans.
"We should have sufficient supply. but we have to make sure it's in the right place at the right time", O'Day said.
In the developing world, where healthcare resources, infrastructure and economics are very different, Gilead has entered into agreements with generic manufacturers to deliver treatment at a substantially lower cost.
Gilead Sciences Inc on Monday priced its COVID-19 antiviral remdesivir at $2,340 per patient for wealthier nations and agreed to send almost all of its supply of the drug to the United States over the next three months.
Clinical trials for remdesivir were done in Georgia at Emory University Hospital and its affiliated hospitals. Given through an IV, the medication is created to interfere with an enzyme that reproduces viral genetic material. In a USA government-led study, remdesivir shortened recovery time by 31 per cent - 11 days on average versus 15 days for those given just usual care.
The Institute for Clinical and Economic Review, a nonprofit group that analyses drug prices, said remdesivir would be cost-effective in a range of US$4580 to US$5080 ($6683 to $7413) if it saved lives. But recent news that a cheap steroid called dexamethasone improves survival means remdesivir should be priced between US$2520 ($3677) and US$2800 ($4086), the group said.
"In normal circumstances, we would price a medicine according to the value it provides".
Remdesivir had previously failed as an Ebola treatment and has not shown that it can reduce COVID-19 deaths.
"Remdesivir should be in the public domain" because the drug received at least US$70 million ($102 million) in public funding toward its development, he said.
After news of Remdesivir's pricing broke, Twitter users denounced Gilead for "price-gouging" amid a global pandemic.
"Even just considering these immediate savings to the healthcare system alone, we can see the potential value that remdesivir provides. This is before we factor in the direct benefit to those patients who may have a shorter stay in the hospital". Gilead says it will have spent US$1 billion ($1.45 billion) on developing and making the drug by the end of this year.