Covid-19 drug to cost government entities US$2,340 for 5-day course

California

GILEAD Sciences said it will charge the US government and other developed countries US$390 per vial for its coronavirus-fighting drug Remdesivir, or about US$2,340 for a typical five-day course of treatment.

The company said in a statement on Monday that it would offer this price to developed countries around the world to create a one-price model that would avoid the need for country-by-country negotiations that could slow down access.

Gilead's chief executive Daniel O'Day said: "We wanted to make sure that nothing gets in the way of remdesivir getting to patients."

He added that the price will give patients across the world access to this medicine. The US$390 per vial price is for government entities. Once supply is less tight and Gilead starts selling the drug in normal distribution channels, the list price for private insurance companies and other commercial payers in the US will be US$520 a vial, or US$3,120 for a five-day course.

Remdesivir is one of the first widely used drugs for Covid-19. It received an emergency use authorisation from US regulators in May, after a big trial found the medicine sped recovery by about four days among hospitalised patients. Hundreds of treatments and vaccines are in development around the globe as researchers race to find ways to halt the pandemic that has infected over 10 million people and killed more than 500,000.

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Gilead had promised to donate its supply of the drug through June, but what the company would charge after the donation runs out has been furiously debated. The drugmaker's pricing decision is consequential because it sets a precedent for how much future medicines for Covid-19 may cost.

The company suggested that it could have charged more based on the value the medicine provides, the typical approach drug-makers use in setting prices for new and innovative therapies. It argued that Remdesivir could save US$12,000 per patient by getting people out of the hospital faster. But it went with a lower price in order to ensure that all developed countries could afford it.

To date, Gilead has donated about a quarter of a million treatment courses of the drug, and it is bolstering supply rapidly. By the end of the year, it expects to produce around two million treatment courses.

Mr O'Day said pricing of the drug was a balancing act. On the one hand, a pandemic is raging and there is no cure. On the other hand, the company is a for-profit entity that has made a huge investment into manufacturing large quantities of the medicine fast, and is developing new versions that can be more easily administered. BLOOMBERG