Gilead Sets Price of Remdesivir for COVID-19 Treatment

June 29, 2020

In an open letter, Gilead Chairman and CEO Daniel O’Day announced the price of remdesivir treatment for COVID-19.

Gilead Sciences has reached a decision on how much remdesivir should cost as a treatment for the novel coronavirus disease 2019 (COVID-19), according to an open letter by Daniel O’Day, chairman and CEO of Gilead. 1

According to O’Day, the manufacturer has set a price for governments of developed countries of $390 per vial.1

“Based on current treatment patterns, the vast majority of patients are expected to receive a 5-day treatment course using 6 vials of remdesivir, which equates to $2340 per patient,” O’Day wrote. O’Day noted that the same government price of $390 per vial will apply in the United States. However, the price for US private insurance companies is expected to be $520 per vial.1

The letter outlined Gilead’s method of sorting out the complexities of setting a price for a life-saving drug amid an unprecedented pandemic. Although under normal circumstances Gilead prices its medications according to its value to patients, “we approached this with the aim of helping as many patients as possible, as quickly as possible and in the most responsible way,” O’Day wrote.1

Last week, the Institute for Clinical and Economic Review (ICER) provided an update to pricing models for remdesivir through an adapted methodology specifically designed for pandemics, and evaluated remdesivir using 2 pricing models for COVID-19 treatments:2

  1. Cost recovery for the manufacturer, where the price is adequate to return the costs of production and may also recoup drug-specific development costs
  2. Traditional cost-effectiveness analyses looking at the incremental health benefits and costs within the health system

ICER incorporated Gilead’s most recent ACTT-1 COVID-19 trial results to create these models and reported that its updated cost-recovery benchmark price range for a full course of remdesivir is $10 to $600, if only considering the marginal cost of producing the treatment. The reported updated cost-recovery benchmark when considering the manufacturer’s forecasted 2020 clinical development expenses would be $1010 to $1600.2

Based on traditional cost-effectiveness analyses, ICER noted a benchmark range for $4580 to $5080 per treatment course. In a scenario analysis in which remdesivir is used within a populaton also receiving dexamethasone, the same cost-effectiveness price benchmark falls to a range of $2520 to $2800, according to ICER’s model.2

Instead of following normal pricing procedures, which would take into account remdesivir’s ability to shorten recovery time by an average of 4 days, effectively saving a hospital an estimated $12,000 per patient, as well as remdesivir’s direct benefit to patients, Gilead has decided to price remdesivir well below its value, according to O’Day.1

O’Day explained that cutting out country-by-country price negotiations and offering remdesivir at a price that is affordable for countries with the lowest purchasing power will facilitate their goal of providing immediate and widespread care to patients with COVID-19 globally.1

Although setting a price for remdesivir may seem to suggest the final stages of Gilead’s involvement with the COVID-19 treatment, O’Day stressed the company’s continued investment.1

“Our work on remdesivir is far from done. We continue to explore its potential to help in this pandemic in various ways, such as evaluating treatment earlier in the course of the disease, in outpatient settings, with an inhaled formulation, in additional patient groups and in combination with other therapies,” he wrote.1

References:

  1. An Open Letter from Daniel O’Day, Chairman & CEO, Gilead Sciences. News Release. Gilead; June 29, 2020. Accessed June 29, 2020. https://stories.gilead.com/articles/an-open-letter-from-daniel-oday-june-29.
  2. ICER Provides First Update to Pricing Models for Remdesivir as a Treatment for COVID-19. News Release. ICER; June 24, 2020. Accessed June 29, 2020. https://icer-review.org/announcements/updated_icer-covid_models_june_24/.