Remdesivir: Predatory pricing of an unproven drug

For an experimental drug whose safety and efficacy have not been established, remdesivir has hit the jackpot. The pandemic is providing windfall profits for its maker, Gilead Sciences Inc of the United States, which used the initial research of leading health institutes to develop the drug.

It illustrates the best the drawbacks of a patent regime that gives monopoly rights to a private drug company to make unconscionable profits even in the time of a pandemic. As the company announced its pricing of the drug — $2,340 (around Rs 1.75 lakh) for a course for patients covered by government health programmes in the US and other developed countries, and as much as $3,120 for patients with private insurance—there was widespread outrage.

Health economists and activists were universal in their criticism, saying the drug should be offered close to production cost in view of the global health emergency. That cost has been estimated at between $1 and 9.

Pharmacology experts also wondered why the price was so obscenely high since remdesivir has not proved survival benefit for patients with COVID-19, the disease caused by the SARS-CoV2 virus. 

Here’s Gilead’s explanation. Treatment with remdesivir cuts hospital stay for COVID-19 patients by five days and that’s the “value” it provides. In the US, it apparently results in hospital savings of around $12,000 per patient.

Presto, the government saves that much by taking remdesivir at Gilead’s rate. This even before it factors in the direct benefit to those patients, states Gilead virtuously.

To the fuzzy studies and company claims, Andrew Hill, a senior research fellow in Liverpool University’s pharmacology department, has a simple query: Why should five days of treatment improve clinical responses, but not 10 days of treatment?

Remdesivir is also a case study in how the US system forces Americans to pay twice over for a drug: first through government funding for the initial research conducted by public institutions and again through the company’s unchecked predatory pricing.

An analysis of remdesivir’s milestones by non-profit Public Citizen reveals that it got public funds of over $70 million, and critics claim Gilead contributed very little to the drug’s development. Yet patents on remdesivir, repurposed from its original target of treating the Ebola virus, are all with Gilead — and so, too, the profits.

Most Americans appear to think that Gilead is only playing along with a system that has been set in place by policymakers even if some of them like Bernie Sanders, a former presidential candidate, are extremely critical. Some of them have written a letter accusing the Trump administration of signing a deal that will give Gilead up to $500 million in windfall revenue borne almost entirely by American taxpayers.

It was with a sense of unreality that one watched Gilead boss Daniel O’Day tell CNBC TV that at the prices set by the company “we focused on making sure that all patients would have access, even the uninsured”. The reporter left it unchallenged although the channel had just reported that an additional six million Americans had joined the ranks of the uninsured owing to job losses in the wake of the pandemic.

In our part of the world, we have Gilead’s licencees promising remdesivir at a little over Rs 5,000. Just as unaffordable for most Indians who have no insurance.

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