New COVID-19 Drug Has Hefty Price Tag, Who’s Paying?

New COVID-19 Drug Has Hefty Price Tag, Who's Paying?

( – When a patient enters the hospital because of complications due to COVID-19, they are likely to be prescribed the only drug officially approved by the FDA to treat the virus, Remdesivir, which was initially created to treat Ebola patients. However, it’s extremely costly and in short supply, which begs the question: who’s paying for it?

After the coronavirus emerged, various companies began looking into the drug as a solution to help patients. It’s proven to cut down recovery times significantly. Those who received the medication recovered in 11 days on average — that’s four days sooner than without the drug.

There are results with Remdesivir, but concerns of accessibility have prompted officials into action.

On Tuesday, 30 state attorneys general sent a letter to the FDA, the National Institutes of Health (NIH), and the US Department of Health and Human Services (HHS). They argued the patented drug made by California-based Gilead Sciences, Inc. is extraordinarily overpriced, unaffordable, and in limited supply. The drug also positions the company as a monopoly in the COVID-19 race to provide relief and a cure for the contagious virus.

The AGs asked the federal government to intervene to force Gilead to increase supply and lower prices, or at a minimum, allow the states to do it. They argued that the pharmaceutical company should not be allowed to profit from the drug during the pandemic.

To date, the pharmaceutical company spent approximately $50 million on research and development. By the end of the year, it expects to spend $1 billion on manufacturing the drug.

Currently, Gilead charges hospitals $3,120 for a typical patient with private insurance. That pays for a five-day treatment of six vials that cost $520 each. However, for those on government health care plans like Medicare, the price will be lower at $390 per dose.

AGs Demand Feds Force Increased Manufacturing

According to the AGs’ letter, Gilead received millions of taxpayer dollars, including a $30 million NIH-funded clinical trial. As a result, they argue the federal government should use the Bayh-Dole Act or allow the states to exercise march-in rights. This would force the company to license the drug to other manufactures to increase production.

HHS responded by saying they don’t have that authority. Furthermore, the agency said that march-in rights only apply to drugs that were developed and manufactured with funding by the federal government. In this case, the government helped fund a clinical trial last spring and the distribution to ensure that the drug gets where it needs to go, not the initial development.

Gilead Says Hospitals Will Save Significant Money Because of Remdesivir

In a statement to Fox Business, Gilead said the letter had several inaccuracies. The company argued that the hospitals would see significant savings from COVID-19 patients who recover four days sooner, resulting in quicker discharges. Second, patients will not be billed separately for Remdesivir in an in-patient hospital setting as part of their deductible. Finally, it would take at least six months for generic manufacturers to start making the drug.

March-in rights have never been used against a patented drug, so HHS’s response is not surprising. There is only one recourse the AGs may have to force Gilead to reduce the drug price: sue the company and accuse them of price-fixing.

By Don Purdum, Freelance Contributor

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