By Michael Erman, Ludwig Burger and Manojna Maddipatla
(Reuters) - Gilead Sciences Inc (NASDAQ:GILD) on Monday priced its COVID-19 antiviral remdesivir at $2,340 per patient for wealthier nations and agreed to send nearly all of its supply of the drug to the United States over the next three months.
The price tag is slightly below the range of $2,520 to $2,800 suggested last week by U.S. drug pricing research group the Institute for Clinical and Economic Review (ICER) after British researchers said they found that the cheap, widely available steroid dexamethasone significantly reduced mortality among severely ill COVID-19 patients.
Remdesivir is expected to be in high demand as one of the only treatments so far shown to alter the course of COVID-19. After the intravenously administered medicine helped shorten hospital recovery times in a clinical trial, it won emergency use authorization in the United States and full approval in Japan.
The drug is believed to be most effective in treating patients earlier in the course of disease than dexamethasone, which reduced deaths in patients requiring supportive oxygen and those on a ventilator. Still, remdesivir in its currently formulation, is only being used on patients sick enough to require hospitalization as a five-day treatment course.
The company is developing an inhaled version that could be used outside a hospital setting.
For U.S. patients with commercial insurance, Gilead said it will charge $3,120 per course, or $520 per vial. That is a 33% increase over the $390 per vial Gilead said it will charge governments of developed countries and U.S. patients in government healthcare programs.
'OUTRAGEOUS PRICE FOR A VERY MODEST DRUG'
In an open letter, Gilead Chief Executive Daniel O'Day said the price is well below the value it provides given that early hospital discharges could save around $12,000 per patient in the United States.
Patient advocates have argued that the cost should be lower since remdesivir was developed with financial support from the U.S. government.
U.S. Representative Lloyd Doggett, a Democrat from Texas, said it was "an outrageous price for a very modest drug, which taxpayer funding saved from a scrap heap of failures."
Remdesivir had previously failed as an Ebola treatment and has not shown that it can reduce COVID-19 deaths.
Gilead also said it agreed to continue to send most of its supply of remdesivir to the U.S. Department of Health and Human Services (HHS), with the agency and states set to manage allocation to U.S. hospitals until the end of September.
There are currently more cases of COVID-19 in the United States than in Europe, with several U.S. states hitting new records for numbers of cases.
HHS has been distributing the drug since May and was due to run out after this week. A senior HHS official said the agency expects the drug will soon be a scarce resource, and so it wanted to remain involved in allocating it.
The agency said it secured more than 500,000 remdesivir courses for U.S. hospitals through September. That represents all of Gilead's projected production for July and 90% of its production in August and September, in addition to an allocation for clinical trials, HHS said.
Once supplies are less constrained, HHS will stop managing the allocation, Gilead said. The company did not discuss its supply strategy for developed nations outside the United States.
Remdesivir's price has been a topic of intense debate. Experts have said Gilead would need to avoid appearing to take advantage of a health crisis for profits.
Gilead shares were about flat on Monday.
Analysts at Royal Bank of Canada forecast the drug could generate $2.3 billion in revenue 2020, helping offset more than $1 billion in development and distribution costs. They said additional profits could be limited because vaccines and better treatments are on the horizon.
The European Union's healthcare regulator last week recommended conditional approval of the drug when used in the critically ill.
Gilead has linked up with generic drugmakers based in India and Pakistan, including Cipla Ltd and Hetero Labs Ltd, to make and supply remdesivir in 127 developing countries.
Cipla's version is priced at less than 5,000 Indian rupees ($66.24), while Hetero Lab's version is priced at 5,400 rupees ($71.54).