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Gilead's breakthrough coronavirus drug sparks concerns over how much it'll cost

Anjalee Khemlani
·Senior Reporter
·3 min read
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With Gilead Science’s (GILD) anti-coronavirus drug now available for hospitalized patients and getting emergency use approval from the U.S. Food and Drug Administration Friday, expectations for related treatments are growing.

Yet exactly what those treatments will cost — for both health insurers and out-of-pocket for patients— remains to be seen. The subject of drug prices has been a political hot potato for years, and the COVID-19 crisis is putting new pressure on big pharma to contain price inflation related to potential treatments and vaccines.

The price question is set to take on increasing prominence as new trials show effectiveness, and officials hint at green-lighting more to contain fatalities. Anthony Fauci, the director of the National Institute of Allergy and Infectious Diseases, and a White House coronavirus task force member, said Gilead’s success has opened the door for similar treatments.

Roche (RHHBY), which has been one of the top testing providers throughout the outbreak, is also working on repurposing a rheumatoid arthritis drug that could compliment the treatment of Gilead’s remdisivir. The drug, Actemra, is already approved by the FDA and on the market.

Roche is working to ramp up production in order to meet the potential demand if it is proven effective. Already, the company has seen a 30% increase in sales of the drug in the first quarter, according to CEO Severin Schwan, and the company has donated 10,000 vials to the national stockpile.

Amid rising fears that consumers could be priced out of the market for treatment, Schwan told Yahoo Finance Monday that Roche intends to ensure that “access is not a hurdle” for patients globally.

With clinical trials set to provide results as early as June, Schwan added that Actemra is currently priced to consider repeated doses for rheumatoid arthritis, compared to only dose being tested to treat coronavirus.

“So this, in itself will limit the financial burden for societies,” he said. “We will see how the clinical trials read out, how much the demand as a result of that will be, and then we will at any rate make sure this medicine is broadly available for patients in need.”

The New York metro area accounts for roughly 1/6 of the U.S. total. (Graphic: David Foster/Yahoo Finance)
The New York metro area accounts for roughly 1/6 of the U.S. total. (Graphic: David Foster/Yahoo Finance)

Medicare rates show a payment limit of $5 per milligram of the drug. The clinical trial shows patients are being tested with doses that depend on a person’s weight (in kilograms), with a maximum dose of 800 mg. Meanwhile, a previous National Institute of Health study reported the annual cost of 8mg/kg at $17,472.

Gilead has yet to name a price for its treatment after donating 1.5 million doses to the national stockpile, but a recent report attempted to calculate a reasonable estimate — yet the amount floated was anything but. A study by the Institute for Clinical and Economic Review suggested a ceiling price of $4,500 per treatment course — assuming 10 days—for remdesivir.

The report considered that R&D costs for the drug would already have been reclaimed in Gilead’s antivirals that have made it to market, and would not need to be included in the pricing considerations.

Given political sensitivities around pricing, Gilead CEO Daniel O’Day said he has already seen an improvement in sentiment among lawmakers, while Schwan insisted the coronavirus crisis gives the industry an opportunity to prove its value to the public.