On 1 May 2020, the FDA issued emergency use authorization (EUA) for remdesivir to treat hospitalized patients with severe covid-19. [1] The EUA was based on an analysis of preliminary data from the Adaptive covid-19 Treatment Trial (ACTT), a placebo-controlled randomized trial of 1063 patients, sponsored by the National Institute of Allergy and Infectious Diseases (NIAID) and results from an open-label dosing duration trial sponsored by Gilead. 

The preliminary analysis and trial results have been published in the New England Journal of Medicine, however these initial findings should be interpreted with extreme caution. [2] NIAID Director Anthony S. Fauci compared remdesivir to the first antiretroviral drug azidothymidine (AZT), which had modest benefits and whose clinical utility was debated for years as different studies offered conflicting information on its impact on survival in patients with HIV.

Since the effectiveness of remdesivir has not yet been fully established, it is not a given that remdesivir will work. Further information is required from ongoing trials, but use of remdesivir is gathering momentum ahead of the evidence. Until other therapies are approved, demand for remdesivir is likely to be high, particularly if the drug’s authorized indications are expanded to cover patients with milder disease. [3-5] This raises important questions about access around the world, which will be influenced both by the price of remdesivir and Gilead’s ability to manufacture an adequate supply. 

If remdesivir is officially approved by regulators, Gilead will be free to set the price of the drug in any country where it holds patents or other regulatory exclusivities, which enable the company to block competitive production by other manufacturers, as long as there are not comprehensive price control measures in place—as is the case in most low and middle income countries, and in the United States. Gilead has patents for the molecule and certain uses of the drug in the United States, and also holds important patents in other key jurisdictions such as the European Union, India, and China. Gilead has not announced a launch price for remdesivir, but its launch prices for other products, such as its hepatitis C medicine, sofosbuvir ($84,000), have been among the highest in the world.

The Institute for Clinical and Economic Review (ICER), presented three pricing models for remdesivir in the US market: $10 for a 10-day treatment course if the drug is priced “at cost,” or, using a cost-effectiveness model with a willingness to pay threshold of $50,000, $390 if there is no mortality benefit, or $4,500 if there is a mortality benefit. [6]  

ICER’s estimated “at cost” price, it should be noted, does not explicitly incorporate R&D costs. As ICER noted, the drug was synthesized initially as part of Gilead’s hepatitis C drug program, which through the development of sofosbuvir and follow-on medicines, has already been well-rewarded, with over $50 billion in sales during the first five years after market entry. Additionally, there has been very substantial public investment in both clinical and pre-clinical studies on the safety and efficacy of remdesivir. These include tens of millions of dollars in research funding from the NIH and other government sources, and involvement so substantial that some patent law experts have concluded that the US government is possibly a legal co-inventor of the remdesivir compound itself and of some methods for its use. [7] Significant funding also came from global sources, including the World Health Organization. [8] In addition, prior to covid-19, the NIH spent $700 million on coronavirus research. [9] Without these public investments, which occurred at the riskiest stages of development, and which are supporting the most important randomized trials, Gilead would not be in a position to market remdesivir today.

The price Gilead chooses for remdesivir may also shape the price of the next generation of medicines within the same treatment class, because introductory prices often create anchoring effects. The example of AZT is instructive: Burroughs-Wellcome priced the first drug for HIV at $8,000 (~$16,600, adjusted for CPI) a year and was then said to be “the most expensive prescription drug in history,” according to the NY Times. The decision by the company set off a firestorm of protests, including the earliest demonstrations by the activist group, the AIDS Coalition to Unleash Power (ACT UP). Subsequently introduced antiretroviral drugs, including many critical medications still widely used today, have only continued to be priced at ever higher levels.

Given the extremely high levels of public scrutiny during this pandemic, Gilead may diverge from its usual approaches, and price remdesivir close to the cost of manufacture. [4] Gilead’s efforts to date offer some promise: the company has committed to donate 1.5 million doses (940,000 doses allocated for the US government), responded to compassionate use requests and taken steps to scale up manufacturing capacity for a drug formally not yet approved in any jurisdiction. An early access scheme allows remdesivir to be available for unlicensed use in selected patients with covid-19 in the UK. [10] However, given expected high levels of demand and the history of Gilead’s pricing practices, there is a possibility that the company will price the drug at more than what ICER has concluded is justified.

In higher-income countries, until more robust mortality data becomes available, existing evidence suggests that a price between “at cost” ($10) and the lower of ICER’s cost-effective estimates ($390) is appropriate. Remdesivir enjoyed copious public sector support for R&D, including at risky and late stages of development, and Gilead has already profited handsomely from other drugs in the portfolio that led to its synthesis. While Gilead invested some unknown amount in R&D, it has conducted none of the most valuable clinical trials. At a price of $390, Gilead could easily still recoup hundreds of millions of dollars. A higher price cannot be justified without both further evidence of efficacy, and evidence of specific R&D outlays by the company. 

Even if remdesivir demonstrates a survival benefit (currently unproven), a price at the higher range of ICER’s estimates may still be unjustified as it may impede access, and risks overcompensating the company, given its comparatively modest R&D expenditures. This reflects a principled approach to pricing that protects both incentives and access: companies should be rewarded for innovation, access should be as universal as possible, and the public should not pay twice for medicines. 

Governments in low and middle income countries, in addition, can justifiably ask Gilead to charge no more than the cost of manufacturing—$10 per course of treatment. Such countries are a small part of the world’s pharmaceutical markets, and so are not central to R&D incentives. High prices inhibit access in these settings particularly acutely. 

Gilead should also be encouraged to license remdesivir to generic manufacturers to ensure consistent global supply and affordability for people living in poorer countries. Gilead has done this previously for their HCV drugs, predominantly in low income settings. Here, the company should include middle-income countries as well, given the seriousness of the pandemic and the evidence on R&D outlays.  

If Gilead refuses to take these steps, or ensure an adequate supply, governments can also take action of their own. International law permits the overriding of patents, for example, to enable competitive supply of medicines, with a royalty paid to the patent holding company. Several countries, including Israel, Canada, and Germany took steps, after the covid-19 outbreak, to better enable such measures for pandemic therapies or vaccines.

Confirmation of the early results from NIAID’s trial of remdesivir would represent a modest, but important step forward for science and public health. The public sectors around the world invested heavily in remdesivir and if the drug is established to be effective, it should be made available at a reasonable, evidence-based price. We cannot allow history to repeat itself, from AZT to sofosbuvir, with people unable to access a critical medicine; the first in what may be a generation of antiviral drugs used to treat global pandemic infections.

Jing Luo, Division of General Internal Medicine, University of Pittsburgh School of Medicine

Gregg Gonsalves, Department of Epidemiology of Microbial Diseases, Yale School of Public Health and Public Health Modeling Unit, Yale School of Public Health

Amy Kapczynski, Yale Law School

Competing interests: None declared

Funding: Research reported in this publication was supported by the National Center For Advancing Translational Sciences of the National Institutes of Health under Award Number KL2TR001856. The content is solely the responsibility of the authors and does not necessarily represent the official views of the National Institutes of Health.

References:

1. FDA. Remdesivir EUA Letter of Authorization, 2020.
2. Beigel JH, Tomashek KM, Dodd LE, Mehta AK, Zingman BS, Kalil AC, et al. Remdesivir for the Treatment of Covid-19—Preliminary Report. New England Journal of Medicine 2020.
3. Bauchner H, Fontanarosa PB. Randomized Clinical Trials and COVID-19: Managing Expectations. JAMA 2020.
4. Langreth R. Gilead Falls as Drug Has Only Small Benefit in Large Trial. Bloomberg Business 2020 June 1, 2020.
5. Kalil AC. Treating COVID-19—off-label drug use, compassionate use, and randomized clinical trials during pandemics. JAMA 2020.
6. Hill A, Wang J, Levi J, Heath K, Fortunak J. Minimum costs to manufacture new treatments for COVID-19. Journal of Virus Eradication 2020:6.
7. Warren TK, Jordan R, Lo MK, Ray AS, Mackman RL, Soloveva V, et al. Therapeutic efficacy of the small molecule GS-5734 against Ebola virus in rhesus monkeys. Nature 2016;531(7594):381-85.
8. Sayburn A. Covid-19: trials of four potential treatments to generate “robust data” of what works: British Medical Journal Publishing Group, 2020.
9. Silverman E. Lawmakers ask HHS to ensure Gilead’s remdesivir is affordable if U.S. taxpayers funded R&D. STAT 2020 May 1, 2020.
10. Kmietowicz Z. Covid-19: Selected NHS patients will be treated with remdesivir. BMJ 2020;369:m2097.