California’s Gilead Sciences announced pricing on Monday for the first drug authorized to treat COVID-19 in the United States, and industry observers did not immediately pass out from sticker shock.
The price range for the drug remdesivir — $3,120 for commercially insured U.S. patients, and $2,340 for government programs here and abroad — was in the neighborhood of the pricing suggestions announced previously by the independent Institute for Clinical and Economic Review (ICER) in Boston.
“Gilead’s pricing announcement demonstrates restraint and a promising precedent for future drug pricing during a pandemic,” ICER President Dr. Steven Pearson said in a statement. “The price is largely in line with ICER’s independent assessment suggesting that a price of approximately $2,800 would be reasonable in proportion to the added benefits for patients and the cost offsets in the health system.”
He noted that under normal circumstances, the drug’s value to the medical system would have justified a much higher price, given that hospitalized COVID-19 patients discharged early after taking the intravenous drug would each save an average of $12,000 in hospital expenses.
Medicare pays about $23,000 for the average COVID-19 hospitalization, federal officials revealed last week.
Originally invented to fight viral outbreaks like Ebola, the drug received emergency-use authorization from the Food and Drug Administration on May 1 to treat hospitalized COVID-19 patients on supplemental oxygen. Donated vials of the drug are being distributed by the federal government until the end of September, Gilead said.
Remdesivir works by disrupting the viral reproduction process. A federally funded, randomized clinical trial (which included patients in Minnesota) found that people on oxygen hospitalized with COVID-19 were discharged after 11 days when treated with remdesivir vs. 15 days for those on a placebo, the study report in the New England Journal of Medicine said.
After some initial confusion on Monday, Gilead clarified that Medicare and Medicaid are not eligible for the lower price because they do not buy drugs directly. Instead, hospitals will buy the drugs at the higher commercial price and then be reimbursed by the Centers for Medicare and Medicaid Services under a “bundled payment” that lumps in services and supplies used in care.
Dr. Peter Bach, director of the Center for Health Policy and Outcomes at Memorial Sloan Cancer Center in New York, said Monday that the pricing question isn’t the most urgent issue surrounding the intravenous antiviral drug.
“The truth is, while I worry a lot about excessive pricing in the pharmaceutical sector and how it’s inefficient for society, I would have much preferred to wake up this morning to hear that Gilead had decided to launch the right trials of remdesivir,” Bach said.
Two big questions hovering over the drug are whether it improves patient survival and whether its benefits are as pronounced when used in combination with a corticosteroid drug called dexamethasone, which is now recommended for many hospitalized patients with severe effects of COVID-19.
The trial that led to FDA authorization of remdesivir found 7.1% mortality among remdesivir patients and 11.9% among the placebo group. But the 1,063-person study was stopped early, and the mortality result was not statistically significant. It only tested remdesivir.
ICER’s suggested price for remdesivir of $2,800 takes into account the recently discovered benefits of dexamethasone, which is widely available in the U.S. already and is likely to be prescribed to the same patients. Without the steroid drug, benefits created by remdesivir alone would be worth closer to $5,000, ICER said earlier.
Bach and ICER urged additional trials to study the mortality benefits of remdesivir.
“The responsible pricing decision today for remdesivir must be reassessed, and the price allowed to move — up or down — based on our future learning about the drug’s effectiveness,” ICER recommended. “If further data do not show a clear mortality benefit for remdesivir, then the price of the drug should be dramatically reduced.”