San Francisco Business Times: Gilead's drug pricing in the crosshairs again in wake of OK to use remdesivir against Covid-19

Gilead Sciences Inc. plans to spend $1 billion on its Covid-19 drug remdesivir. Now some members of Congress and health care watchdogs want to know how much consumers will pay.

In a letter Thursday to Health and Human Services director Alex Azar, Democratic Reps. Lloyd Doggett of Texas and Rose DeLauro of Connecticut asked for an "appropriate accounting" of taxpayer-backed research into the once-failed Ebola virus treatment that on Friday won Food and Drug Administration emergency use authorization to treat hospitalized Covid-19 patients.

The request is one of the first salvoes in the latest drug-pricing battle to face Foster City-based Gilead (NASDAQ: GILD). It comes after revelations that Gilead spent a company-record $2.45 million in the first quarter to lobby Congress and the White House.

"Taxpayers are often the angel investors in pharmaceutical research and development, yet this is not reflected in the prices they pay," Doggett and DeLauro wrote.

Covid-19 is far from Gilead's first tango regarding pricing for critically important drugs. Patient advocacy groups have slammed the company for the cost of its HIV-fighting drugs, which have extended the lives of AIDS patients and include the only two FDA-approved HIV prevention drugs, while insurers and other payers have criticized Gilead for its $1,000-a-pill hepatitis C drugs that were the first to essentially wipe out the underlying virus.

The Institute for Clinical and Economic Review said Friday that its models suggest a price of $4,500 per treatment course of five or 10 days. At that price, analysts at investment bank Piper Sandler, according to Bloomberg, said remdesivir could produce $2 billion in revenue for Gilead.

The legislators' letter asks that Health and Human Services account for grants to academic institutions that conducted research on remdesivir, research and development by the National Institutes of health and other federal agencies, clinical trials conducted or financially supported by the federal government, a list of patents and patent applications the federal government owns or had licensed for remdesivir and any federal costs to retrofit or build new Gilead facilities to scale up production capacity of remdesivir.

An "unaffordable drug is completely ineffective," they wrote.

Drug pricing has been an ongoing hot-button issue, with neither Democrat or Republic proposals taming higher out-of-pocket costs for consumers. The Covid-19 pandemic had chilled the political talk, even in an election year, but that looks to be changing with remdesivir's emergency use authorization.

Gilead has pledged to donate 1.5 million vials of remdesivir — enough supply through early summer, said Chairman and CEO Daniel O'Day — for ongoing clinical trials, for compassionate use by the most-severe Covid-19 patients in hospitals and for patients in other countries.

Securing an emergency use authorization for remdesivir before full approval by the FDA, O'Day told analysts last week, "allows us to address the humanitarian need while still pursuing normal approval."

"There is no guidebook out there, there is no rule book out there, other than that we need to be very thoughtful about how we can make sure we provide access of our medicines to patients around the globe and do that in a sustainable way for the company, for you as shareholders, and we acknowledge that," O'Day said.

O'Day said Gilead is exploring ways to spread out remdesivir's manufacturing and produce the drug as quickly as possible to treat more than 1 million patients by the end of the year.

Gilead Chief Financial Officer Andrew Dickinson put the company's investment in Covid-19 at up to $1 billion.

On Thursday, watchdog Public Citizen noted that remdesivir must be "reasonably priced" to prevent rationing of treatment for severe Covid-19 patients and to relieve stress on public health care budgets.

"Gilead's vague assurances are not enough," the group said, adding that the U.S. government should license Gilead's patents and Congress should enact "reasonable" pricing legislation. "This is the company that gave us the $1,000 pill. Remdesivir has benefiited at every stage from taxpayer funding, totaling a minimum of $60 million."

The trial that was the basis of Friday's FDA emergency use authorization was run by the National Institute of Allergy and Infectious Diseases. Gilead also has undertaken studies of its own, including one that read out Thursday that saw negligible differences in improvement by Covid-19 patients treated over five days, compared to those treated 10 days — which ultimately could save payers money.

"I don't think there's a precedent for this," O'Day said. "We know the responsibility we have to a bunch of different audiences. Rest assured, we understand our responsibility."