The Raid on Remdesivir: Politicians want to confiscate a treatment saving Covid patients

WSJ editorial. Excerpt:

"HHS on June 29 struck a deal with Gilead that gives the U.S. 100% of Gilead’s projected production for July (94,200 treatment courses) and 90% in August and September (407,700 courses). Under the agreement, the U.S. government will pay $2,340 per course—the same price as other developed countries—but the U.S. will get treatments months earlier.

Private insurers pay hospitals bundled rates for in-patient treatments, and Gilead has set the hospital wholesale rate at $3,250 a course. The Institute for Clinical and Economic Review (ICER), a nonprofit often cited by liberals who say drug prices are too high, praised Gilead’s “responsible pricing decision.” ICER’s June review suggested that the drug’s clinical benefits would merit a price of between $4,580 and $5,080 per treatment course and between $2,520 and $2,800 after accounting for potential benefits from the steroid dexamethasone, which an Oxford trial showed significantly reduced mortality in severely ill patients.

Yet Senate Democrats say that even though the U.S. government will pay the same price as foreign countries, privately insured Americans will pay $860 more through higher premiums. Never mind that by shortening hospital stays, remdesivir will save insurers, hospitals and patients thousands of dollars per case. Hospitals on average spend $2,500 per in-patient day.

Gilead has explained that private insurers will pay more because of regulations that require drug makers to give government programs a hefty discount off the wholesale price. These mandatory government discounts are one reason for the nominally high list prices that some drug makers charge but relatively few people actually pay.

The Senators also demand that HHS invoke “legal provisions that allow it to assert control over the production and distribution of remdesivir” because taxpayers “furnished over $70 million in research costs for the drug.” They want the government to seize patents for drugs that result in part “from publicly-funded R&D” and license them to “a generic manufacturer for production at a lower cost.”

Hold on there. Gilead discovered and developed remdesivir more than a decade ago while exploring potential treatment for Hepatitis C and respiratory syncytial virus. While the drug didn’t work against these viruses, the National Institutes of Health has since helped fund in vitro and mouse studies of remdesivir’s efficacy against emerging viruses including Ebola, MERS, SARS and now Covid-19.

NIH typically finances studies of vaccines and treatments for infectious diseases because the success rate is low. Only a third of vaccines and a quarter of treatments for infectious diseases that enter Phase 1 trials are approved. Many beneficiaries are in developing countries where drug makers won’t recoup their research and development costs.

Gilead has already licensed remdesivir to five generic manufacturers at no cost to make and sell in 127 developing countries. It didn’t have to do this. Gilead expects its development and manufacturing costs by the end of the year to exceed $1 billion, including exploring an inhaled formulation that would let patients be treated outside hospitals."