Gilead's remdesivir pricing could set a disruptive industry precedent

Gilead's choice to make less money off its COVID-19 drug remdesivir to ensure more equitable access is a move that could lead to messy consequences in the pharmaceutical industry, according to STAT.

Remdesivir's five-day course price is $2,340, which Gilead CEO Daniel O'Day said is significantly below its actual value. In an open letter, he explained that the drugmaker was pricing the drug differently than it would other treatments due to the severity of the pandemic.

However, this choice is drawing criticism from activists. Gilead has previously prioritized profitability over access for its drugs that treat HIV, hepatitis C and influenza — all viruses that produce dismal public health outcomes.

"Dare I ask, why is a COVID patient's life more valuable than a person living with HIV or hepatitis C virus — diseases that primarily impact marginalized populations?" activist James Krellenstein asked in a statement he provided to STAT.

Gilead's pricing strategy is also eliciting outcry from industry experts worried the drugmaker may be setting a radical precedent. When calculating its remdesivir price, Gilead looked solely at the hospitalization costs the drug would save, rather than assessing the drug's overall value to society.

"This will change all future expectations for the treatment of this disease and may also influence pricing in other diseases," Wall Street analyst Geoffrey Porges told STAT. "The pharmaceutical industry faces a major adjustment if all product pricing was adjusted to a percentage of medical cost saved rather than a percentage of overall society value provided. The former could be only a fraction of the latter."

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Pfizer sues HHS over Medicare rules

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