The FDA has approved Remdesivir for emergency use and Gilead Science will denote its current 1.5 million vials, which could potentially treat 300 thousand patients as it takes 5 to 10 treatments per patient. The WHO wants more Remdesivir:
The World Health Organization said Monday that it will speak with the U.S. government and Gilead Sciences on how antiviral drug remdesivir could be made more widely available to treat Covid-19 as data of its effectiveness emerges.
At some point we will need to consider pricing. This report considers two approaches with the first being to price at the economic cost of production:
For remdesivir, we used evidence on the cost of producing the next course of therapy from an article by Hill et all in the Journal of Virus Eradication (2020). Their methods sought to determine the “minimum” costs of production by calculating the cost of active pharmaceutical ingredients, which is combined with costs of excipients, formulation, packaging and a small profit margin. Their analysis calculated a total cost of producing the “final finished product” of $9.32 US for a 10-day course of treatment. We rounded that amount up to $10 for a 10-day course. If a 5-day course of treatment becomes a recommended course of therapy, then the marginal cost would accordingly shrink to $5
. In other words, $1 per vial. The report also estimates a value based price known as Cost-Effectiveness Analysis:
In this preliminary modeling exercise, remdesivir extends life and improves quality of life versus standard of care. In public health emergencies, cost-effectiveness analysis thresholds are often scaled downward, and we feel the pricing estimate related to the threshold of $50,000 per incremental quality adjusted life year (and equal value of a life-year gained) is the most policy-relevant consideration. In the case of remdesivir, the initial ICER-COVID model suggests a price of approximately $4,500 per treatment course, whether that course is 10 or 5 days
In other words each patient would generate $4500 for the course of the treatments. Even if we assume 10 vials per patient, that comes to a price equal to $450 per vial. Someone call Dean Baker as he might want to write another one of his classic condemnations of the patent system. While I agree with the WHO on their call for an all hands on deck on getting this treatment produced and given to the patients who would benefit the most of this treatment, the policy debate over pricing should begin immediately.
From what I have read, remdesivir like HCL (ionophore which allows zinc, etc. to enter the cell) + zinc/2 or AZT or etc. is an inhibitor which combines/attaches with the Corona virus RNA disallowing it to replicate. “the way these enzyme works shows that it is efficient at picking up remdesivir in its active triphosphate form and building it into the growing RNA strand. When it is incorporated at position i, the chain stops forming three nucleotides later. In other words, when the coronavirus polymerase hooks up to the drug instead of the real nucleotides, it is inhibited three steps later. This phenomenon is called “delayed chain termination,” and could be the mechanism through which the drug operates.”
Again from my reading, remdesivir will slow or stop the virus from replicating allowing the body’s immunity capabilities to fight back rather than be overwhelmed by the virus. Time is of the essence in this process.
I am not sure of your pricing/patent discussion. If your point is remdesivir pricing will potentially be low, it is not exactly true. ICER’s price is a recommendation. Gilead can still price it higher or lower than what the ICER recommends. One case reaffirming this was Novartis’s kymriah which was priced (ICER – 4 points of quality which I have written about) at $1 million a dose (one time treatment) to which Novartis priced at $400,000 . . . pocket change (/s). In a recent study of the pricing of drugs; 100 drugs were selected, 23 were dropped and 9 of the 77 were selected for further pricing evaluation. Two were found to have enough documentation to justify pricing increases (needing further study) and the seven others were indicated as not having enough evidence to justify a price increase (I believe I pointed to this study for you and Robert). I know of no lowering of pricing for those 7 drugs and overall pharma continues it increasing of prices well beyond R&D, cost of production, fixed costs, and reasonable returns. In these cases, patents for 7 years, extensions to 12 years, and patents lengthened for new and improved such as EpiPen are still making a mockery of the process because they legally can do so. WHO established costs are recouped in 5 years by risk adjusted sales.
PGL, my thick head is not getting your point between patents and Dean Baker (I read some and could not find Dean’s beef). I hope my explanation here adds some value to your discussion. Others here may disagree with points, certain or in general, of my discussion also. Enough said . . .