This announcement was made as Gilead plans to start charging for the drug in July. CNBC reports that, up to this point, the company had been donating the drug to be distributed by the U.S. government, after being authorized for emergency use in May.
As for how this new (going to guess unwelcome) pricing structure will break down, that will work like so. Through an open letter, Gilead says it will sell vials for $390 to governments "of developed countries" worldwide. The price for private U.S. insurance companies will amount to $520 per vial, though people on government programs such as Medicare will get lower prices compared to those using private insurance.
Note that the $520 price tag for the average patient gets to $3,120 when you multiply it by six, because that's the amount of vials a typical patient will need for a five-day treatment program. If necessary, a longer (10-day/11-vial) program may be needed, which could bring the costs for some patients up to $5,720.
“Whether you’re covered by a private insurer, whether you’re covered by a government insurer, whether you’re uninsured with COVID-19, there will not be an issue for access with remdesivir,” said Gilead CEO Daniel O'Day in a Monday interview on CNBC that followed the announcement.
A senior official working for the Department of Health and Human Services told reporters during a conference call that uninsured people will be covered due to provisions in the CARES Act. That official went on to say people who are privately insured will have their out-of-pocket costs determined by their plans.
O'Day justified the pricing to CNBC by saying it will ensure those who need to be able to get the treatment will be able to get it. He further stated that the company came up with the $390-per-vial tag by keeping in mind the developed countries with the lowest purchasing power, and said it was necessary to prevent negotiations which could slow down the process of distributing the drug.
O'Day said Gilead has also been working with generic manufacturers so it could sell the drug to developing nations at a cost that is "substantially lower."
At the moment there are no Food and Drug Administration-approved treatments for the coronavirus, though scientists have claimed remdesivir has shown some success in shortening the recovery times for those who are severely ill (note that "severely ill" part, as you don't really want to get to the point where you'll be treated with the stuff).
Gilead says the $390-per-vial price is "well below" the value of the drug, which it says has the potential to reduce hospital costs and keep a slightly higher percentage of people alive. The company says hospitals can save about $12,000 per patient because of earlier discharges. Studies from clinical trials in April show that patients who took the drug ended up recovering around four days faster than their contemporaries who didn't take it.
In addition to giving people an indication as to just how much money they'll be out if they get sick (and also, you know, actually survive) coming up with a price for remdesivir was important in the sense that it may set the standard for similar medications deemed effective for treating COVID.
Later on Monday, HHS said it had secured more than 500,000 treatment courses of remdesivir, and that it will give them to hospitals based on their volume of coronavirus-sickened patients through September.
CNBC reports that Gilead continues to research the drug in an effort to learn how it may be utilized to better treat those infected. Last week the company announced a plan to begin human trials for an inhaled version. Simultaneously it's ramping up production of the current drug to keep up with demand. Gilead predicts that by the end of 2020 it will have put more than $1 billion into research/production.