Controversy Over Pricing of COVID-19 Treatment 'Remdesivir'..."Profitable Even at $1"

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Hyunwoo Lee] Controversy over the pricing of 'Remdesivir,' the novel coronavirus (COVID-19) treatment drug that the U.S. Food and Drug Administration (FDA) has granted emergency approval for, is intensifying. While the global pharmaceutical industry argues that the price should be set above $4,000 considering development costs, consumer protection groups are opposing high prices, stating that even if priced at $1, profits would remain due to mass production and sales volume.

According to Politico, a U.S. political news outlet, on the 6th (local time), there is considerable debate within the United States over the price of Remdesivir, a COVID-19 treatment drug. The Institute for Clinical and Economic Review (ICER), a drug price evaluation organization, estimated that the price of Remdesivir would be $4,500 (approximately 5.22 million KRW) assuming a 10-day treatment course. The calculation suggests that the price must exceed at least $4,000 to yield profits surpassing the $1 billion development costs incurred so far.

Wall Street in the U.S. expects the price to be set between $5,000 and $10,000, forecasting that the manufacturer, Gilead Sciences, will generate massive sales of $2 billion in 2021 and $3 billion each in 2022 and 2023. However, the consumer group Public Citizen argues that even if Remdesivir is priced at $1, the manufacturer would still make a profit due to large-scale sales, and therefore, high pricing should not be allowed.

For now, the manufacturer Gilead Sciences announced that it would donate 1.5 million vials of Remdesivir produced in May free of charge but has not disclosed plans regarding production, sales, or distribution thereafter. It only stated that it would produce enough to treat 1 million people within the year. If the drug is sold at a price exceeding $4,000 solely for profit, the company’s image could be severely damaged, and regulatory authorities such as the U.S. government might impose price and production controls.

Previously, Gilead Sciences faced criticism for producing a highly expensive hepatitis C treatment drug priced at $1,000 per pill, resulting in a treatment cost of $84,000 for a 12-week course per patient. This led to controversies over the fairness of pharmaceutical companies’ prescription drug pricing.

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