NEW YORK • Remdesivir, the first drug shown to be effective against the coronavirus, will be distributed under an unusual agreement with the US federal government that establishes non-negotiable prices and prioritises American patients, health officials announced on Monday.
The arrangement may serve as a template for the distribution of new treatments and vaccines as the pandemic swells, said Professor Ernst Berndt, a retired health economist at the Massachusetts Institute of Technology Sloan School of Management.
Remdesivir will be sold for US$520 (S$725) per vial, or US$3,120 per treatment course, to hospitals for treatment of patients with private insurance, according to the Department of Health and Human Services (HHS) and Gilead Sciences, the drug's manufacturer.
The price will be set at US$390 per vial, or US$2,340 (S$3,269) per treatment course, for patients on government-sponsored insurance and those in other countries with national healthcare systems.
The drug will be sold only in the United States through September, meaning US patients will receive almost the entirety of Gilead's output, more than 500,000 treatment courses.
HHS and state health departments have been allocating the drug to hospitals nationwide based on need. After September, they will no longer have a role in determining where the drug is sent.
"This is a US-first policy," said Dr Rena Conti, a healthcare economist at Boston University.
"Access is guaranteed to the US, but worldwide demand could potentially outstrip supplies.
"I am unaware of any other policy except perhaps in bioterrorism drugs where there might be country-specific supplies," she added.
Remdesivir is so far the only treatment shown to speed recovery time in severely ill coronavirus patients. A large clinical trial, sponsored by the National Institutes of Health, found that the drug modestly shortened recovery time by four days, on average, but did not reduce fatalities.
The drug's eventual cost has always been uncertain.
"There is no playbook for how to price a new medicine in a pandemic," said Mr Daniel O'Day, chief executive of Gilead.
Since the drug's emergency authorisation, Gilead has donated Remdesivir to hospitals for treatment of patients with Covid-19, the illness caused by the coro-navirus. The last shipments of donated drugs were distributed on Monday.
The new pricing is not exorbitant, many experts said. Other promising drugs now in late-stage testing are already on the market for other purposes, Dr Conti said, and cost several times more than Remdesivir.
The Institute for Clinical and Economic Review, a non-profit group that calculates fair prices for drugs, estimated that Gilead would need to charge US$1,600 per regimen to recoup its costs. But as much as US$5,080 per treatment course would still be a cost-effective price for insurers, given that patients would be able to leave the hospital sooner.