Start at the bottom. The marginal cost of producing remdesivir is probably less than $600, according to the Institute for Clinical and Economic Review, an independent non-profit. But companies must spend heavily to research and develop drugs. Factor in Gilead’s development expenses for 2020 and the cost rises to $1,600.
Drugs come with many other costs too, including the need to subsidize products that failed in development. The Tufts Center for the Study of Drug Development estimated in 2014 the average new drug costs about $2.6 billion to develop, all in. If pharma companies keep 40% of their revenue as profit, Gilead would have to sell roughly 3 million courses of remdesivir to cover its costs at that $2,300 price.
An alternative question is not what it costs, but what it’s worth. The drug has been shown to help severely ill patients recover four days faster. Gilead Chief Executive Daniel O’Day says four days in a U.S. hospital costs about $12,000. The real upper limit to what the market could bear for remdesivir might be even higher, since there are no proven alternatives, and Covid-19 has the potential to overwhelm intensive care units.
Gilead is wise not to test that limit. U.S. healthcare costs are already inflated, and charging what people might pay would create a political minefield. A majority of American voters said healthcare costs were one of the most important issues during the 2018 midterm elections, according to pollster KFF. Ahead of November’s presidential election, the $94 billion pharma group’s restraint may help it accumulate political capital. Prevention is better than cure.
Breakingviews rob_cyran Ripping off the world...thanks Bill Gates 🤬🤬🤬🤮
Breakingviews rob_cyran I wonder how much Gilead paid for this report?
Breakingviews rob_cyran For Profit HealthCare Is Killing Us! BlackLivesMatter
Breakingviews rob_cyran
Breakingviews rob_cyran Can be made for $9 per course.
Breakingviews rob_cyran This drug is useful only in 2 circumstances due to its ability to shorten the recovery time. The first is when the hospital beds are almost overwhelmed it gives the hospital the ability to decrease preasure on the service. The second is when it is administered massively to all...
Breakingviews rob_cyran So sad !
Breakingviews rob_cyran $0
Breakingviews rob_cyran WON'T SOMEONE THINK OF THE PROFIT MARGINS
Breakingviews rob_cyran 'why it didn't choose a higher price'
Breakingviews rob_cyran I've an idea. Why don't they issue the vaccine, and the rest of us won't tear their fucking homes to pieces?
Gilead sets Covid -19 drug candidate remdesivir price at $390 per vial.