Gilead Sciences just announced it will charge $3,120 for a full course of Remdesivir, the first new FDA-approved treatment for COVID-19. Some kneejerk members of Congress like Lloyd Doggett (D-Texas) immediately condemned that price tag as "outrageous." The Institute for Clinical and Economic Review, a left-leaning nonprofit that releases its own recommendations of "fair" drug prices, claimed that Gilead could afford to price Remdesivir as low as $10 per course of treatment -- the cost of the raw ingredients used to make the drug.
Ignorance is not bliss. These critics could not be more misinformed. Gilead priced Remdesivir lower than the drug's actual value. And while it's no silver bullet, it's currently our best hope of saving hospitalized patients and reducing strain on our hospitals -- a particularly important goal in light of the surging case counts in many states.
Remdesivir isn't a vaccine. It prevents the virus from replicating within the body. In a Phase III clinical trial, patients who received Remdesivir recovered 31 percent faster from COVID-19 than those who did not, a decrease from 15 days to 11 days.
Of course, developing Remdesivir was not easy or inexpensive. By the end of 2020, Gilead will have spent $1 billion doing so. The firm began development in 2009, originally intending to use the antiviral to treat Ebola. That enormous investment of time and money helps explain Gilead's price. Just like any business, it needs to recoup its investment costs.
Here's the real headline: Gilead did not even try to maximize its profits. According to Gilead CEO Daniel O'Day, drug companies normally price their treatments based on how much the medicines save healthcare and insurance providers. Reducing each patient's hospital stay by four days, on average, would save about $12,000. In other words, Gilead could have charged almost $9,000 more. They did not.
Gilead didn't merely leave profits on the table. The firm also provided Remdesivir's genetic marker to 127 developing countries, allowing foreign manufacturers to create generic versions for local use. In addition to directly healing patients, Remdesivir saves lives by shortening average recovery times, freeing up hospital beds and enabling doctors to treat other patients who might otherwise go without adequate care.
You don't have to be a math whiz to see the value there. Considering that Arizona, Florida, California, and other states continue to report record numbers of COVID-19 cases, keeping hospital beds open must be a top priority. Criticizing the price of the only effective treatment we currently have is misguided at best and ideologically deranged at worst.
Though by no means a cure, Remdesivir helps patients recover faster and eases pressure on hospitals. What is really "outrageous" are the bad-faith arguments from lawmakers who never pass up an opportunity to attack drug companies. Let's hope ordinary citizens can see who's really working to protect patients, and who's merely demagoguing.
Peter Pitts, a former FDA associate commissioner, is president of the Center for Medicine in the Public Interest, which is partially funded by pharmaceutical companies.