A California-based company is charging hundreds of dollars per vial for a drug it created that's shown promise against COVID-19.
Gilead Sciences announced Monday it will begin to charge for remdesivir in July, which it previously donated for free to the United States and other countries.
Gilead is charging $390 per dose, which would come to $2,340 per patient for a five-day course or $4,290 for a 10-day course.
The pricing decision was based on making sure developed countries could access remdesivir, Gilead CEO Daniel O'Day said in an open letter.
The company is using a two-tiered pricing system in America, charging the lower amount for the U.S. government but elevating the price per vial for private insurance companies.
"Because of the way the U.S. system is set up and the discounts that government healthcare programs expect, the price for U.S. private insurance companies, will be $520 per vial," O'Day said.
The Department of Health and Human Services (HHS), which has been helping distribute vials of remdesivir donated earlier this year, will continue to manage allocation to hospitals until the end of September, Gilead said. After that period of time, HHS won't manage allocation any longer.
The Trump administration said in a separate announcement Monday that HHS and Gilead came to an agreement that gives the U.S. government large supplies of remdesivir through September.
The department isn't purchasing the vials.
"HHS is merely guaranteeing allocation of more than 500,000 doses to the U.S. market at a price that would be no greater to the hospitals than the WAC," a senior HHS official told reporters in a phone call, referring to Gilead's Wholesale Acquisition Price.
The final donated doses were being shipped on Monday.
The agreement guarantees HHS more than 500,000 treatment courses, including all of Gilead's projected production for July and most of its production of August and September.
An average treatment course requires 6.25 vials, health officials said.
Hospitals will pay no more than $3,200 per course.
Based on the hospital burden for COVID-19, HHS has been allocating the drug to state and local health departments, which then distribute the drug to hospitals. In the new configuration, HHS plans to allocate the vials directly to hospitals in shipments done every two weeks.
“President Trump has struck an amazing deal to ensure Americans have access to the first authorized therapeutic for COVID-19,” Health Secretary Alex Azar said in a statement.
“To the extent possible, we want to ensure that any American patient who needs remdesivir can get it. The Trump administration is doing everything in our power to learn more about life-saving therapeutics for COVID-19 and secure access to these options for the American people.”