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| A lab technician holds COVID-19 treatment remdesivir at Eva Pharma Facility in Cairo, Egypt, on June 25. Reuters-Yonhap |
Criticism of Gilead compels Korean developers to cut prices
By Nam Hyun-woo
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| Gilead Sciences CEO Daniel O'Day / Captured from Gilead Sciences website |
Initially, Gilead said it set the price for remdesivir "far below" the drug's estimated market value, at least in the United States. An earlier discharge for COVID-19 patients would save hospitals about $12,000 per patient, Gilead said. The drug will probably cost Gilead $1 billion throughout this year, mostly to scale up production. Gilead is expected to generate over $525 million on remdesivir sales by the end of this year with further expectations it could soar to $2 billion by next year.
Regarding Gilead's pricing strategy, local drugmakers said the drug's price will be varied depending on the severity of each patient's condition, what the treatments are designed to treat, but there have been some debates over the drug's price tag as South Korean drug manufacturers are viewing the price as a "pressuring reference" they have to consider before launching their products.
Specifically, Gilead set a price for governments of developed countries of $390 per vial. Based on current treatment patterns, the vast majority of patients are expected to receive a five-day treatment course using six vials of remdesivir, which adds up to $2,340 per patient in the U.S.
The pricing, however, is raising some debate as Gilead's critics ― healthcare providers, insurance companies and even patient advocates ― said they were disappointed that remdesivir is "priced quite high" given its expected benefits.
Gilead appears to have avoided possible criticism in South Korea, as its Korean unit agreed with the government to donate the first batch of the drug for this month. Plus, the National Health Insurance Service and the government will fully cover the costs for those provided afterwards.
Local developers that include Celltrion, GC Pharma, Bukwang Pharm, SK Bioscience and a number of smaller biotechs, are scrambling over the best pricing strategy for possible COVID-19 treatments as they are considering the remdesivir case "a major reference" in pricing their products and it may compel them to avoid pricing products as desired.
"It is hard to know the logic behind remdesivir pricing, but I would say the recent controversy is showing COVID-19 treatment pricing is driven by something other than market logic," a domestic biotech official said asking not to be named. "For developers following Gilead Sciences, they could face a pressure that they should also consider the public welfare and social responsibilities in their pricing process."
Domestic COVID-19 treatment developers say it is "too early" to mention the prices of their products because most of them are yet to begin clinical trials, and the pricing will take place at the very last stage of the whole developing process. Thus, the market circumstance at then will play the most critical role in setting the price.
"Prices will vary depending on the severity of conditions, the developing methods of treatments and their originality," another pharmaceutical firm official here said. "Unless the product is a generic to remdesivir, direct price comparison could be difficult. However, it is hard to deny that there could be pressure from governments to keep treatment prices low, for the sake of the greater cause of overcoming the pandemic."
Profit or social responsibility?
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| Celltrion Chairman Seo Jung-jin / Yonhap |
As expected, leading local pharmaceutical companies are already on their way in assessing their development of possible COVID-19 treatments as a "social responsibility." Celltrion will begin clinical studies for its antiviral antibody treatment on July 16. The company said it plans to manufacture doses for 5 million people ― 1 million for domestic use and 4 million for exports ― in the first half of next year.
A Celltrion official said the company can "think of prices only after it confirms desired efficacy of the treatment in patients with differing severity of conditions," but added that "the company has already announced that it will put social responsibility ahead of profits," citing Celltrion Chairman Seo Jeong-jin's recent remarks.
In March, Seo said the company has earmarked 20 billion won for the development for its COVID-19 treatment, and stressed "the company will prioritize development speed rather than profitability."
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| GC Pharma CEO Huh Eun-chul |
A GC Pharma official said while it's premature to specifically talk about the estimated prices of the overseas project, debates will be needed with the alliance members, after making more progress in the project.
"With criticisms already taking some effect on drug makers, accusing their business activities of pandemic profiteering, COVID-19 treatment developers are facing a difficult task of juggling profit and social responsibility," another industry official said. "When their development of COVID-19 treatment advances to the late stage, they will contemplate how to price drugs more seriously."
