The Disgusting and Demented Logic and Lies on the Pricing of Remdesivir

Executive Summary

• Enormous lies were told to justify the predatory pricing of Remdesivir.
• We cover the erroneous logic put forward.

Introduction

Some ludicrous logic was put forward to justify the price on Remdesivir. This ridiculous logic was put forward not only by the drug maker but also by Wall Street analysts.

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The following quotes are from an article published at NPR

The drugmaker behind the experimental COVID-19 treatment remdesivir has announced how much it will charge for the drug, after months of speculation as the company tried to figure out how to balance profit and public health needs in the middle of a pandemic.

In the United States, Gilead Sciences will charge $520 per vial for patients with private insurance, with some government programs getting a lower price. With a double-dose the first day, that comes out to $3,120 for the five-day treatment course. For governments in developed countries outside the U.S., it will cost $390 per vial, or $2,340 for the five-day course. How much uninsured patients would pay is still unclear.

“At the level we have priced remdesivir and with government programs in place, along with additional Gilead assistance as needed, we believe all patients will have access,” Gilead CEO Daniel O’Day said in an open letter posted Monday morning.

Since then, reaction to the price has been mixed.

Some advocacy organizations and members of Congress say Gilead is taking advantage of Americans during a pandemic.

Rep. Lloyd Doggett, D-Texas, called the price “outrageous.”

“Without a taxpayer investment of $99 million, this drug would have been abandoned. It would be on the scrap heap of failures,” he tells NPR. “So it’s the taxpayer who’s really taking the risk here and ought to get the reward of the angel investors that taxpayers are.”

Public Citizen, a nonprofit consumer advocacy group, echoed his remarks with a similar sentiment.

“In an offensive display of hubris and disregard for the public, Gilead has priced at several thousand dollars a drug that should be in the public domain,” Peter Maybarduk, director of Public Citizen’s Access to Medicines Program said in a written statement.

(In a quarterly financial filing, Gilead said its investment in remdesivir for 2020 alone “could be up to $1 billion or more,” much of that money used to scale up manufacturing capacity.) – NPR

That is very unlikely and is an exaggeration. The government could have contracted to manufacture Remdesivir at a far lower cost than this. The drug’s development was funded not by Gilead but by the US government.

Wall Street Analysts Demand Extraordinary Price Gouging

The quote continues…

Still, analysts expected Gilead to set a higher price than the company did.

Geoffrey Porges, an analyst at the investment bank SVB Leerink, said the announced price for the drug offers a “spectacularly good value.”

“It’s unprecedented to price the drug below the medical costs that it’s saving,” Porges said, adding that remdesivir could save up to $40,000 per patient, if it prevents a COVID-19 patient from needing the ICU. And there’s even more value that’s not built into Gilead’s price, he says.

“That ignores the enormous societal value that everybody else gets from making a patient less infectious, for getting a patient back into the community, for getting them back to work sooner,” Porges said. “All of those societal benefits aren’t even considered in this price.”

This shows the orientation of all Wall Street analysts. Unless extraordinary price gouging is performed, Wall Street analysts are disappointed. At $3120 per dose for something Gilead did not develop is price gouging, but not sufficient price gouging for Wall Street analysts.

As I will show later in the article, the estimated benefit of Remdesivir is most likely negative. This Wall Street analyst has no idea what they are talking about.

The quote continues…

The Institute for Clinical and Economic Review, or ICER, an influential nonprofit that analyzes drug pricing, said Gilead showed “restraint” and set a “responsible” price.

That said, ICER President Steven Pearson noted that this reasoning assumes remdesivir will eventually be shown to improve COVID-19 survival — something research hasn’t yet proven.

A federally funded study by the National Institute of Allergy and Infectious Diseases published at the end of April indicated that remdesivir can shorten COVID-19 patients’ hospital stays by about four days. But it’s unclear whether the drug also improves survival.

“If further data do not show a clear mortality benefit for remdesivir, then the price of the drug should be dramatically reduced,” Pearson said in his written statement.

Why is the drug being priced at the level of its benefit? Why not price the medicine at the cost of development and manufacturing?

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The drug price will send a message to companies working on other treatments, vaccines and cures for COVID-19. They have been watching remdesivir closely to find out what kind of reward they might expect for their investments, should their own treatments pan out.

The problem with this logic is that Remdesivir had its clinical trials rigged by the NIH to make it appear more effective and hide the side effects. This drug is ridiculously priced, and the logic presented here that other drug manufacturers need to see that Gilead receives absurd unearned profit margins for faking clinical trials to become motivated.