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Consumer Confidential: Is Gilead ripping us off with a COVID-19 treatment topping $3,000?

David Lazarus, Los Angeles Times on

Published in Business News

"In normal circumstances, we would price a medicine according to the value it provides," the company's chief executive, Daniel O'Day, said in an "open letter" posted Monday.

He said faster hospital discharges resulting from treatment with remdesivir would result in "savings of approximately $12,000 per patient."

"We have decided to price remdesivir well below this value," O'Day said, adding that this will "ensure broad and equitable access at a time of urgent global need."

There are a few things wrong with this.

First, there's this bizarre argument that just because a drug may save money on hospitalization costs, a pharmaceutical company is entitled to pocket at least some of the difference.

That's like a car mechanic charging thousands of dollars to rotate your tires because, if you got into an accident due to wear and tear, your healthcare costs could be stratospheric, so don't complain.

 

Then there's the broader issue of pricing a drug relative to its "value" to society. In theory, there's no limit to the value of any drug that keeps you alive, so a drug company is entitled to charge as much as it wants.

Finally, and perhaps most important, you're not a passive bystander in this equation. You're an investor.

In developing remdesivir, Gilead received at least $70.5 million from taxpayers, according to the advocacy group Public Citizen, which reviewed regulatory filings related to the drug.

"Initially tested by Gilead as a hepatitis C treatment, remdesivir was refined, developed and evaluated by federal scientists for Ebola and coronaviruses," the group said.

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