Determining the cost of a potentially life-saving medicine like remdesivir during a pandemic is a tricky balance. Gilead mostly got it right.
Pricing a new medicine aimed at taming a pandemic is one of the touchiest scenarios imaginable for a drug company. Set the price too high, and the world will assail you for price gouging. Too low, and you risk bleeding money and investors. No decision will ever make everyone happy, but Gilead Sciences Inc.’s price for its Covid-19 treatment remdesivir is a solid attempt.
According to details released by Gilead on Monday morning, a five-day course of remdesivir will cost about $2,340 in developed nations, including U. S. plans administered by the government. Private insurers will pay a steeper $3,120 in America. Developing nations will pay significantly less after Gilead in May decided to let generic drugmakers make a cheaper version of remdesivir for low-income nations that could cost as little as $600 a course.
The developed-world price will attract critics, and the price gap with generics will grate. However, it’s substantially lower than what Gilead could charge. Not maximizing profit in a pandemic is a low standard, but it’s a good sign that the first drugmaker to the finish line cleared it.
There’s no set formula for pricing medicines; drugmakers often charge what they think will be most profitable in different markets. A pandemic throws the usual priorities into disarray.
