Our mission to help you navigate the new normal is fueled by subscribers. To enjoy unlimited access to our journalism, subscribe today.
Biotech giant Gilead announced a price for its COVID-19 treatment remdesivir on Monday: $390 per vial for most governments, but $520 per vial for private insurers in the U.S., and a lower figure for developing nations.
That amounts to $2,340 for a five-day treatment course in high-income nations (and more in America). But those top-line figures may not explain how much of the tab you’d actually have to pay. As with so many aspects of the U.S. medical system, the devil is in the details.
Remdesivir, an experimental treatment, has been promoted as a drug that can shorten hospital stays for patients with serious COVID cases. It’s by no means a coronavirus cure-all. But clinical evidence has indicated that it can shave days off a patient’s need to be in a hospital before being discharged, saving both patients and the health system money.
That dynamic, amidst a shortage of medical resources for patients (including for available hospital beds in hard-hit states) led to an emergency authorization for remdesivir use by the Food and Drug Administration (FDA).
The rush for a coronavirus treatment option inspired considerable optimism about Gilead’s prospects. SVB Leerink’s Geoffrey Porges projected that remdesivir could achieve about $5,000 per treatment course in the U.S. after the preliminary, sunny results.
Gilead appears to have taken a more moderate approach—but one that recognizes the quirks of the American health system, which allows drug companies to charge higher prices, in part because of middlemen.
“Because of the way the U.S. system is set up and the discounts that government health care programs expect, the price for U.S. private insurance companies [for remdesivir], will be $520 per vial,” wrote Gilead CEO Daniel O’Day in a public note. “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.”
Negotiations between a drug giant, insurers, and the government don’t necessarily mean much when it comes to patients’ out-of-pocket costs, though. That’s an issue that will largely be determined by hospitals and the types of insurance plans that individual COVID patients hold, according to a Gilead spokesperson—as well as the company’s own patient assistance programs.
“Out-of-pocket costs will be determined by individual health plans. We do not expect affordability to be an issue for patients because of government efforts in place for COVID-19 patients, health care insurers, and additional assistance that Gilead will provide as needed,” the company tells Fortune.
Many people with insurance would likely be covered for most COVID-related medical costs (although that can be complicated by long hospital stays). It’s more complicated for those without health coverage. Gilead says that existing federal law should help people who face that dilemma.
“For the uninsured, [existing law] created a Provider Relief Fund, which helps hospitals provide uninsured patients with access to COVID-19 treatments without any out-of-pocket costs,” a Gilead spokesperson told Fortune.
Indeed, hospitals can submit such claims to this fund. But it’s up to that particular hospital’s whims. Beyond that, the benevolence relies on the very drugmaker creating the product it’s selling.
“We are hopeful that hospitals will seek to access this funding for patient treatment needs, including remdesivir,” said the spokesperson. “To support uninsured patients whose hospital does not submit a claim to the Provider Relief Fund, we are offering a program that will provide free product for such uninsured, eligible patients.”
