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Is this Big Pharma giant about to price gouge on new COVID-19 drug?

by Resurgent Insider Read Profile arrow_right_alt

Big Pharma giant Gilead Sciences might turn out to have the cure for the COVID-19 virus .

But it also could price-gouge COVID-19 patients, thanks to the company’s ruthlessness where drug pricing is concerned combined with the fact that recent Food and Drug Administration (FDA) action ensures that it holds exclusive marketing rights to the cocktail in question because it is an “orphan drug.”

Gilead has promised that despite the FDA’s designation of possible COVID-19 drug remdesivir under the Orphan Drug Act, it will not exercise the seven-year exclusive marketing rights that come with the status.

In fact, last week the company asked the FDA to rescind those rights.

But the FDA has not as yet acted, and it likely has more pressing matters.

That presents the possibility that if Gilead changes its tune, it could wind up charging patients top dollar for a full seven years – unless the FDA reverses its decision quickly. Orphan drugs can easily cost 20 times as much as non-orphans. Plus, Gilead has a record of pricing drugs on the higher end.

The company’s Truvada drug, used to prevent HIV including in many rural parts of America ravaged by the opioid crisis where oxycontin users have switched to heroin thus putting themselves at risk for HIV infection, costs about $25,000 per patient per year.

In 2014, Gilead wound up in trouble for applying an $80,000+ price tag to a 3-month supply of Hepatitis C medication.

And most recently, it has come under scrutiny as the leading Big Pharma company trying to kill off the 340B drug discount program that provides cheaper drugs to less well-off patients and which functions as a lifeline for many rural hospitals.

Gilead got the “orphan drug” designation for remdesivir from FDA because it filed for it before the number of people diagnosed with COVID-19 reached 200,000.

The number of Americans confirmed to carry the virus now stands just short of that number.

The company also has a close ally within the Trump administration: Joe Grogan, currently the director of theĀ United States Domestic Policy Council and formerly a top health care official at the White House Office of Management and Budget.

Prior to going to work for the administration, Grogan was a top Gilead lobbyist for six years, earning more than $800,000 from the Big Pharma giant according to an Intercept investigation. His purview at the company included lobbying on drug pricing, and against legislation and regulation designed to keep prices down.

Grogan has continued his focus on drug pricing from within the administration, sometimes appearing to continue to do the bidding of his former employer. For example, moves to hammer the 340B drug discount program that is much-reviled by Gilead have been attributed to Grogan.

There is no evidence that Grogan helped push the “orphan drug” designation for his former paymaster, but some critics find his role on the coronavirus taskforce while FDA was weighing “orphan drug” status to be curious.

Given these optics, it would be smart for the FDA to grant Gilead’s rescission request this week. That would also prevent a company frequently accused of pushing for the highest possible drug prices and doing everything possible to scupper drug discounts from being able to price gouge with ease in the current crisis.

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