The United States reached something of a milestone when the Food and Drug Administration approved the first treatment for Covid-19 last week.
The drug is called Veklury, although most people know it by the scientific name Remdesivir.
On Wednesday, manufacturer Gilead Sciences announced that Remdesivir, which has been approved for emergency use since the spring, had sales of $ 873 million so far this year and that it was the company’s third-best-selling drug in the third quarter, behind his HIV drug Biktarvy.
The FDA’s decision to fully approve the drug – meaning the company can now begin marketing it widely to doctors and patients – has puzzled several outside experts, who say it may not deserve the agency’s seal of approval, because it is, at best, a mediocre treatment for Covid-19, the disease caused by the coronavirus. And they have questioned whether Gilead deserves to get potential billions out of the drug if the federal government played a significant role in its development.
“This is a worrying approval,” said Dr. Peter B. Bach, director of the Center for Health Policy and Outcomes at Memorial Sloan Kettering Cancer Center. “This is an extremely weak set of studies to support approval for an antiviral agent.”
Remdesivir was seen as one of the greatest hopes during the dark days of March and April, when doctors had few tools to treat a new disease and families in a desperate move were given access to the drug to save their dying relatives.
More than six months later, the enthusiasm has subsided. A large, government-run study showed the drug reduced patient recovery times, but the other two studies the FDA used to justify its approval – sponsored by Gilead – didn’t compare the treatments to a placebo, the gold standard for the evaluation of a drug. No studies have shown that it significantly lowers death rates.
And just days before the FDA approved, a large study sponsored by the World Health Organization found that remdesivir was of no benefit to hospital patients.
“I think most people think that because a drug is FDA approved it has to work,” said Dr. Aaron S. Kesselheim, Professor of Medicine at Harvard Medical School who studies the drug industry. He and other researchers recently found that less than a third of the new drugs approved by the FDA and its European counterpart over the past decade had been rated “highly therapeutic” by outside experts.
“I think it’s important to realize that FDA approval doesn’t guarantee any specific benefit – all it says is that there is some benefit,” he said.
On a call to investors on Wednesday, Gilead CEO Daniel O’Day said remdesivir had a role to play alongside vaccines and other treatments.
“We don’t know much about the pandemic, of course, but I think we do know that it will take different approaches to get us all back to normal,” he said. “We pride ourselves on being at the forefront with a very powerful antiviral.”
Originally developed to treat Ebola and hepatitis C, Remdesivir is believed to interfere with the reproduction of viruses by inserting itself into new viral genes.
Given that it had previously shown promise in animal studies with other coronaviruses, it was seen as a possible answer for Covid-19 almost immediately. Gilead brought emergency jars to China and began ramping up production.
The drug was originally used on the very sick, but has since proven to be better as the disease progressed. It is routinely given as a five-day treatment to people hospitalized for Covid-19, including President Trump when he became infected earlier this month.
Gilead has been criticized for its efforts to benefit from the drug. In March, when there were fewer than 200,000 cases of Covid-19, the company filed with the FDA to designate remdesivir as an orphan drug, a designation that provides tax and other incentives to companies developing products for rare diseases. After a public outcry, she asked the FDA to withdraw her application.
Gilead has received mixed reviews from outside experts on the price it set, namely $ 3,120 for treatment for private insurers and $ 2,340 for government agencies.
An outside drug pricing group, the Institute for Clinical and Economic Review, said Gilead had made a “responsible pricing decision,” in line with its own decision that $ 2,800 would be a fair price. That praise came with one major caveat, however – the price would only be fair if remdesivir ultimately proved to significantly lower the death rate, a benefit that has not been proven.
Others say the company’s profits are unfair considering how much support it has received from the government. Public Citizen, a consumer group, estimated that the federal government invested $ 70 million in remdesivir, and it sponsored the main study that led to FDA approval – and the only major study that compared it to a placebo.
“Remdesivir should be in the public domain,” said Peter Maybarduk, director of the global drug access program at Public Citizen. “Gilead will have repaid its modest investment many times over.”
In August, attorneys general from 34 states wrote to the federal health authorities asking them to exercise so-called invasion rights to alleviate the (now resolved) drug shortage. And in September, 11 state treasurers wrote to the company asking it to rate the drug as “cheaper”.
In a statement, Gilead said its own investment in the drug this year will “exceed $ 1 billion, largely due to early investments in expanding production rapidly, and we expect to invest significantly more in 2021, when we make additional investments in design and manufacturing around the world. “
The company announced that it is expected to have produced enough drugs to treat two million patients by December and is investigating an inhaled form of the drug that could expand its use to outpatients.
Last week, Gilead was criticized again for receiving a priority review voucher when approving remdesivir, which would allow it to get an expedited review from the agency for a future product or sell that right to another company. The coupons, which can be sold in the open market for around $ 100 million, are given to companies that develop products that address a public health threat such as a pandemic that may otherwise not be profitable.
But Remdesivir is already proving to be a major moneymaker for Gilead.
“The idea behind the Priority Review voucher program is that there is relatively little financial incentive for companies to manufacture drugs for some of these conditions,” said Rachel Sachs, associate professor of law at Washington University in St. Louis, who deals with drug policy deals. “If we think this drug is going to be a blockbuster, then the reasons we developed the program seem to apply here with much less force.”
The FDA approval came as a surprise to some as it came just days after the results of the Solidarity Study, a large global study involving more than 11,000 people that found that remdesivir did not reduce deaths, was released.
However, both the FDA and Gilead found that the solidarity study had flaws, including the fact that it was not compared to a placebo like the study sponsored by the National Institutes of Health was.
After Veklury is approved by the FDA, Gilead can begin marketing it, including to doctors and hospitals who may be reluctant to use the treatment.
Gilead said it had no plans to run a television commercial for Veklury but would “use a field team of medical professionals and salespeople to train health professionals across the country.”
It also said it has plans to “develop some direct-to-consumer materials on Veklury that will focus on providing information and education to patients and their families”.
Veklury’s future sales are uncertain. Speaking to investors, executives said it was difficult to predict earnings in the middle of a pandemic. Around 40 to 50 percent of Covid-19 patients in the hospital are receiving the drug – less than some industry analysts expected. But the drug is so far profitable. A Wall Street analyst, Geoffrey Porges of SVB Leerink, said Thursday that the company’s gross margin on sales to the government – the amount it pocketed after the cost of production – appeared to be around 90 percent.
In an interview with investors, Mr. O’Day said that he ultimately expected Veklury to provide “a very good return” on the company’s investment. “We firmly believe that Veklury will add to our total sales and be an important source of money for our business,” he said.
Dr. Memorial Sloan Kettering’s Bach said that as doctors’ knowledge of Covid-19 had developed, the importance of remdesivir had diminished in favor of other options, including dexamethasone, a steroid made by several generic drug companies.
Since the steroid is a cheap, widely used drug that has long since expired its patent protection, there is little incentive for these companies to seek formal FDA approval to market the drug for Covid-19.
This gives Gilead a potential marketing advantage as no other pharmaceutical company is actively competing for sales. However, the purpose of an approval is not to provide a financial incentive to companies.
“The FDA doesn’t exist to give cash prizes to drug companies,” said Dr. Brook. “The FDA is supposed to help educate physicians what drugs to give patients today.”