Person entering Gilead buildingGilead had promised to donate its supply of the drug through June,but what the company would charge after the donation runs out hasbeen furiously debated. (Photo: David PaulMorris/Bloomberg)

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(Bloomberg) –Gilead Sciences Inc. said it will charge the U.S.government and other developed countries $390 per vial for itscoronavirus-fighting drug remdesivir, or about $2,340 for a typicalfive-day course of treatment.

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Gilead said in a statement Monday it would offer this price todeveloped countries around the world, in order to create aone-price model that would avoid the need for country-by-countrynegotiations that could slow down access.

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Related: Pharmacies instituting anti-hoarding measures forpossible coronavirus treatments

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"We wanted to make sure that nothing gets in the way ofremdesivir getting to patients," Gilead Chief Executive OfficerDaniel O'Day said in an interview. The price "will make sure allpatients around the world have access to this medicine."

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The $390 per vial price is for government entities. Once supplyis less tight and Gilead starts selling the drug in normaldistribution channels, the list price for private insurancecompanies and other commercial payers in the U.S. will be $520 avial, or $3,120 for a five-day course.

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Remdesivir is one of the first widely used drugs for Covid-19.It received an emergency use authorization from U.S. regulators inMay, after a big trial found the medicine sped recovery by aboutfour days in hospitalized patients. Hundreds of treatments andvaccines are in development around the globe as researchers race tofind ways to halt a global pandemic that's infected over 10 millionpeople and killed more than 500,000.

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Gilead had promised to donate its supply of the drug throughJune, but what the company would charge after the donation runs outhas been furiously debated. The drugmaker's pricing decision isconsequential because it sets a precedent for how much futuremedicines for Covid-19 may cost.

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The company suggested that it could have charged more based onthe value the medicine provides, the typical approach drugmakersuse in setting pricing for new and innovative therapies. It arguedremdesivir could save $12,000 per patient by getting people out ofthe hospital faster. But it went with a lower price in order tomake sure that all developed countries could afford it.

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Shares of the Foster City, California-based drugmaker gained1.6% to $75.75 in premarket trading Monday in New York. ThroughFriday, Gilead shares had gained 15% so far this year.

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Gilead also said Monday it reached agreement with the Departmentof Health and Human Services to manage the allocation of remdesivirin the U.S. through September.

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The coronavirus crisis in the U.S. is escalating as new cases ofinfection reach records. States such as Texas, Arizona and Floridaare becoming overwhelmed and plans to re-open their economies arebeing reversed.

Balancing act

Some estimates have found that remdesivir would be costeffective at as much as $4,500 for a treatment course. Otheradvocates, including consumer-rights group Public Citizen, havesaid the drug should just cost $1 a day based on calculations thatit could be manufactured at scale by generic drugmakers for thisamount.

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In the interview, O'Day said $1 per day was "not a realisticprice point."

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Six vials of remdesivir are used during a five-day treatment.But a minority of patients need 10 days of treatment, or 11 vials,which would bring the total cost up to $4,290.

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To date, Gilead has donated about a quarter of a milliontreatment courses of remdesivir, and it is bolstering supplyrapidly. By the end of the year, it expects to produce around 2million treatment courses.

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O'Day said pricing of the drug was a balancing act. On the onehand, a pandemic is raging and there is no cure. On the other hand,the company is a for-profit entity that has made enormousinvestment into manufacturing large quantities of the medicinequickly as well as developing new, easier-to-administerversions.

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