July 1, 2020

expert reaction to news US has bought up most of Gilead’s stock of remdesivir

It has been reported that the US are buying up large stocks of the drug remdesivir, which has preliminarily shown to have some benefit as a treatment for COVID-19. 

Dr Farasat Bokhari, Associate Professor in Economics, School of Economics and Centre for Competition Policy at the University of East Anglia, said:

“Gilead provided free licences to several generic makers back in May to produce and distribute Remdesivir.  These included Mylan as well as other generic makers in Pakistan and India.  The licenses are royalty free for now and firms are free to set their own prices and export to another 127 countries.   Hopefully these companies will be able to step up and provide supplies through-out the world.  

“Even other firms who did not receive a license from Gilead may start making the drug.  For instance, Bangladesh based Beximco is already producing Remdesivir and Pakistan based Searle is importing from them.  Beximco is producing the drug without licence from Gilead under the provisions of the World Trade Organization’s TRIPS agreement (Trade-Related Aspects of Intellectual Property Rights) that allow authorities in least developed countries (LCD) to issue `compulsory licence’ under certain situations.  They can also export to other countries, but the patent holder is still entitled to a payment.  Other non-LCD nations are also considering compulsory licensing and have introduced such bills.

“Remdesivir is not likely to be needed for all COVID-19 patients. Recall it is for certain hospital based patients.  But if you are worried that you or a loved one will need this drug and it won’t be available if you are not in the US, I don’t think that will be the case (and I certainly hope not), as manufactures in other countries are going to ramp up production.  The only issue is how fast they can do it.”

Prof Gino Martini, Royal Pharmaceutical Society’s Chief Scientist, said:

“The US action means clinical supply chains will be under strain. It will be down to manufacturers Gilead to boost production in order to satisfy demand for the use of Remdesivir.  

“Remdesivir is still classed as an investigational drug and so under patent, its use for COVID 19 in the USA is permitted via an Emergency Use Authorisation as currently there is no official use for Remdesivir for COVID 19.  Dexamethasone was discovered in 1957 and so its patent expired many years ago.

“The issue is the high demand for a drug that is still an investigational medicine and probably had not been scaled up to a manufacturing level when the outbreak occurred.  Scaling up medicines to a production level is not a trivial matter and is controlled by regulatory and quality control standards and so takes time.

“I would expect remdesivir to become available simultaneously across the world if the evidence continues to support the use of Remdesivir to treat COVID 19. Global launches are standard practice in the pharma industry.”

Dr Penny Ward, Visiting Professor in Pharmaceutical Medicine at King’s College London and Chair of the Education and Standards Committee of the Faculty of Pharmaceutical Medicine, said:

“Gilead has been clear that manufacturing capacity is limited by a number of issues and have laid out the steps they have been taking to scale up to try to meet demand. https://www.gilead.com/purpose/advancing-global-health/covid-19/working-to-supply-remdesivir-for-covid-19. They have not commented on the current situation following the US Department of Health and Human Services (HHS) announcement, but could be asked to do so.

“It should be borne in mind that the USA is the country in the world worst affected by COVID-19, with over 2.5 million cases and >125,000 deaths to date, currently facing fast rising case numbers in many states and with a high proportion of high risk individuals in many cities. It is unreasonable to expect that the US government should deny their population access to drugs manufactured in the USA. In addition, as this is a public health emergency the US government can take action to prohibit the export of drugs which are considered essential to enable treatment of patients with this disease. These laws also exist in many other countries, and indeed the UK government has enacted laws to prohibit the export of essential medicines from the UK in this same situation – see https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/892354/Medicines_that_cannot_be_parallel_exported_from_the_UK_15_June_2020.csv/preview.

“A patent is a form of intellectual property that gives its owner the legal right to exclude others from making, using, or selling an invention for a limited period of years in exchange for publishing an enabling public disclosure of the invention. This protection gives the owner of the patent rights to either license these rights to others in return for a fee, or to make and sell the invention themselves. Patent terms generally run for a period of 20 years. This system has resulted in a vibrant research and development environment which has delivered medicines which have transformed the practice of medicine over the past 100 years. Gilead owns the worldwide patent rights for remdesivir. Gilead has shared their intellectual property via the putting in place of many voluntary licensing agreements to a number of manufacturers in India, Egypt and Pakistan, with a view to enabling production of the product for use in developing nations, https://www.gilead.com/purpose/advancing-global-health/covid-19/voluntary-licensing-agreements-for-remdesivir).

“This is compared to dexamethasone which is now ‘off patent’ and there are multiple manufacturers that make and supply this product internationally. It is relatively easily manufactured and is inexpensive.

“The cost of manufacture of remdesivir is not publicly known. Based on the information provided in their statement on manufacturing and the need for sterile facilities, the cost is likely to be quite high. That said, the costs of manufacture are not the only issue to be taken into account when pricing a new product. Most drug manufacturers bear the costs of research and development not of only one but many potential drug agents, and many of these never reach the market. To ensure that they can remain a ‘going concern’ manufacturers must be able to meet all of these costs, pay a dividend to their investors and generate additional cash enabling new research and development activities. As a result the cost of a medicine which reaches the market always exceeds the cost of manufacturing alone (even for off patent medicines). However as market forces apply, costs must be set at levels which payors are willing to pay. Gilead has announced that the cost of a course of remdesivir (6 vials) in the US will be $2340.

“If this were a treatment for a long term illness, Gilead would have had to continue to supply the product for the treatment of individual trial participants pending market availability of the product in the country in which the affected individual lives. As this is a short term treatment for an infectious disease from which patients either recover or die, there is no general requirement to continue to supply the drug once a trial/course of treatment for an individual is completed. However, all the public statements made by the company indicate that they have worked hard to try to scale up a difficult manufacturing process as rapidly as they can, and have made supplies available in many countries on request of those countries governments/health authorities both for clinical trials and for compassionate use prior to approval for clinical use. As noted above, they have also shared intellectual property on the manufacturing process to enable production in other countries with the aim of supplying developing nations.

“It would be unfair to the company to blame Gilead for President Trump’s actions.”

Dr Ohid Yaqub, Senior Lecturer at the Science Policy Research Unit, University of Sussex, said:

“The buying-up of remdesivir is disappointing news, not necessarily because of the shortages it implies for other countries, but because it so clearly signals an unwillingness to co-operate with other countries, and the chilling effect this has on international agreements about intellectual property rights.

“The shortage issue may be addressed by governments around the world invoking compulsory licensing. This is a mechanism under TRIPS Article 31, where governments can decide that the circumstances are so urgent, say a public health emergency such as this one, that they will not respect a patent holder’s rights to monopoly. So the governments of those countries will allow their manufacturers to go ahead with producing generic versions of the patented drugs. They may even allow them to be exported around the world, in direct competition to the brand name drugs produced by the patent holder.

“Undermining the monopoly rights like this presents a challenge for the multilateral view on the need to offer some degree of intellectual property protection in order to provide R&D incentives. It will be of concern not just to expert policy makers, but also other companies too, who will not want to see TRIPs being undermined.

“It would also frustrate some US consumers, who may see US citizens paying patent prices, whilst other consumers around the world pay generic prices. So, if the implications are widely discussed and strongly articulated, we may well see this decision being reversed by the mere threat of compulsory licensing, or at least some degree of back tracking. Indeed the mere threat of compulsory licensing seemed to have an effect twenty years ago when patents on antiretroviral drugs were being discussed for the HIV epidemic.

“This situation is different to dexamethasone because the patent on that drug expired a long time ago. The drug is often described as ‘cheap’, but a better description is ‘off-patent’ to indicate that the period of monopoly pricing has expired. This is because nearly all drugs are cheap to make but expensive to develop. The chance of having a period of time where companies have monopoly pricing is a central part of why companies are willing to invest in development costs, where they can charge ‘what the market will bear’.”

All our previous output on this subject can be seen at this weblink:

www.sciencemediacentre.org/tag/covid-19

Declared interests

Dr Farasat Bokhari: Nothing to declare. I don’t work for any of these companies nor have I ever worked/consulted for them. 

Prof Gino Martini: No declarations of interest.

Dr Penny Ward: No COIs.  I am semi-retired, but I am owner/Director of PWG Consulting (Biopharma) Ltd a consulting firm advising companies on drug and device development.  Between December 2016 and July 2019 I served as Chief Medical Officer of Virion Biotherapeutics Ltd, a company developing antiviral treatments for respiratory viral diseases.  Previous employee of Roche, makers of tocilizumab (anti IL6 antibody) and CMO of Novimmune, makers of empalumab (anti IFN gamma antibody).

Dr Ohid Yaqub: I have no declarations of interest. My work on biomedical research and innovation was funded by the UK’s Economic and Social Research Council https://esrc.ukri.org/funding/funding-opportunities/ukri-future-leaders-fellowships/, and is currently funded by the European Research Council https://erc.europa.eu/funding/starting-grants