Hospitals will be able to buy predetermined amounts of the promising coronavirus treatment remdesivir through September for up to $3,200 per five-day treatment course, HHS said Monday.
Hospitals are currently getting the drug for free because of Gilead Sciences’ initial donation of remdesivir, which officially runs out on Monday. HHS reached a deal to secure the lions’ share of Gilead’s scheduled production of remdesivir through September.
HHS secured more than 500,000 treatment courses over the next three months. After September, Gilead said that HHS will no longer manage allocation.
The amount of remdesivir any given hospital can purchase will be determined by federal and state governments based on hospitalization data. The drug will be shipped directly to hospitals, which is different from the current system where state health departments distribute the drug. The shipments will likely go out every two weeks, HHS said.
The estimated $3,200 maximum price hospitals could pay for the next three months is significantly higher than the price a prominent independent analyst estimated would be cost-effective given current evidence.
Preliminary data from a government-sponsored trial showed a median time to recovery of 11 days for those treated with remdesivir, compared with 15 days for patients who were not.
Gilead estimated that earlier hospital discharges could save U.S. hospitals $12,000 per patient, but health policy experts have said it’s too early to put a dollar amount on potential savings, and noted that hospital costs vary widely.
Several factors could substantially change the Institute for Clinical and Economic Review’s calculations — if remdesivir is proven to have a mortality benefit, the cost-effectiveness benchmark increases significantly. However, if the inexpensive steroid dexamethasone is proven to reduce the risk of mortality and becomes the standard of care for patients with severe COVID-19 cases, ICER estimates remdesivir’s cost-effectiveness benchmark could be reduced.
Patients generally won’t directly pay for the drug. In Medicare, the cost will be incorporated into the diagnostic-related group payments hospitals receive for treating COVID-19 patients. Congress temporarily increased hospitals’ inpatient DRG payments for coronavirus patients by 20%, but the pay bump ends with the public health emergency. The current emergency designation ends July 25, but the HHS secretary can choose to renew it for another 90-day period.
A senior HHS official refused to comment on whether HHS has had any conversations with Gilead about the potential of a New Technology Add-On Payment. If CMS provides a NTAP, hospitals get paid some of the cost of the product if a patient’s care ends up costing more than the related DRG payment.
Under the normal pathway for NTAP approval, the payments wouldn’t be available until October 2021.