The COVID-19 pandemic has revived the debate over drug pricing in the US, as reported in Morningstar.
"We are likely to face significant public attention and scrutiny about any future business models and pricing decisions with respect to remdesivir," Gilead Sciences noted in a securities filing. It promised to give away its first production run and allow developing countries to make generics.
The Institute for Clinical Economic Review says remdesivir's value is as low as $10 for a 10-day course, based on its manufacturing cost, or as high as $4500 based on its contribution to quality and length of life.
Meanwhile, Johnson & Johnson said it would sell its vaccine, now in trials, on a not-for-profit basis, while Moderna's CEO has said "we don't want to maximize profit" on its vaccine.
The news source said "this may be an astute investment in good will, but not a sustainable business model," and suggested that the "big question is whether COVID-19 proves to the public and politicians the merits of the current pricing system, which lets drug companies charge whatever the market will bear."
While there is broad agreement that the private market incents innovation, "the real question is whether everything that comes out is worth the price we end up paying for it," said Patricia Danzon, a professor of healthcare management at the University of Pennsylvania.
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