A rare bright spot followed the emergence of Covid-19 and its spread across the globe: the discovery that remdesivir, an experimental antiviral originally developed by Gilead Sciences and the U.S. government for use against Ebola, works against SARS-CoV-2, the virus that causes Covid-19.
Remdesivir isn’t a miracle drug. It has not been proven to significantly reduce patients’ risk of dying from Covid-19, though evidence from an NIH-led clinical trial indicates that it helps patients with severe Covid-19 recover more quickly, meaning they can leave the hospital sooner and return home. We urgently need more and better evidence of remdesivir’s (likely modest) benefits.
For a pandemic on track to be one of the worst in history, with U.S. deaths from Covid-19 soon to pass 130,000 and new infections hitting record highs, we desperately need every tool we can get to fight it, including remdesivir. The federal Department of Health and Human Services (HHS), which is entrusted with protecting the public health of Americans, can and must do more to ensure access to potential Covid-19 treatments, including remdesivir. That is more true than ever now that Gilead will soon begin charging outrageous prices for it: more than $3,100 to treat a typical Covid-19 patient with private health insurance.
HHS has the policy tools it needs to do just that. A report two of us (C.M. and J.K) recently published shows that HHS holds important patent rights over remdesivir that it could use to take control of manufacturing and distribution, thereby accelerating competition and ensuring that everyone can access the drug. HHS should publicly commit to exercising all of its patent rights on behalf of public health, unless and until Gilead commits to fair pricing and universal, global access.
Gilead is currently the sole supplier of remdesivir in the U.S., which creates two serious problems. First, the manufacturing capacity of Gilead (and its network of authorized suppliers) has failed to meet demand in the U.S. and around the world. As a result, the American medical system is experiencing severe shortages of the drug. Second, the price Gilead set for the drug is more than 10 times higher than what the Institute for Clinical and Economic Review estimates is a fair price for remdesivir ($310), given the drug’s modest therapeutic utility. Gilead’s price is likely also more than 250 times greater than its manufacturing costs; experts estimate that a standard course of remdesivir costs less than $10 to manufacture and distribute.
A little-known but powerful law could let HHS address these twin problems of supply and pricing in one fell swoop. 28 U.S.C. § 1498 allows federal agencies to take control of industry owned patents using a tool known as government patent use. Essentially, government patent use would let HHS control both the manufacturing and distribution of remdesivir by simply paying compensation to Gilead for the use of its patents.
HHS could license remdesivir manufacturing to multiple competing drug manufacturers, which would provide adequate supply while pushing prices down. Patients and payers would pay low prices for remdesivir, close to its manufacturing costs. HHS’s intervention would increase competition, not hinder it.
Meanwhile, Gilead would still be rewarded for its contributions to the development of remdesivir, as Gilead can go to court to collect the “reasonable and entire compensation” to which it is entitled under law for the government’s use of Gilead’s patents. (The court-awarded “reasonable and entire compensation” is typically a market-rate royalty, which could be worth tens or even hundreds of millions of dollars.) Everybody wins.
Employing the government patent use concept is particularly appealing because the U.S. government already appears to co-own the most important patents protecting remdesivir. Our recent report shows that methods of using remdesivir were jointly invented by Gilead and two federal biomedical research agencies, the Centers for Disease Control and Prevention and the United States Army Medical Research Institute of Infectious Diseases. Indeed, Public Citizen estimates that the federal government has already contributed more than $70 million to develop remdesivir. Because U.S. government scientists contributed to the invention of methods of using remdesivir to treat Covid-19, Ebola, and other diseases, under U.S. law the U.S. government appears to be the presumed co-owner of the “core” patents on remdesivir.
As a result, the government can — and should — use these patents as it pleases, including licensing them to generic manufacturers, without owing a penny to Gilead. Section 1498 would apply only to a handful of other patents on remdesivir that Gilead owns outright, and Gilead would receive its “reasonable and entire compensation” for the government’s use of those patents.
There is no time to waste. HHS’s response to Covid-19 has thus far been deeply flawed, including its position on remdesivir. On June 29, HHS announced plans to hoard the vast majority of Gilead’s entire supply of remdesivir for the foreseeable future — approximately 500,000 doses from now through September. HHS Secretary Alex Azar referred to his agency’s plan as an “amazing deal” with Gilead. The deal is amazingly good for Gilead’s executives and shareholders and amazingly bad for everyone else—bad for taxpayers, terrible for public health, and unethical.
Because of Gilead’s outrageous prices, Americans will collectively hand over a billion dollars to Gilead for those 500,000 doses; taxpayers and all who pay insurance premiums will foot that bill. Those 500,000 doses may prove insufficient to meet demand from patients within the U.S. as new cases are predicted to surge through the summer. Meanwhile, much of the rest of the world — billions of people at risk of infection or already sick and, like Americans, left out of Gilead’s plan to permit authorized generic suppliers to sell remdesivir in 127 mostly low- and middle-income countries — may go without remdesivir altogether because of HHS’s hoarding and Gilead’s insufficient supply.
But it is not too late for HHS to do better. U.S. government scientists helped invent remdesivir, and HHS has a legal and moral duty to ensure access to it in the U.S. and around the world. HHS has the policy tool it needs — government patent use — to ensure access by authorizing other companies to manufacture remdesivir, which will expand supply and reduce prices.
HHS must find the will to use that tool. When it does, it will have taken an important step toward reclaiming its leadership in the Covid-19 crisis and protecting the health of Americans and people all around the world.
Christopher Morten is a patent attorney and a fellow and supervising attorney at NYU School of Law. Christian Urrutia and James Krellenstein are co-founders of the PrEP4All Collaboration.
Editor’s note: The authors updated this article on July 20 to acknowledge Gilead’s plan to permit authorized generic suppliers to sell remdesivir in 127 mostly low- and middle-income countries.