Two documents dating back to 2015 shed further light on the role the federal government played in discovering remdesivir and its use in treating coronaviruses — work that has taken on new meaning as the Gilead Sciences (GILD) drug has gained global attention and an emergency use authorization from federal regulators to treat patients with Covid-19.

The first document was an application filed in September 2015 in which Gilead sought a U.S. patent for a using the compound for any number of coronavirus infections. Although the code Gilead assigned to the compound – GS-5734 – does not appear in the body of the application, experts who have reviewed the chemical structure say the compound is remdesivir. And Gilead could take that patent, which was issued last year, to the bank if its medicine ever becomes a viable business proposition for treating Covid-19 or any other illness.

One month later, some of the same Gilead employees whose names appeared on the patent application were listed as co-authors on a Nature research paper – along with numerous government scientists – showing remdesivir, specifically, held promise in fighting Ebola and other coronaviruses. The paper also noted testing was conducted at high-risk security labs run by the federal government.

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The role played by the federal government in developing remdesivir to combat coronaviruses has, in fact, involved various grants to universities, as well as contributions from government personnel at such agencies as the U.S. Army Medical Research Institute of Infectious Diseases, according to Knowledge Ecology International, an advocacy group that first disclosed these connections.

But while it remains unclear the extent to which federal funds contributed to the R&D, the patent is of particular interest because it is tangible evidence that government work yielded something of potential financial value to the company. Yet government employees are not listed as inventors, which one expert suggested should be corrected, especially in an era when federally financed research might be leveraged to collect royalties or, arguably, lower the price of medicines.

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“In this case, all of these scientists were really working together very intimately on research that led to the molecule,” said Arti Rai, a Duke University law professor who specializes in intellectual property and a former U.S. Patent and Trademark Office official, who is researching remdesivir patents and the role played by the federal government.

“Gilead actually had a huge number of patents on the molecules, but had to do a tremendous amount of work to figure out which variations of the various molecules would work against the biological models the government had. This patent illustrates the essence of why collaboration between the public and private sectors is important, not just in terms of money, such as grants, but resources.”

“What really matters is how much money the government has put into research, but if their names were on there, it would help to make the case there was a lot of in-kind contribution from the government,” she explained. “Right now, if Gilead tried to assert rights (in response to a patent challenge), there would be no way to know there was some government right to a license to the patent.”

Generally, one must play connect the dots to find government assistance. For instance, the National Institutes of Health gave grants to several universities whose researchers worked with Gilead scientists. Their efforts appeared in a 2018 paper in the American Society for Microbiology, which found remdesivir can combat coronaviruses, noted Tahir Amin, who heads the Initiative for Medicines, Access, and Knowledge, an advocacy group that challenged various Gilead patents on hepatitis C medicines.

We asked Gilead, which several months ago sought to add claims to the patent, for comment and will update you accordingly.

The issue arises amid intense anticipation over the ability of remdesivir to combat Covid-19. Last week, preliminary clinical trial results indicated the intravenous drug can be used to treat the most serious patients. The disclosure prompted the Food and Drug Administration to quickly grant an emergency use authorization so the medicine can be used by hospitals. The U.S. government is overseeing distribution.

The news also accelerated growing concern over future access to the medicine at a time when there is already worldwide anxiety over the affordability of any Covid-19 medical product. The World Health Organization, for instance, reached out to Gilead and the U.S. government earlier this week to ask about the availability of remdesivir in other countries.

In the U.S., such apprehension has often emerged over costly medicines that were discovered, in part, thanks to backing from the federal government. Numerous consumer advocates, academics, and lawmakers have argued that prescription drugs invented with taxpayer dollars should be affordable to Americans. Public Citizen estimated that U.S. taxpayers contributed $70.5 million to remdesivir R&D overall.

“Since we’re paying for the research, we shouldn’t expect to be at disadvantage,” said Jamie Love of Knowledge Ecology International. “The argument that you have to have a high price because a company made big investments is harder to justify when there was a large public financing role in the R&D. A high company may say a high price is necessary, but the rationale falls apart when we’re paying for the R&D.”

Gilead has often been at the center of such debates. As noted previously, the drug maker and the federal government filed dueling lawsuits over patents that formed the basis of a best-selling HIV prevention pill called Truvada. The government claims Gilead should pay royalties on its patents, which stemmed, in part, from taxpayer funding, while the company has argued the government patents are invalid.

Given the Covid-19 pandemic, Gilead is facing increasingly intense scrutiny over access to remdesivir. Last week, two lawmakers asked the U.S. Department of Health and Human Services to provide information about various ways the agency may have provided funding that contributed to development of the drug and what will be done to ensure that Americans do not later encounter “price gouging.”

Keenly aware of negative publicity, the company agreed to donate 1.5 million doses in the U.S., which can be used for anywhere from 140,000 to 280,000 patients. And Gilead is talking to other companies about licenses so the medicine can be produced and more readily made available in other countries, including low-income nations.

Even so, there are questions about the extent to which remdesivir has the potential to become a moneymaker for the company. Gilead is investing about $1 billion on clinical trials and ramping up production, among other things, leading Wall Street analysts to question whether the medicine has enough legs to yield a long-term return.

“There continues to be a fair amount of debate on this topic. Gilead is being very judicious and careful in trying to balance social responsibility during the pandemic on one side, and shareholder questions on investments on the other side,” wrote Evercore ISI analyst Umer Raffat to investors in which he noted the donations and licensing talks. “But what happens after that?”

Already, though, pricing is being kicked around. Earlier this week, the Institute for Clinical and Economic Review estimated that remdesivir should be priced at about $4,460 to be cost effective. As SVBLeerink analyst Geoff Porges noted, this calculation puts “some bounds” on the pricing. To recover its costs, which ICER estimated $10 a for a 10-day course,  the nonprofit suggested remdesivir should be priced at $4,500.

[This post was corrected to note the ICER estimate is $4,500 for a course of remdesivir not $10].

  • Patent should best be in shared ownership for a funding government and the R&D company. This provides input on pricing, ensuring that government can purchase drugs at reasonable price. This benefits the whole population – not just those with deep pockets. As the virus with all its complicated symptoms does not differentiate between haves and have-nots, and will spread to all, there should be no discrimination in access to the drug that tackles it.

  • I am attempting to discover information that will reveal if A. Fauci invested in Remdesivir/Gilead. I’m looking for any signs of conflict of interest.

  • If the government scientists only participated after remdesivir was invented, then they are not inventors and should not be listed on the patent. In fact, the patent would be invalid if it listed anyone as an inventor who was not an inventor. It doesn’t matter how many people or how much money they spent on testing — that doesn’t make them inventors of a drug that already exists before their involvement.

  • Interesting article with good research. This establishes US government support for this work. Just two points to consider: first, authorship on an article and inventorship on a patent have different criteria. There is no way to tell that government researchers should have been inventors from scientific publications. Second, if the government collaborated without conditions, that was the deal. Third parties may not like it, and it may seem an unfair windfall for the company. However, sanctity of contract is enshrined in the Constitution and a long-standing principle of common law.

    That is not to say that the government should not condition investment in research on access, price, or some other condition. Profit investors certainly do. They just should not change the rules after the collaboration has started.

  • How was Fauci involved in the funding? Some of the Gilead compounding has been outsourced to other laboratories in Wuhan with financial ties to Soro’s, Gates and Clinton. Why did Fauci ban a far cheaper approach to treatment ($20 for 60 pills) that U.S. Doctors found effective in 91% of cases? What is the relationship between Fauci and Clinton? Notes found on the Clinton server indicate a closer than professional association.

  • If the government created it they should put up the money for building the factory and the distribution of the drug

  • The fact that the US government isn’t given any credit is not at all unusual.

    The government has been financing most drug research for many decades, but the drug companies have always claimed that they paid for all development.

    In fact, the government seldom is given credit for research which results in profitable products.

    • Nothing prevents the government from making investment subject to conditions. The government chooses not to.

  • Perhaps the author and his “unnamed experts” would like to put their capital at risk and try to make a drug. Constant empty-headed pharma bashing at a time when we need breakthroughs while rewarding for the left reduces motivation for those who, unlike the author, take risk to deliver results or invest in same.

    I practiced medicine and it would have been a bit of a challenge w/o drugs. What we need is more competition and less regulation to get drugs to market. For the young, the mandate of the FDA used to be safety alone with efficacy left to those with expertise, patient relationships and MD behind their names. Now it’s a political mess with delays and blame

    • Hi Ed Fotsch,

      Thanks for the note.

      And I think you misunderstood how I came to write this story, if not the larger issue.

      The struggle between patient and profit in this country is not new, unfortunately. And there are no easy answers given our system. But affordability and accessibility remains of concern to many people and what happens with taxpayers dollars is also of legitimate interest. And so I have been tracking the topic for years.

      I don’t mean to suggest the future may or should hold something akin to a black-and-white situation in which a company should not be rewarded sufficiently for its work or it can charge whatever it wants. How we better achieve a balance is the goal and, right now, we have been in the throes of debate over a solution for years. Covid-19 is bringing to the fore.

      I agree that innovation requires investment and that, in turn, should yield a reward. What kind of reward? How much of a reward? Should profits be ‘reasonable?’ Who decides that? What is a fair price? Who decides that?

      Perhaps some prefer a have-and-have-not society, where there are folks who simply lose out and their health worsens. Although there are societal – and economic – consequences that come with such an approach, as well.

      I think you misconstrue my reasons, as a journalist, for writing about the Gilead patent and the broader questions being raised. I want safe and effective medicines, too. I want excellent research, but also accessible cost. Remember, a medicine is not effective if it is not affordable.

      In any event, I wasn’t taking sides here, as you seem to suggest. I would argue that you seem to be too quick to shoot the messenger. To use your parlance, constant media bashing, at a time when we need reasonable discussion about ensuring we get the best medicines, and get them to all who need them, misses an opportunity for real discussion.

      Stay safe,
      ed at pharmalot

  • Folks might take a look at suggestions for a reward framework proposed by Hannah Brennan, Amy Kapczynski and others in Yale Law Review (Vol 18, #1, 2017: https://digitalcommons.law.yale.edu/yjolt/vol18/iss1/7). They propose fed gov payments to cover not just cost of the drug but also failure rate and risk. Not popular among firms, but not too different from ICER proposals.

  • There’s a clear market failure in basic research. This means that private firms do not have a clear enough road to capture the value they may help create at that basic level. So they don’t invest. If we decide that we shouldn’t have basic research, then that’s that. If we do, then we have to decide at which point in the value chain we decide to cut the line. Is it just research? Is it later stage clinical development? Commercialization? Be sure to think about where the market failure is and is not. Trying to say government funding of basic research is a trump card for a drug taken out of that environment by private firms is simply economically illiterate (or disingenuous).

    • Hi Chris,

      Thanks for the note.

      This is an old, but accelerating debate and yes, there is a point at which private investment must be acknowledged and rewarded or investment may dissipate. That is why the NIH removed fair pricing clauses from CRADAs in 1995. But the issue of accessibility has remained problematic, just the same.

      This may be a moment in time to more explore ways, if they exist, to find a balance, or the line, as you put it.

      Stay safe,
      ed at pharmalot

    • Thanks Ed. I think the question is more precisely: given we know there is an access vs. innovation tradeoff inherently, is “accessibility [remaining] problematic” really just acknowledging that the tradeoff exists? Innovation remains problematic on that note, given it’s taken decades to get something like CF to be steps away from a cure as it is today. If we had, for example, longer patents, we could make the argument more dollars would have flowed earlier, accelerating this pipeline. Basically, we tend to under-appreciate (and I argue under-report) how much the counterfactual is equally problematic. We can see drug prices for drugs that exist today or are close. We can’t see the infinite price on a drug that doesn’t exist yet.

    • Hi Chris,

      When I say that access is problematic, unfortunately, it is for some people. Medicines don’t work for those who can’t gain access. This reflects a larger systemic problem that is due, partly, to our health care payment system.

      I don’t think anyone under appreciates the benefits of a CF drug, but a lot of folks in the UK couldn’t get one for a few years because of the battle between the company and the government.

      Situations may vary, but nothing will change without new approaches to reward innovation or reimbursement and, perhaps, compromise once in a while.

      I don’t have the answers, but enjoy chatting about it.

      Cheers
      ed

    • Ed, thanks for engaging in the dialogue. I guess I’m just trying to understand: if there is zero access problem, we either (a) have no budget constraint (e.g., 100% of our economic activity is going to pharma) or (b) we have decided that we are comfortable with all unmet clinical needs that exist today being left unmet in perpetuity (given we would reduce prices to marginal cost through monopsony power). In that case, we have 100% and 0% innovation. The second we want any innovation, we are trading off some proportionality of access (referring back to the statement that access is problematic for some people still). It will always be (again unless we live in a world without a budget constraint). There isn’t a model where you can eliminate all access issues and have innovation. You can have most access issues eliminated and lower rates of innovation (and maybe that’s what we decide to do). But I think about the people with Hep C in 2008 who had no cure and am glad the people in 2018 weren’t facing the same fate – and the people in 2038 who will have a generic form of the cure for virtually nothing. The temporal nature of this tradeoff already heavily weights the benefits to access when looked at beyond just point in time.

    • *grammatical omission on my part for the third sentence: “In that case, we have 100% access and 0% innovation.”

    • Hi Chris,

      Thanks for the conversation.

      I agree that it is very difficult to find a perfect solution – that sweet spot of a balance between access and innovation.

      Perhaps the reward for innovation may have to morph – prizes, as some suggest. Or perhaps government has to be willing to subsidize some people in ways not currently done. Or maybe there has to be a compromise on pricing. Maybe all of the above and/or some other approaches.

      I understand your point about hepatitis C. The first of the newest drugs were cures and greatly reduced the need for transplants and other costs. It was a life-changing breakthough. The company charged what it could. At the same time, all sorts of budgets were strained, which led to imaginative thinking. Netflix models, for instance. The situation forced everyone, including the company, to behave somewhat different, at least at times. And yes, you might argue that, just the same, those high prices later made it possible to research remdesivir. As you suggest, there is a continuum.

      Nonetheless, the realization that there may always be some lack of access – if we want the best innovation – does not mean we should stop seeking ways to expand access. And I think that is what behind these efforts to look at patents – it is one way into the broader discussion about trade offs and balances.

      Hope this helps,
      ed

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