In a significant development, the Central Drugs Standard Control Organisation (CDSCO) has approved the manufacturing and marketing of generic versions of the anti-COVID drug, remdesivir, by four companies, namely Cipla Ltd, Hetero Ltd, Jubilant Lifesciences and Mylan Ltd. The approvals were granted under CDSCO’s Restricted Emergency Use. The generic drug manufacturing companies were able to organise production of remdesivir after the originator company of the drug, Gilead Sciences, had granted voluntary licences to companies in India, Egypt and Pakistan to produce it for distribution in 127 developing countries. The other Indian companies that have received such licences are Dr Reddy’s Laboratories Ltd, Syngene and Zydus Cadila Healthcare Ltd.
In its order, the CDSCO stated that the approvals were granted for the same indication, restriction and conditions for use as was stipulated for the innovator company. Gilead had received an emergency use authorisation from the Federal Drug Administration of the US, which had stipulated that the drug had to be administered intravenously by healthcare providers to treat COVID patients with low blood oxygen levels. The use of remdesivir for COVID treatment has raised two sets of questions. The first is about the efficacy of the drug, which, according to the National Institute of Allergy and Infectious Diseases of the US, could reduce the average number of days of hospitalisation for a COVID patient from 15 days to 11 days.
Mortality rates of patients who were treated with remdesivir and those who were not, look quite similar (8% versus 11.6%). And finally, remdesivir cannot be used in all COVID cases, but only for the most serious ones. The more critical questions are regarding the affordability of the drug. Last month, Gilead announced that for government healthcare programmes, remdesivir would be priced at $390 per vial of 100 milligrams, while private insurance companies would be charged $520 per vial. Typically, a patient would require six vials for a five-day treatment, implying a per patient cost of $2,340 to $3,120. But the actual cost the patient has to bear will be higher, given that remdesivir can only be given intravenously in hospitals.
A few days before Gilead announced its price, Cipla and Hetero announced the prices of their versions, Cipremi and Covifor, respectively. The price of Cipremi is `4,000 per vial, while that of Covifor, `5,400. Thus, for a five-day treatment, a patient would have to pay anywhere between `24,000 and `32,400 only as the cost of the drug. The hospitals will then weigh in with their charges, which have been quite considerable. The one question that arises instantly is the affordability of the versions that the generic companies are marketing.
The licensing agreement between Gilead and the generic companies said the latter would be free to set their own prices and that the licensor will not charge royalties until the World Health Organisation declares the end of the Public Health Emergency of International Concern regarding COVID-19, or until a pharmaceutical product other than remdesivir or a vaccine is approved to treat or prevent COVID-19, whichever is earlier. And yet, the prices fixed for Cipremi and Covifor are only between 10 and 7 times lower than the prices in the US, whereas India’s per capita income in 2019 was 31 times lower than that of the US. And, of course, poverty and income inequality in India is considerably higher. Thus, this drug for treating severe cases of COVID is well beyond the means of an overwhelmingly large share of Indians.
The prices for remdesivir announced by Gilead Sciences for the US have also been questioned extensively. While it is usual for drug companies to base the price of products on their development costs, the case of remdesivir is different for two reasons. First, Gilead had developed remdesivir as a part of a family of drugs for treating chronic Hepatitis C. Given that the company had successfully launched other drugs for Hepatitis C, it is reasonable to assume that its costs for developing remdesivir have already been recouped. Secondly, Public Citizen, an advocacy group based in the US, disclosed that Gilead had received public financial support of $70.5 million for developing remdesivir. According to the group, the price of the treatment using remdesivir should be fixed at $1 per day.
A recent study by the US-based Institute for Clinical and Economic Review concluded that remdesivir should cost a patient no more than between $10 to $310 for a five-day treatment, after factoring in the contributions from the public exchequer. These numbers show that the Indian generics have priced their products higher than the maximum reasonable price in the US.
Under the circumstances, there is a strong case for the Government of India to step in for making remdesivir affordable. In May, a number of health groups had petitioned the government to revoke Gilead’s patent on remdesivir in India, thus allowing generic competition to lower its price. Apart from considering this, the government must enter into bulk procurement of the drug to ensure its affordability. And, finally, strong pharmaco-vigilance must be put in place to generate data on efficacy and adverse events associated with the use of this drug.
Biswajit Dhar (bisjit@gmail.com)
Professor, Centre for Economic Studies and Planning, School of Social Sciences, JNU
K M Gopakumar, Legal Advisor, Third World Network