Gilead will now handle distribution of its COVID-19 treatment Veklury in the U.S., taking over from the federal government as the company’s supplies of the drug finally exceed demand from hospitals.
Since May, when the Food and Drug Administration cleared emergency use of Veklury, the Trump administration has doled out more than 300,000 treatment courses of first donated and then commercially available supplies of Veklury to states, territories and certain federal agencies.
But the need for federally managed supply has waned, as Gilead ramped up its manufacturing and as COVID-19 cases in once hard-hit areas like New York ebbed. On a call Thursday, government officials noted that recently some states hadn’t accepted their full allocations of Veklury doses, citing lower need for the once extremely scarce drug.
Veklury, or remdesivir, was the first drug shown to help patients hospitalized with COVID-19 recover. Study results supporting Veklury’s benefit came in late April, when nearly 2,000 people in the U.S. were dying each day.
Hospitals were desperate for any treatment that could help, but the limited supplies of Veklury that Gilead had on hand weren’t nearly enough to cover demand. As part of the FDA’s emergency authorization, the regulator stipulated distribution would be managed by the federal government, which was supposed to allocate drug doses to states and hospitals most in need.
But the initial roll-out was chaotic. States that were then buckling under a surge of COVID-19 cases, like California, Texas, Florida and Louisiana, initially received no shipments of the drug. And in some states, like Massachusetts, drug doses seemed to be distributed to hospitals at random.
The Trump administration quickly changed course, allowing states to allocate to hospitals within their borders the drug supplies given to them by the federal government.
An initial 1.5 million Veklury doses that Gilead had stockpiled and then donated were quickly used up, and the drugmaker began charging for freshly manufactured vials. The company set Veklury’s price at between $2,340 and $3,120 for a typical five-day treatment course, a price lower than what some on Wall Street had expected but one still high enough to pencil in potentially more than a billion dollars in sales.
How lucrative Veklury sales are will be apparent in the coming weeks, when Gilead reports financial figures for the third quarter.
The U.S. government was Gilead’s initial customer, signing an agreement in June to buy roughly 500,000 treatment courses. Starting Oct. 1, however, Gilead will now sell supplies to wholesaler Amerisource Bergen, which will in turn sell directly to hospitals — similar to the standard process for drug distribution.
Gilead expects its production can now meet real-time demand, both now and in the future should cases rise further. By the end of the year, the company predicts it will have produced 2 million treatment courses.
Some of the doses initially secured by the U.S. government, but unused so far, will go to the National Institutes of Health for use in clinical trials, while others will go to the Strategic National Stockpile. Government officials would not specify amounts for either plan.
Veklury’s use is still governed by the emergency authorization granted by the FDA in May, a decision which was updated to reflect the new distribution process. Gilead expects to soon finalize its application for a full approval of Veklury, company Chief Commercial Officer Johanna Mercier said Thursday.
Originally developed for hepatitis C and then Ebola, Veklury is a broad-spectrum antiviral drug. Key study results showed treatment reduced the median time to recovery among hospitalized COVID-19 patients by four days compared to placebo, although the benefit on mortality was not conclusively determined.
Final results recently posted online to clinicatrials.gov showed 15% of placebo-treated patients died 29 days after drug administration, compared to 11% of Veklury-treated patients.