The pharmaceutical giant that makes a promising COVID-19 drug has registered it as a rare disease treatment with US regulators, a status that can potentially be worth millions in tax breaks and competition-free sales.
What that specialty status will actually mean for the marketing or profitability of Gilead Science Inc’s experimental drug remdesivir is not clear.
The drugmaker did not immediately respond on Tuesday to requests for comment.
Experts who have studied the so-called “orphan drug” program have said that the company’s request — and the US Food and Drug Administration’s (FDA) decision to grant it — seem inappropriate given the rapidly expanding threat of the viral outbreak.
A financial analyst, though, called Gilead’s request “pretty standard.”
The FDA granted the status on Monday, according to the agency’s Web site.
If approved for coronavirus, Gilead Sciences would receive seven years of exclusive US marketing for the drug, and tax credits on its research and development costs.
The US Congress created the orphan drug program more than 35 years ago to encourage companies to develop drugs for niche diseases and conditions that might not otherwise be profitable.
However, since then, filing for orphan status has become a standard pharmaceutical industry tactic to extend the profitability of drugs and block competitors. Orphan drugs are also typically eligible for other special programs that speed up FDA reviews for approval.
The FDA defines a rare disease as one with fewer than 200,000 patients in the US.
In a statement on Tuesday, the agency said COVID-19 fit that criteria when the request was made.
There are more than 50,000 cases in the US, but many more expected in the coming weeks and months.
“It seems like a misuse of the Orphan Drug Act, even though technically it’s within the bounds of the law,” said Aaron Kesselheim, a Harvard Medical School health policy expert. “There’s no expectation here that this drug wouldn’t be able to generate appropriate revenue for the manufacturer.”
Kesselheim said a number of the early AIDS drugs also received orphan drug status in the 1980s and 1990s, but then went on to generate billions in sales.
However, Tyler Van Buren, a senior research analyst at the financial services firm Piper Sandler Cos, called Gilead’s filing “pretty standard.”
“It says nothing about profiting off of the pandemic, but it does provide protection if remdesivir turns into a business in subsequent years,” he said.
The orphan drug program has come under scrutiny from the media, Congress and government inspectors amid concerns that it is being misused to protect six-figure prices on specialty drugs.
About half of the 48 new drugs approved by the agency last year received orphan drug designation. Many were priced well above US$100,000 for a year’s supply, including drugs for cancer, muscular dystrophy and other genetic disorders.
The nonprofit Public Citizen group said in a statement that the US government should be “urgently concerned” with the affordability of remdesivir.
Gilead chairman and chief executive officer Daniel O’Day has previously said that the company has not discussed with any governments how much remdesivir will cost.
“The topic of pricing comes up once you know the medicine works,” he said.
Day earlier this month told a news conference with other drug industry executives that his company has been working on the drug’s development for a decade.
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