Merck Sells Covid Pill for 40 Times What It Costs to Do.

A five-day course of molnupiravir, the new drug called as a “big advance”With Covid-19 treatment, it costs $ 17.74 to produce, according to a report issued last week by drug pricing experts at the Harvard School of Public Health and King’s College Hospital in London. Merck charges the U.S. government $ 712 for the same cost of the drug, or 40 times the price.

Last Friday’s announcement that the new drug cut the risk of hospitalization in clinical trial participants with moderate or mild illness in half could have major implications for the course of coronavirus pandemic. Because it is a pill – as opposed to monoclonal antibodies, a comparable antiviral treatment given intravenously – molnupiravir is expected to be used more widely and, hopefully, will reduce the mortality rate. In the first 29 days of the trial, no deaths were reported among the 385 patients who received the drug, while eight of those who received a placebo died, according to a statement released by Merck and Ridgeback Biotherapeutics, the two companies that jointly launch it. .

In addition to having huge implications for health, the pill could bring alarming profits to both Merck and Ridgeback Biotherapeutics. A small Miami -based company, Ridgeback licensed the drug from Emory University in 2020 and two months later sold the global rights to the drug to Merck for an undisclosed amount. Although Ridgeback remains involved in drug development, some have described the deal as “flick. “

Like most drugs on the market, molnupiravir – which was originally investigated as a possible treatment for Venezuelan equine encephalitis – was developed using government funds. The Defense Threat Reduction Agency, a division of the Department of Defense, has provided more than $ 10 million of funding in 2013 and 2015 at Emory University, as research produced by nonprofit Knowledge Ecology International has revealed. The National Institute of Allergy and Infectious Diseases, part of the National Institutes of Health, also gave Emory more than $ 19 million in additional grants.

Yet only Merck and Ridgeback will get revenue from the new antiviral, that is according to in Quartz could bring in up to $ 7 billion by the end of this year. After the announcement of encouraging clinical trial results on Friday, Merck’s stock price climbed, while the stock prices of some vaccine makers sink. Despite its initial investment, the US government seems to be faced with a steep markup in prices. In June, the government signed a $ 1.2 billion contract with Merck providing 1.7 million courses of the drug at a cost of $ 712. The transaction must take place once molnupiravir receives emergency use authorization from the Food and Drug Administration.

Reasonable Terms

Good government advocates emphasize that because federal agencies spend at least $ 29 million on drug development, the government has an obligation to make sure the drug is affordable. “This drug is publicly funded, and therefore the public has certain rights, including the rights you have to have it available under reasonable terms,” said Luis Gil Abinader, senior researcher at Knowledge Ecology International.

In a interview on CNBC, Ridgeback co -founder Wendy Holman said the company requested but “never got government funding” to help make molnupiravir. A whistleblower complaint filed by Rick Bright, the former director of the Biomedical Advanced Research and Development Authority, or BARDA, in May 2020, described Ridgeback’s unsuccessful effort “to secure approximately $ 100 million” from BARDA to develop the drug as a Covid-19 treatment. The company’s statement about the study results also noted that “since Ridgeback was licensed, all funds used for the development of molnupiravir have been provided by Merck and by Wayne and Wendy Holman of Ridgeback.”

Abinader was critical of Ridgeback’s failure to recognize the government’s initial investment in the drug before the company acquired it. “What they want to do, it seems, is to shape the narrative about who paid for the development of this drug to avoid requests from the public to make it available at a reasonable price,” he said.

In an email response to questions submitted to Ridgeback Biotherapeutics for this article, Davidson Goldin wrote, “Ridgeback has not yet received any government funding for molnupiravir and self -funded the development of this drug for treatment. to SARS-CoV-2 without government financial support. ”Merck did not respond to questions about this article.

No Strings Attached

Merck has promised to make molnupiravir accessible worldwide and has already entered into licensing agreements with five Indian companies that make generic drugs. “Merck is committed to providing timely access to molnupiravir worldwide, whether it is authorized or approved, and plans to implement a one-tier pricing strategy based on the country’s revenue criteria to the World Bank to reflect relative child ability of countries to fund their health response to the pandemic, ”the company said in its announcement of test results on Friday. Indian companies plan to price the drug as low as $ 12 for a five -day course, according to until now reports.

In the US, and most likely in many upper -income countries and all high -income countries, the price will be determined by the market. Noting that treatment could be offered to people who are not yet seriously ill with Covid-19, health advocates fear that means some of these countries will not be able to afford the new drug. “Offering someone $ 700 of treatment when they haven’t already felt the disease means a lot of people won’t take it,” said Dzintars Gotham, a physician at King’s College Hospital in London and a fellow with- author of the molnupiravir pricing report. According to the report, pricing molnupiravir at $ 19.99 would allow a company a 10 percent profit margin.

Melissa Barber, a doctoral candidate at the Harvard School of Public Health and co-author of the report on molnupiravir, said that, while its pricing is not as extreme as some other drugs, it is likely that it will still put the antiviral beyond the reach of some who may benefit from it. “If you can’t afford the drug because it’s 1000 times more than you can afford, or because it’s 100 times more than you can afford, it doesn’t matter,” Barber said. “They’re both bad.”

Barber and Gotham acknowledge that the $ 17.74 cost of making a five-day course of antiviral pills is an estimate but said the algorithm they used, and are working to estimate production costs for hundreds medications, tend to result in overeating in the long run.

Meanwhile, prices charged by private companies for drugs tend to rise rather than fall. “For all the deals that happen for therapeutics or vaccines, the price only goes up because the uncertainty goes down,” he said. “A price is offered and then, for the next sale, the price goes up. The price goes up for other drugs and vaccines, so I’d be surprised if this price doesn’t go up,”

The difference in pricing should be based on request a better price under the Bayh-Dole Act, according to Abinader of Knowledge Ecology International. Bayh-Dole, passed in 1980, regulates the transfer of federally funded inventions to commercial property and allows the government to “march” and suspend the use of patents developed with government funding if determined. its that the products are overpriced.

“The pressure for the rights to march-around this drug is going to be overwhelming,” predicted Abinader, who suggested the government could use the law to lower the price of molnupiravir. “When Biden’s management negotiates another supply agreement with Merck, maybe they should use those rights to get a better price,” he said.

According to Gotham, based in London, the short story of molnupiravir has already joined the best and worst of the United States pharmaceutical system. “It was a great coup that the American government funded some scientists to come up with antivirals,” he said. “The great tragedy is that, after their great success, they just gave it to private industry with no strings attached.”

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