Sick elderly person wearing surgical face mask and being cared for by a clinician with stethoscope

A medication shown to shorten recovery times in severe COVID-19 cases will cost federal insurance plans such as Medicare $2,340 for a five-day course, reports the drugmaker.

Remdesivir received federal emergency use authorization in May and was then donated at no cost by Gilead Sciences to treat severely ill patients through the end of June. The company has now priced remdesivir “well below” the projected value of most patient treatments, wrote Daniel O’Day, chairman and CEO in an open letter published Monday. The pricing was set in part to speed the drug’s delivery by avoiding country-by-country price negotiations, he stated.

“Remdesivir … is the first antiviral to have demonstrated patient improvement in clinical trials for COVID-19 and there is no playbook for how to price a new medicine in a pandemic,” wrote O’Day.

But the drug may be overpriced considering that taxpayers have helped fund its development, some say. With that in mind, U.S. Representative Lloyd Doggett, a democrat from Texas, said it was “an outrageous price for a very modest drug.” 

In clinical trials, severely ill patients were shown to recover 31% faster than a placebo cohort when the drug was given relatively early in the illness. As yet, there are no drugs approved by the Food and Drug Administration to prevent or treat COVID-19.

Gilead has agreed that remdesivir be distributed to hospitals by the U.S. Department of Health & Human Services and the states through the end of September, 2020. Demand is expected to be high, supplies are currently limited, and federal officials wish to retain oversight, according to a Reuters report. In October, HHS will no longer manage distribution, the drugmaker reported.