Covid Drug Prices Need U.S. Controls to Prevent Gouging, Employers Say

The U.S. government should set prices for coronavirus vaccines and therapies to prevent gouging, a coalition of companies and other employers said.

Medicare, the health program serving older Americans, should determine fair prices for Covid-19 drugs and inoculations that would also be paid by companies, organizations and individuals,Employers’ Prescription for Affordable Drugs said in a statement. The group citedGilead Sciences Inc.’s remdesivir antiviral as an example of an overpriced therapy.

Employers are growing increasingly uneasy about their share of the treatment costs for rising numbers of patients with Covid-19, more than 90,000 of whom are now hospitalized in the U.S. alone. Remdesivir, one of the few coronavirus treatments, costs private health plans more than $3,000 per treatment course, the group said. The World Health Organization has said there’s noevidence the drug reduces patient deaths.

“We are very concerned about price gouging for the vaccines and treatments,” Elizabeth Mitchell, chief executive officer of the Pacific Business Group on Health, a member of the coalition, said in an interview.

A spokesman for Gilead didn’t comment on the group’s statement and referred to the company’s earlier explanation of its pricing. Gilead said in June that the price for the drug, now sold under the brand name Veklury, was set to ensure that it would not impedeaccess for patients. The price is lower than expected savings from patients being released from earlier from hospital, the company said at the time.

The U.S. government’s$18 billion Operation Warp Speed program has supported the development and manufacture of several coronavirus vaccines and therapies and paid for hundreds of millions of shots it will allocate to states. Health plans and individuals may have to pay fees for administering the vaccines.

Employers are also concerned about the costs of Covid-19 treatments and vaccines on an ongoing basis once the doses the government has already paid for are exhausted, Mitchell said.

“These drugs and therapeutics were developed with significant federal investment,” she said. “We think that needs to be reflected in the pricing.”

Employers have sought to address health-care costs before, but rarely have they called for such direct government intervention in prices. The U.S. doesn’t typically set prices for retail drugs, even for its public Medicare program, where benefits are managed by private health plans. Employers and the drug plans they contract with negotiate prices with drugmakers.

About half of Americans, 158 million, get health coverage through employer plans, according to data from the Kaiser Family Foundation. The Employers’ Prescription group includes both private employers and public agencies. The group’s position does not necessarily reflect that of each member company.

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