Coronavirus Drug Could Cost 750% More Than a Flu Shot

A potential coronavirus treatment developed by Gilead Sciences could cost up to 750% more than a flu vaccine. This could constrain containment.
Posted in: Headlines
Published:
March 6, 2020 1:41 AM UTC
  • A potential coronavirus treatment developed by Gilead Sciences won’t come cheap.
  • The resource-constrained developing world would be especially hard hit if the respiratory illness gets out of control.
  • Biotech stocks have enjoyed a rally in the wake of the outbreak.

Coronavirus has been, rightly or wrongly, compared to the flu based on a similar set of symptoms. President Donald Trump even reportedly enquired from a biotech CEO whether a flu shot could work as a COVID-19 vaccine.

Well, no.

And not only is a confirmed cure and a vaccine for COVID-19 not yet available, but it is likely to be prohibitively expensive when it arrives. At least if recent estimates are anything to go by.

Coronavirus drugs won’t come cheap

According to a Wall Street firm, one of the potential drugs for the respiratory disease caused by coronavirus could cost up to 750% more than flu treatments.

Per Oppenheimer analyst Hartaj Singh, the coronavirus drug being tested by biotech firm Gilead Sciences (NASDAQ:GILD) could cost between $50 and $100 a patient.

That’s substantially higher than the typical cost of an influenza vaccine, which ranges between $11.67 and $18.19 based on the Centers for Disease Control and Prevention price list.

Flu vaccines typically cost less than $20 per person. | Source: CDC

That means a coronavirus drug could be more than 750% more expensive than the cheapest flu vaccine.

Can the world afford Gilead Sciences’ remdesivir?

If the ongoing clinical trials of remdesivir are successful and the pricing estimates are correct, the government funds allocated to fighting the coronavirus outbreak would be highly inadequate.

That would be even more obvious if the outbreak reaches pandemic proportions and a need for a mass vaccine or cure emerged.

The International Monetary Fund (IMF) has provided $50 billion to low-income and emerging market countries to assist in fighting the outbreak. But at a theoretical price of $100 per dose, the funds would only be enough to vaccinate or treat 500 million people. This is just a fraction of the total number of people in poor countries – and fails to account for other related costs.

Per the United Nations, the total population of “least developed” countries, “landlocked developing” countries and “small island developing” states was 1.625 billion in 2019.

The population in the most vulnerable areas of the developing world is above 1.6 billion. | Source: UN

The World Bank has pledged $12 billion in emergency aid to developing countries. Assuming no other costs, this would cover just 120 million doses of a $100 coronavirus drug.

In the U.S., Congress recently allocated $8.3 billion in emergency funds to fight the coronavirus. If this amount were to be spent entirely on availing remdesivir to the population, it might only cover 83 million Americans.

COVID-19 outbreak boosts Gilead Sciences’ stock

In late February, Gilead announced that it had started testing its investigational compound known as remdesivir as a treatment for COVID-19. Remdesivir had previously shown promise in other coronaviruses that resemble COVID-19 in structure. Two Phase 3 clinical studies are currently underway.

Since the announcement of remdesivir being a potential cure, GILD has surged, defying a broader downturn in the stock market.

Coronavirus is pummeling the stock market, but not Gilead Sciences. | Source: Yahoo Finance

Other biotech firms that are currently working on a coronavirus cure include Moderna, (NASDAQ:MRNA) and Novavax (NASDAQ:NVAX).

Josiah Wilmoth, Sam Bourgi edited this article for CCN.com. If you see a breach of our Code of Ethics or Rights and Duties of the Editor or find a factual, spelling, or grammar error, please contact us.

Last modified: June 13, 2020 12:25 AM UTC

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Mark Emem @wetalkmarkets

I cover business and the stock market for CCN. Currently based out of Nairobi, Kenya. Feel free to get in touch with me. Email: wetalkmarkets[at]yahoo.com