The Food and Drug Administration granted Gilead Sciences “orphan” drug status for its antiviral drug, remdesivir. Hours later, the FDA gave the drug orphan status. Almost immediately, Gilead’s stock price shot up. The designation allows the pharmaceutical company to profit exclusively for seven years from the product, which is one of dozens being tested as a possible treatment for Covid-19, the disease caused by the new coronavirus.
Experts warn that the designation, reserved for treating “rare diseases,” could block supplies of the antiviral medication from generic drug manufacturers and provide a lucrative windfall for Gilead Sciences. The 1983 Orphan Drug Act gives special inducements to pharmaceutical companies to make products that treat rare diseases. In addition to the seven-year period of market exclusivity, “orphan” status can give companies grants and tax credits of 25 percent of the clinical drug testing cost. Other pharmaceutical firms, including India-based pharmaceutical firm Cipla, are reportedly working toward a generic form of remdesivir, but patients in the U.S. could be prevented from buying generics with lower prices now that Gilead Sciences’s drug has been designated an orphan.
"Remdesivir is one of relatively few medicines that may prove effective in treating COVID-19 this year," said Peter Maybarduk, director of the government watchdog Public Citizen's Access to Medicines program. "The government should be urgently concerned with its affordability for citizens. Instead, the FDA has handed Gilead, one of the most profitable pharmaceutical corporations on earth, a long and entirely undeserved seven-year monopoly and, with it, the ability to charge outrageous prices to consumers."
"Gilead has gamed the system by rushing through its 'rare disease' orphan drug application," Maybarduk added. "Its action is disingenuous and outrageous."