The state treasurers of Pennsylvania and Rhode Island, along with United Church Funds, have filed a shareholder proposal calling on biotech firm Gilead to create an independent board chair after it was accused of selling COVID-19 treatment remdesivir for more than 500 times what it costs to make.
The shareholder proposal filed by Pennsylvania Treasurer Joe Torsella and Rhode Island Treasurer Seth Magaziner says an independent board chair would ensure Gilead management is held accountable for any mistakes or misconduct that harm patients and investors, and it cited as an example the company’s pricing of remdesivir.
The treasurers also questioned the effectiveness of the only antiviral drug approved by the US Food and Drug Administration (FDA) to treat COVID-19. They cited a National Institute of Allergy and Infectious Diseases clinical study that found that remdesivir did not reduce fatalities and only modestly shortened the length of hospitalization. They also noted that remdesivir was an existing drug that was repurposed to combat COVID-19, and that it was initially funded by at least $70 million in US taxpayer dollars as an antiviral drug to fight Ebola.
“Gilead had the opportunity to provide this treatment—developed with taxpayer dollars—equitably and fairly,” Torsella said in a statement. “Nearly a year since the first coronavirus case and months since remdesivir was approved to treat patients, Gilead continues to force families and our health care system to pay exorbitant prices for a drug that still hasn’t been proven [effective] in reducing fatalities.”
Torsella said a system of checks and balances on management is needed to “strengthen the oversight of decisions that affect families and improve long-term shareholder value.”
The treasurers cited a study from the Journal of Virus Eradication that calculated that it costs Gilead approximately $1 to produce a vial of remdesivir for which its charges $520 each, or $3,120 per treatment course for US patients with private insurance. The study also estimated that the company charges $390 per vial or $2,340 per treatment course for patients with government insurance.
They also cited another report that estimated that if Gilead were to price remdesivir at just one-eighth of its current price, the company would still receive between $247 million and $1.4 billion in net profit for sales in the US alone.
“It’s unconscionable for a drug company to price-gouge patients in need of medicine that could help them, particularly during a global pandemic,” Magaziner said in a statement. “It is time for an independent board chair to be appointed to strengthen oversight of the company.”