LONDON: Investors betting on big profits from COVID-19 treatments may get an unwelcome surprise when Gilead Sciences Inc. reports quarterly results this month. Its remdesivir,
the first important coronavirus treatment, has not been used as much as first expected and faces complex insurance reimbursement issues.

Its best hope may be that the US and other northern hemisphere governments concerned about a winter spike in cases are beginning to stockpile the antiviral drug, which is also being tested in combination with experimental COVID-19 antibody therapies.
Remdesivir has become the standard of care for patients hospitalized with severe COVID-19. But many doctors remain wary of using it more widely, raising questions about lofty analyst sales forecasts for a drug that could eventually be eclipsed by newer treatments.
The World Health Organization on Thursday said its international trial of COVID-19 therapies found that remdesivir did not have a substantial effect on patients’ length of hospital stay or chances of survival. The study has not been reviewed by outside experts. Gilead, whose shares have fallen 22 percent since the US Food and Drug Administration authorized remdesivir for emergency use in May, said that the WHO findings are “inconsistent with more robust evidence.”
The company struggled to meet early demand and gave away around 250,000 courses earlier in the pandemic, when remdesivir was the only treatment proven to shorten hospital stays for severely ill patients.
Since then, low-cost steroids have demonstrated an ability to cut death risk in severely ill COVID-19 patients, and doctors question the medical value of using remdesivir for moderately ill patients.
Wall Street forecast $2.5 billion in worldwide sales of remdesivir this year, according to Refinitiv.

However, the US Department of Health and Human Services (HHS), which oversaw the drug’s second-quarter distribution, said hospitals only bought 32 percent of 500,000 available courses — worth about $500 million at $3,120 per course.
The EU in July purchased 30,000 courses worth another $74 million. The EU recently contracted for 500,000 remdesivir courses over the next six months, but the deal does not require purchases. Gilead sells and licenses
remdesivir to most of the world but is expected to get the vast majority of revenue from the US and Europe.
Johanna Mercier, Gilead’s chief commercial officer, acknowledged that “hospitalization rates were much lower than originally predicted.”
“A lot of people were worried about the supply and wanted to keep remdesivir for their worst-case patients,” she said.
She declined in an interview to discuss Gilead’s sales expectations, but said that some of the excess US supply was soaked up by HHS for stockpiling, and some was diverted to Europe.
The drug accounts for a fraction of Gilead’s product sales, which totaled $21.7 billion in 2019. But the company in July raised its 2020 outlook, implying remdesivir sales of up to $3 billion, according to analysts.
Public health authorities have said that COVID-19 patients are not being denied drugs because of cost, but US hospital incentives are complex.
Most commercial insurers as well as Medicare, the federal health plan for seniors, pay hospitals a flat per-patient rate for care, based on diagnosis.
That creates an incentive to “avoid keeping people in the hospital,” and makes a drug that shortens stays cost effective, said Richard Trembowicz, health care reimbursement specialist at ECG Management Consultants.
Medicare in March approved a 20 percent increase in its payment for hospital stays related to COVID-19 but does not reimburse directly for remdesivir, which costs $3,120 for a five-day course, or $2,340 for government purchasers.
US hospitals say the cost is not influencing clinical decisions. “The price is not outrageous enough,” said Katherine Perez, infectious disease pharmacist at Houston Methodist Hospital. “We are hoping it is getting patients out of the hospital sooner.” But, she added, “I don’t think the data supports using it in more mild infections.”
Still, the FDA in August expanded its remdesivir authorization to include patients with less-severe illness.
“I would use it in an elderly person or someone on a drug that suppresses the immune system,” said Dr. Rajesh Gandhi, an infectious disease physician at Massachusetts General Hospital in Boston. “For a 30-year-old doing well it would be less likely.”
Gilead’s Mercier said reserving remdesivir for patients who need oxygen “is not necessarily the best use” of the drug, since antivirals may work best early in an infection, before a virus has reproduced enough to cause damage.
The drug, which failed as a treatment for Ebola, is designed to prevent viruses from replicating and overwhelming their host’s immune system.
Meanwhile, Gilead is moving ahead with remdesivir development, including testing an inhaled formulation to see if it could help non-hospitalized patients.