The New Jersey-based pharmaceutical giant Merck is facing accusations of price gouging after it charged the U.S. over $700 per patient for a taxpayer-funded coronavirus treatment that, according to research, costs just $17.74 to produce.
Last week, Merck announced plans to request emergency federal authorization for molnupiravir after a late-stage clinical trial showed that a five-day course of the antiviral drug cut the risk of Covid-19 hospitalization or death in half in patients with mild-to-moderate cases.
The same day Merck unveiled the results of the trial and White House officials hailed the drug as another possible tool against Covid-19, the New York Times reported that “the federal government has placed advance orders for 1.7 million courses of treatment, at a price of about $700 per patient”—far more than the estimated cost of manufacturing the drug.
According to an analysis by Melissa Barber of Harvard T. H. Chan School of Public Health and Dzintars Gotham of King’s College Hospital in London, “the cost of production for molnupiravir capsules is US$1.74 per unit, or US$17.74 per five-day regimen.”
“Adding an allowance for 10% profit margin and taxes in India, we arrive at an estimated sustainable generic price of US$1.96 per capsule or US$19.99 per five-day regimen,” the researchers concluded.
Dean Baker, a senior economist at the Center for Economic and Policy Research, noted that the $712 price-per-course price the U.S. government is set to pay for molnupiravir amounts to a roughly 4,000% markup.
Quartz‘s Annalisa Merelli reported last week that with Merck expecting to produce 10 million courses of molnupiravir before the end of 2021, the company “could bring in revenue up to $7 billion.”
“This would make it, in only a few weeks, one of the 10 most lucrative drugs ever,” Merelli observed.
If authorized by the U.S. Food and Drug Administration, molnupiravir—which Merck developed in partnership with the Miami-based firm Ridgeback Biotherapeutics—would be the first antiviral pill approved to treat Covid-19, potentially a major breakthrough in the fight against the global pandemic.
But it’s unclear how accessible the treatment will be for people in the U.S. and around the world, given its cost and Merck’s monopoly control over production. Numerous countries, including Singapore and Thailand, are already racing to secure access to the drug.
“Governments must break Merck’s monopolies so generic companies can expand supply and slash prices globally,” said Asia Russell, executive director of Health GAP.
Heidi Chow of the Jubilee Debt Campaign decried the $700-per-patient price the U.S. government paid for molnupiravir as “another example of Big Pharma reaping billions from public investment into research by charging extortionate, rip-off prices for lifesaving Covid drugs.”
“This is why we need to waive patents on all Covid treatments and vaccines,” said Chow.
Courtesy Common Dreams
Jake Johnson
Jake Johnson is a staff writer at Common Dreams.
