On Wednesday, Duke Health announced that it had joined a national study to test a potential therapy for COVID-19, the illness caused by the novel coronavirus. 

The study will allow hospitalized adults with significant symptoms who choose to participate to receive either an antiviral medication called remdesivir—which showed promise with SARS and MERS, diseases that sprung up last decade from other coronavirus strains—or a placebo. 

“Duke’s participation in this national study creates an extra option for potential patients in our community who have serious complications from COVID-19,” Dr. Cameron Wolfe, the study’s principal investigator, said in the release. “Currently, there are no approved therapies for this disease, so we are eager to contribute in any way to help find ways to fight this global pandemic.”

A potential treatment for COVID-19, a disease that has already killed more than 21,000 people worldwide and is likely to kill tens or hundreds of thousands of Americans this year, would be welcome news to a country eager to reopen an economy that saw a record-shattering 3.3 million jobless claims last week. 

If the drug succeeds, remdesivir stood to be extraordinarily expensive—and extraordinarily profitable for its well-connected manufacturer, the California-based Gilead Sciences—under a sweetheart deal that President Trump’s Food and Drug Administration gave Gilead on Monday. 

By Wednesday, however, Gilead had caught so much heat from public health and consumer advocates that it asked the FDA to rescind the deal—something that almost never happens. 

As The Intercept reported, on Monday, Trump’s FDA granted remdesivir “orphan drug” status, a classification that entitles Gilead to seven years of exclusive control of the drug—in other words, no generics to eat into its profits in the United States. Gilead will also have complete control over its price. 

“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’ drug has been designated an orphan,” The Intercept reported. 

A few hours before the FDA’s decision was announced, Gilead abruptly said it would no longer provide hospitals with emergency access to the drug, citing a shortage of supply amid surging demand. Right after the announcement, its stock price soared. 

The problem is that remdesivir is simply not an orphan drug. 

The 1983 Orphan Drug Act provided incentives for pharma companies to work on treatments for very rare diseases—drugs for which companies couldn’t expect to recoup their research investments. Beyond the seven years of monopolistic control over supply and pricing, orphan drugs also qualify for grants and tax credits covering 25 percent of the cost of clinical trials. 

As a global pandemic that has invaded six continents and infected a half-million people in a little over two months—while showing exponential growth in the U.S., which now has nearly 70,000 cases, up from 9,000 a week ago—COVID-19 is not that. Indeed, the Orphan Drug Act specifies that the classification can only be extended to drugs that treat diseases that will affect fewer than 200,000 Americans.

But there’s a loophole. Orphan status can be granted to a drug before a disease crosses the 200,000-person threshold. That’s what the FDA did—even though remdesivir was developed with at least $79 million in government funding during the Ebola crisis. 

If you’re wondering why that happened, here’s one possibility: “Gilead Sciences … maintains close ties with President Donald Trump’s task force for controlling the coronavirus crisis,” according to The Intercept. “Joe Grogan, who serves on the White House coronavirus task force, lobbied for Gilead from 2011 to 2017 on issues including the pricing of pharmaceuticals.”

But amid a fierce backlash and likely legal challenges, Gilead asked the FDA on Wednesday to revoke its orphan drug status: “Gilead is confident that it can maintain an expedited timeline in seeking regulatory review of remdesivir, without the orphan drug designation,” the company said in a statement. “Recent engagement with regulatory agencies has demonstrated that submissions and review relating to remdesivir for the treatment of COVID-19 are being expedited.”

Still, this sort of exploitation of the Orphan Drug Act isn’t unusual, The Intercept reports: 

“Although the Orphan Drug Act was designed to solve a real problem—a lack of treatments for uncommon illnesses—pharmaceutical companies have for years exploited it for gain. Rather than treating AIDS or HIV infection, drugs were framed as treating diarrhea or tuberculosis in HIV-infected people, thus narrowing their scope. And companies have extended their exclusive marketing rights by repurposing drugs that are already patented for other purposes to treat rare diseases. Orphan drugs now generate more than $100 billion in annual sales, and even though companies are increasingly using the law, more than 90 percent of rare diseases lack treatments approved by the FDA.

“The Orphan Drug Act has helped pharmaceutical industry profits soar. In 2018, the median cost for a year of treatment with an orphan drug was $98,500 compared to $5,000 for drugs that don’t have the designation, according to Gerald Posner, author of Pharma: Greed, Lies, and the Poisoning of America.”

Contact editor in chief Jeffrey C. Billman at jbillman@indyweek.com. 

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