|WASHINGTON, DC — While COVID-19 has claimed more than 110,000 American lives, it’s business as usual for Wall Street and Big Pharma. In a new blog post, Patients For Affordable Drugs examines how drug corporations and Wall Street together push for high prices on COVID-19 treatments and vaccines developed with taxpayer support.
The piece looks at two COVID-19 drugs that received millions of dollars from U.S. taxpayers to aid the products’ development. As the government pumped $483 million into Moderna and its potential COVID-19 vaccine showed promise, the company’s stock price soared to record highs as Wall Street anticipated large profits for the company. Meanwhile, a leading financial analyst pushed for Gilead’s remdesivir, the recipient of significant taxpayer funds, to be priced at $5,000 per treatment and raised the target price for the stock by 10 percent.
“This is how stock valuation drives high drug prices. Once a rich valuation is set, the forces are in motion: Consumers are destined not to pay a fair price, but rather an amount closer to the maximum price analysts have told pharma they should try to get away with,” write David Mitchell, a cancer patient and the founder of Patients For Affordable Drugs, and Juliana Keeping, the organization’s communications director and mom to a child with cystic fibrosis.
For Gilead, this dynamic is nothing new. Gilead paid inflated stock prices for two companies — one with a hepatitis C drug and another with a cancer treatment. Then, Gilead set excessively high prices of $84,000 and $373,000 for the medicines, respectively — prices that would justify the high stock prices paid in the acquisition and yield profits far in excess of what the industry says it costs to develop new drugs.
The blog calls on Congress to embrace bipartisan legislation to ensure COVID-19 drugs with taxpayer investment are priced reasonably and offer investors fair, though not exorbitant, profits.
Today’s piece is the fifth in a P4AD series that outlines the investment U.S. taxpayers have made into COVID-19 treatments. In our previous blogs, we detailed how U.S. taxpayers are fueling Moderna’s COVID-19 vaccine with nearly a half billion dollars; explained why Johnson & Johnson’s claims of selling a not-for-profit COVID-19 vaccine are more than a little misleading; tracked taxpayer funding flowing to drug companies for COVID-19 vaccines and treatments; and demonstrated how Big Pharma only became interested in investing in vaccine development after it realized it could reap large profits. Patients For Affordable Drugs does not accept contributions from any organizations that profit from the development or distribution of prescription drugs.
Read the full post here.