Gilead’s PRV Highlights Another Financial Windfall Coming to Covid Vaccine Developers
(Thursday, November, 2020] The FDA approval of Remdesivir carried another incentive for Gilead granted to anyone developing a product to treat or prevent Covid, the Priority Review Voucher (PRV), which is potentially worth hundreds of millions of dollars. This is the second PRV for a Covid product and practically every Covid vaccine and treatment developer would be eligible for the same PRV once approved by FDA. The PRVs were created more than a decade ago with an intent to incentivize developers of products that may not have large markets in the US such as those intended to treat tropical diseases. The justification was that without an added incentive, products for such diseases would be neglected. PRVs have since been created for products intended for pediatric populations, and in 2016 for “Material Threat Medical Countermeasures (MT-MCM)”. So far, four products have received MT-MCMs; one for smallpox treatment, one for smallpox and monkeypox vaccine, third for Regeneron’s anti-Covid antibody cocktail, and now Rendesivir. While smallpox treatments or vaccine clearly had little financial incentive to develop and PRVs were justified, the same cannot be said for Covid treatments. All Covid vaccines and treatments are promised exponential financial rewards not only in term of unimaginable market valuation and hundreds of millions to billions of dollars in non-dilutive public money, but future markets worth even more. Gilead has already made revenues close to a billion dollar in less than a year with much more to come. All the vaccine developers have guaranteed contracts worth gigantic returns to sell their vaccine even before FDA approval. So, should Covid developers get the PRV on top? The short answer is, Yes. We cannot change the rules after the game has begun. The PRVs were created long before we knew about Covid, and had a broad public support. This a classic case of right time and right product for an opportunity. Yes, it may seem unfair, even unethical, that companies making huge returns on their products, using significant public money, also get PRVs to add to their bottom lines, but that’s the business they are in. We cannot accuse them of making more profit so long as they play by the rules we created for them. For the sake of argument, the value of a PRV is about $70 – 130 million, which is a lot smaller when compared to the billions of dollars in public money already given to these companies. At least the PRVs will not be paid for with public money. |
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