Lies, Damn Lies and Statistical Spin

House Oversight Committee Chairwoman Carolyn Maloney recently pounced on Gilead Sciences, claiming the biopharma innovator is “charging an unconscionable price for a drug developed with millions in taxpayer-funded research.” Sen. Debbie Stabenow struck the same chord: “I intend to continue working to put an end to this and other practices that allow the drug industry to gouge families for life-saving prescription drugs.”


But Rep. Maloney and Sen. Stabenow have been loose with the facts. A Government Accountability Office report counters what the lawmakers imply about federal fingerprints on the highly effective COVID-19 treatment Remdesivir.


The truth is that Gilead spent more than a decade and significant private monies on drug discovery and development before federal agencies devoted a dime to the drug candidate. Gilead had begun patenting Remdesivir-related inventions years before a federal agency coughed up a penny. Private investment in Remdesivir is about 10 times what the government has put in.


Gilead began its privately funded, applied research in 2000. This led to Remdesivir. Between 2009 and 2013, Gilead synthesized and screened the chemical compounds in this drug candidate.


GAO reports that “. . . Gilead did not rely on any federal contributions in conducting its own research that led to the invention of remdesivir and invested $786 million in remdesivir R&D from 2000 through December 2020. Gilead representatives also told us that the company made substantial contributions to the research performed in the collaborations with federally funded scientists, which was corroborated in our interviews with others. For example, principal investigators of the NIH-funded coronavirus research told us that scientists at Vanderbilt University and the University of North Carolina at Chapel Hill worked in close collaboration with Gilead scientists. A principal investigator also noted that Gilead had dedicated substantial resources and maintained a coronavirus research team for several years prior to the COVID-19 pandemic when few others were interested in studying coronaviruses.”


The government has zero rights to the intellectual property associated with Remdesivir because Uncle Sam’s involvement led to no inventions. GAO says “remdesivir research supported or conducted by CDC, DOD, and NIH has not resulted in government patent rights, because, according to agency and university officials, the federal contributions to the research did not generate new patentable discoveries, and Gilead already had existing patents on remdesivir.”


The Defense Department’s analysis is instructive. GAO reports that DOD “determined that scientific work performed by USAMRIID scientists did not rise to the level of co-inventor status on any of Gilead’s remdesivir patents. MRDC officials told us that they reached this determination based on the following factors: (1) Gilead invented the remdesivir compound and determined that it had antiviral activity against hepatitis C virus prior to the company’s collaboration with DOD; (2) Gilead entered into its collaboration with DOD with rights to all remdesivir and other compounds it provided, and told USAMRIID scientists what the compounds should be screened for; and (3) when USAMRIID scientists performed antiviral testing of remdesivir against Ebola virus, they used standard tests and screening methods and did not come up with new types of tests or screenings.”


How much money did federal agencies put into Remdesivir’s preclinical research and clinical trials? Just $161.5 million between 2013 and 2020. Of that, the National Institutes of Health provided $109.2 million to underwrite three clinical trials. Of the NIH monies, it has provided $88.6 million over the past year for a phase 3 trial of Remdesivir’s use for COVID-19.


What did Gilead invest in development of Remdesivir? About 10 times what the government spent. “Gilead estimated its overall investment in remdesivir, as of December 2020, at $1.3 billion. According to the company, of the $786 million in R&D costs, Gilead spent $215 million on the discovery and development of remdesivir prior to 2020, of which $175 million is attributable specifically to R&D costs and $40 million to costs of supplying remdesivir for use in NIH clinical trials and other clinical and research settings. Gilead told us that in addition to the R&D costs the company spent $147 million to supply remdesivir for use in clinical and research settings and $318 million to expand remdesivir manufacturing and distribution capabilities, as of December 2020.”


The truth about Remdesivir tells us a lot about the lonely beginnings of inventive activities, the long road to invention, the years-later involvement of federal agencies, and the far greater sunk costs of private sector innovators compared with relatively modest government funds.


The real Remdesivir story illustrates how you get a quick success in a crisis. You spend a decade or so pouring in sunk costs and pursuing dead ends. Then years later, if the circumstances make it appear so, you have an “overnight” solution. In Gilead’s case, the past as prologue on COVID-19 involved tremendous private-sector investment in potential medicines for hepatitis, Ebola, SARS and MERS viruses.


The facts, which GAO ferreted out but demagogic politicians twist to fit their preconceived talking points, prove enlightening — and shed favorable light on Gilead and Remdesivir.


The late Sen. Daniel Patrick Moynihan famously said, “Everyone is entitled to his own opinion, but not to his own facts.” One wishes more lawmakers of today were as intellectually honest as Sen. Moynihan was.

Recent Posts

See All

Why Property Rights Matter, Part 4: How to Fight Back

How do we effectively fight to restore private property and our freedom of movement in America? Most think that just getting a president elected is the answer, but what if we lose that race? Or what i

11 Million U.S. Patents . . . and China’s Rising

The U.S. Patent & Trademark Office recently awarded the 11 millionth U.S. patent. It went to inventors of a medical device for positioning prosthetic heart valves. Arthur Daemmrich, director of the Le