The US government will pay as much as $1.19 billion to Eli Lilly and Co to secure nearly 1 million doses of its experimental Covid-19 antibody treatment, a drug similar to a treatment that US President Donald Trump received.
Lilly will start delivering 300,000 doses of the treatment, for which it is being paid $375 million, within two months of receiving an emergency use authorization from the US health regulator, the company said.
After that, the government has an option to buy an additional 650,000 vials for $812.5 million, the US Department of Health and Human Services said in a statement.
The price per dose amounts to $1,250 as per the contract, but the vials purchased by the government will be free to the American public.
The US has also signed deals with AstraZeneca and Regeneron Pharmaceuticals for their antibody therapies, under Trump administration's Operation Warp Speed program.
The deal with Regeneron covers the cost of manufacturing, while the deal with AstraZeneca also includes support for development.
While vaccines are seen critical to ending the pandemic, governments are increasingly looking at other effective treatments to slow the spread of the virus and kick-start economic activity.
The company submitted a request to the US Food and Drug Administration earlier this month for emergency use authorization of the drug to treat mild to moderate Covid-19 patients. The drug had a recent setback after it failed to show benefits in hospitalized patients.
In addition, Reuters reported that US drug inspectors uncovered serious quality control problems at an Eli Lilly plant that is ramping up to make its antibody therapy.
The antibody therapy is similar to a drug from Regeneron that was given to Trump during his bout with Covid-19.
The treatments belong to a class of drugs called monoclonal antibodies that are manufactured copies of antibodies created by the body to fight against an infection.