Pfizer Should Be Wary Of Covid-19 Vaccine Price Hikes

In early July 2020, Elisabeth Rosenthal published an opinion piece in the New York Times warning of the biopharmaceutical industry trying to scandalously profit from a successful Covid-19 vaccine. Rosenthal went so far as to postulate: “If a Covid-19 vaccine yields a price of, say, $ 500 per course, vaccinating the entire population would bring a company more than $ 150 billion, almost all the profit.” Their price estimate was based on the fact that therapeutic vaccines, such as the meningitis B vaccine for young adults and the herpes zoster vaccine for older adults, have retail costs that range from $ 300 to $ 400.

The biopharmaceutical industry has performed superbly in its attack against the SARS-CoV-2 coronavirus and has already produced powerful vaccines against this virus from Pfizer / BioNTech and Moderna with another from J&J imminent. More vaccines are on the way. Additionally, dozens of therapeutics designed to treat the effects of Covid-19 are in advanced clinical development. It is no exaggeration to say that this is the most important medical achievement of the last century.

But, contrary to Rosenthal’s expectations, there has not been an excessive price increase for vaccines. The most expensive of the vaccines has been Pfizer’s, and that two-dose regimen is priced at $ 39. To put that in perspective, the price of the quadrivalent flu vaccine in 2020 ranged from $ 35 to $ 41 at places like Walmart, Walgreen’s and CVS, with “senior doses” (for those over 65) hovering around $ 70. Given the destructive effects Covid-19 has had on the economy, the new vaccines are a bargain. More importantly, they save lives.

For years, the biopharmaceutical industry has tried to show the value that the industry brings to global health and that the costs of these drugs, no matter how expensive they may seem, actually SAVE the healthcare system money by alleviating and even curing disease without the need for costly hospitalizations. But the efforts of the pharmaceutical industry fell largely on deaf ears. However, all that has changed with the success of vaccines and the promise of ending the pandemic. In a surprising reversal of fortunes, recent results from The Harris Poll show that nearly two-thirds of Americans now give the industry a thumbs up. A year ago, only 32% of Americans viewed the industry positively.

However, all the goodwill these efforts have generated may evaporate. A recent report has highlighted comments made by Pfizer CFO Frank D’Amelio that the company will “get more prices” once the pandemic subsides and we are no longer in a “pandemic price environment.” One analyst speculated that Pfizer could be targeting a price 3-4 times higher, as much as $ 156 / treatment. However, it is not clear if the coronavirus will decrease. There is already a need for modified vaccines to treat emerging variants. This could be addressed with a third dose of the existing vaccines or perhaps with a newly derived booster specific for the new variants. There is also the hypothesis that the coronavirus will be seasonal, like the flu, and that people will need to be vaccinated annually. The fact is, the American population will likely require additional vaccines for the foreseeable future.

A sudden and dramatic increase in the cost of the vaccine will certainly damage the image of the industry, almost as if the industry is running a “bait and switch” operation. Such a move would result in politicians calling on industry executives to testify on Capitol Hill about how the company can justify such increases at the expense of the American public. All accumulated goodwill will be lost.

Certainly, Pfizer should be able to increase the price of its Covid-19 vaccine, perhaps to the level of the highest prices for influenza vaccine. It should be noted that despite the billions in revenue that Pfizer will generate from its vaccine, its stock price has stagnated. You should be allowed to benefit from their incredible efforts. But Pfizer and the rest of the industry have dramatically changed the way the public sees it. Let’s not be criticized again for drug prices, especially with regard to Covid-19 vaccines.