United States Sets Global Benchmark for COVID-19 Vaccine Price Close to Flu Vaccine

(Reuters) – The United States government has set a benchmark for the price of the COVID-19 vaccine in a $ 2 billion deal announced Wednesday with Pfizer Inc (PFE.N) and the German biotechnology BioNTech SE (22UAy.F) which will likely pressure other manufacturers to set similar prices, industry analysts told Reuters.

The agreement, which depends on an approvable product, ensures a vaccine sufficient to inoculate 50 million Americans for about $ 40 per person, or on the cost of annual flu vaccines, and is the first to provide a direct window at probable COVID prices successful. 19 vaccines.

It also allows some drug makers to benefit from their efforts to protect people from the virus that has killed some 620,000 people worldwide, nearly a quarter of those in the United States.

Unlike other government-signed vaccine deals, Pfizer and BioNTech won’t collect a fee until their vaccine proves to be safe and effective in a major pivotal clinical trial expected to begin this month.

Governments in the US and other countries have reached agreements to support the development of the COVID-19 vaccine, some of which include guaranteed dose deliveries. But this is the first agreement to delineate a specific price for finished products.

“The average price of a flu shot is around $ 40,” said Peter Pitts, president and co-founder of the Center for Medicine in the Public Interest. “It looks good with that comparison. It is within the reasonable stage. ”

So far, the other major experimental vaccines have shown relatively similar data on safety and efficacy, suggesting that no pharmacist could charge much more than their peers, said Mizuho biotechnology analyst Vamil Divan.

The United States government has agreed to purchase 100 million doses of the Pfizer / BioNTech vaccine at a price of $ 39 for what is likely to be a two-dose treatment, or $ 19.50 per dose.

Health experts believe that effective vaccines are needed to break the pandemic that has plagued economies around the world. But they would have to be available to billions of people, and drug makers are under considerable pressure to avoid making big profits during a global health crisis.

At $ 40 per person, “manufacturers will certainly make a profit” and gross margins could be in the range of 60% to 80% in some geographic areas, SVB Leerink analyst Geoffrey Porges said. The gross margins do not include research and development costs, which Pfizer said could reach $ 1 billion for its vaccine.

Still, analysts and price experts said the price is on par with other common vaccines and is a good deal for governments, given the desperate need.

The deal “would provide important benchmarks for the price of the COVID vaccine,” Porges said, adding that vaccine manufacturers are likely to target a single price worldwide.

Pfizer, Moderna Inc (MRNA.O) and Merck & Co (MRK.N) Everyone has said they plan to sell their vaccines at a profit.

Governments and nonprofits are in a race to secure the supply of companies with promising candidates for the COVID-19 vaccine, although there is no guarantee that either will ultimately succeed.

Last week, Johnson & Johnson (JNJ.N) told Reuters that he is in talks for vaccine deals with the European Union, Japan and the Bill and Melinda Gates Foundation. [L2N2EN1FW]

Some drug makers, including J&J, have announced plans to price their nonprofit vaccines while the pandemic is ongoing, although J&J has not provided price details.

AstraZeneca Plc (AZN.L) agreed to provide the United States with 300 million doses of the vaccine that it is developing with researchers from the University of Oxford in exchange for $ 1.2 billion in seed funding.

Although the cost per dose comes in at around $ 4, far less than what Pfizer and BioNTech would receive, AstraZeneca can use some of that funding to offset research and development costs, even if its vaccine ultimately fails.