Although the rapid development of coronavirus vaccines—made possible by large infusions of public resources—has given Big Pharma companies "a boost in goodwill... the public is still sensitive to drug pricing and the reputational risk has, so far, curtailed their ability to reap large financial rewards," Fang noted. "But that environment, they hope, will change once the pandemic ends: a date that drugmakers themselves reserve the right to declare."
Many epidemiologists expect the coronavirus to become endemic, "and as Covid-19 mutations continue to spread and booster shots may be required on a regular basis, leaders from the three companies are enthusiastic about cashing in," wrote Fang.
"As this shifts from pandemic to endemic, we think there's an opportunity here for us," Pfizer's Chief Financial Officer Frank D'Amelio said during a recent healthcare conference sponsored by Barclays Bank. The potential need for booster shots, D'Amelio added, provides "a significant opportunity for our vaccine from a demand perspective, from a pricing perspective, given the clinical profile of our vaccine."
According to Fang, "Moderna and Johnson & Johnson have also pledged affordability for their vaccines for the duration of the pandemic but have indicated to investors that they plan to return to more 'commercial' pricing as early as later this year."
The three companies behind the approved Covid-19 vaccines, which are "already poised to be some of the most lucrative drugs of all time," expect to "bring in billions in profit this year alone," Fang noted.
That's true, Fang added, even though "the U.S. government has fully financed the research and development" of Moderna and Johnson & Johnson's vaccines, while Pfizer's vaccine "was developed in partnership with BioNTech, a company that received nearly $500 million in development assistance from the German government."
According to Fang:
Pfizer, one of the early global leaders in the vaccine race, is very clear about the enormous moneymaking opportunity they see in the vaccines. D'Amelio, the company's CFO, spoke on a Zoom call last Thursday at the Barclays Global Healthcare Conference, to discuss the issue.
Carter Lewis Gould, an analyst with Barclays Bank, noted that Pfizer faced the particular challenges with "optics" but asked when the company could "pursue higher pricing down the road."
The current pricing, said D'Amelio, is "clearly not being driven by what I'll call normal market conditions, normal market forces," but rather the "pandemic state that we've been in and the needs of governments to really secure doses from the various vaccine suppliers." Once the pandemic ends, he continued, there will be "significant opportunity" for Pfizer.
Pfizer has agreed to prices of $19.50 per coronavirus vaccine dose in the U.S. and almost $64 per dose in the European Union, leading to projections that the company would bring in "$15 billion this year alone from sales, of which $4 billion would be purely profit," Fang wrote. But "those revenue projections are based on prices largely negotiated with governments under pandemic conditions, which could soon change."
As Common Dreams has reported, drugmakers have faced pressure from dozens of lawmakers and hundreds of civil society groups who are demanding that vaccine recipes be shared with manufacturers in developing countries, where inoculation rates are far lower. A failure to boost global vaccine production, experts say, will prolong the pandemic—exacerbating needless economic suffering and preventable deaths and possibly undermining the efficacy of vaccines as variants emerge.
Through its massive army of lobbyists, Big Pharma has been fighting calls to regulate drug prices as well as the India and South Africa-led proposal—supported by 70% of the U.S. public but opposed by President Joe Biden and the leaders of other wealthy nations—to temporarily waive the World Trade Organization's patent protections, which currently enable a handful of private companies to monopolize knowledge and technology related to coronavirus tests, treatments, and vaccines.
Fang wrote that Pfizer's Chief Executive Officer Albert Bourla told investors during a call that "the company had little to worry about in terms of political opposition."
"We believe the industry has generated a great deal of goodwill with Congress and public opinion through our Covid-19 treatment and vaccine efforts," said Bourla.
During last week's Barclays Bank-hosted healthcare conference, Fang wrote, Moderna President Stephen Hoge said that "post-pandemic, as we get into those what I will call seasonal epidemics that you would expect to happen with a SARS-CoV-2 virus, we would expect more normal pricing based on value."
And at the Raymond James Institutional Investors Conference earlier this month, Fang noted, Johnson & Johnson's Executive Vice President Joseph Wolk told investors that the company would "reevaluate the vaccine for 'pricing that's much more in line with a commercial opportunity' when the pandemic is over."
As Fang reported:
Wolk noted that the end of the pandemic is a "fluid" question. The announcement, Wolk said, would come down to a percentage of people vaccinated, though he did not give any specific figures. The "pandemic period will be in place for the majority of this year, if not the entire piece of this year," he continued, before making it clear that the declaration would be left to Johnson & Johnson.
"I think when we look at it, it's not going to be something that's dictated to us," said Wolk.
The end of the pandemic may be declared by the World Health Organization or other international bodies. Drug firms, however, are not under a legal requirement to make prices based on the WHO's determination.
Achal Prabhala, coordinator for the AccessIBSA project, which advocates for access to medicines, told Fang that "Americans are amazed that they're getting vaccines for free. And of course they're not because they've already paid for them once and now they're amazed that they're not paying for them twice."
"Companies like Pfizer, which has not made the vaccine available to 85% of the world's population, are enjoying immense popularity in the U.S. and Europe because of the fact that they got the vaccines done fast, and they seem to work well," Prabhala continued. "That's an unusually good position for pharma, they're not used to being thought of as saviors."
"It's pretty interesting," he added, "that they are now waiting for the opportune time to raise prices once enough people have been vaccinated."
Big Pharma's profit-maximizing behavior, as documented in The Intercept's new reporting, is part of a long-standing pattern.
For instance, hospitalizations skyrocketed last year, but routine visits to the doctor's office and demand for new prescription medications fell sharply as a result of the pandemic. As Common Dreams reported at the time, the pharmaceutical industry planned to make up for lost revenue by raising prices on more than 300 drugs in the U.S. on January 1.
"Big Pharma's greed is a danger to public health," Reps. Pramila Jayapal (D-Wash.) and Mark Pocan (D-Wis.) said last summer, when Gilead announced that it would charge U.S. hospitals $3,120 per privately insured patient for a treatment course of remdesivir, a Covid-19 drug whose development was financed in large part by taxpayers.
Last week, before the latest reporting on Big Pharma's plans to raise Covid-19 vaccine prices in the coming months, Sen. Bernie Sanders (I-Vt.) urged Biden to join the more than 100 countries that support an emergency waiver of the WTO's restrictive intellectual property rights agreement.
"It is unconscionable," said Sanders, "that amid a global health crisis, huge multibillion dollar pharmaceutical companies continue to prioritize profits by protecting their monopolies and driving up prices rather than prioritizing the lives of people everywhere, including in the Global South."
