Pfizer executives might raise COVID vaccine prices

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Pfizer, one of the drug companies that has successfully brought a COVID-19 vaccine to market, is now considering charging more for that vaccine in the future. As CBS News reported, a top executive for the company suggested to investors that COVID-19 vaccine pricing could increase post-pandemic. As the report about the Pfizer vaccine noted, “The suggestion raises questions about whether a drug, developed at the behest of the federal government to respond to a global crisis, could turn a profit for one company.” 

Carter Lewis Gould, a senior analyst for Biopharma Equity Research at Barclays, asked about the possibility during a Barclays-hosted virtual global healthcare conference held the week of March 8. Gould, in referencing comments made by Pfizer executives during the summer of 2020, asked whether Pfizer might pursue “higher pricing” as “we move from a pandemic to an endemic phase,” according to an edited transcript of the conversation. 

Frank A. D’Amelio, Pfizer’s chief financial office and executive vice president of global supply, responded by saying the company sees a “significant opportunity” for its vaccine “from a pricing perspective” as the world moves “from a pandemic situation to an endemic situation.” 

“So if you look at how current demand and current pricing is being driven, it’s clearly not being driven by what I’ll call normal market conditions, normal market forces,” D’Amelio observed. “It’s really been driven by kind of the pandemic state that we’ve been in and the needs of governments to really secure doses from the various vaccine suppliers.” 

“So what we believe, what I believe is, as we move from a pandemic state, from a pandemic situation to an endemic situation, normal market forces, normal market conditions will start to kick in,” he continued. “And factors like efficacy, booster ability, clinical utility will basically become very important, and we view that as, quite frankly, a significant opportunity for our vaccine from a demand perspective, from a pricing perspective, given the clinical profile of our vaccine.” He went on to say, “We think as this shifts from pandemic to endemic, we think there’s an opportunity here for us.”

Insider added a further observation from D’Amelio impacting the market: The belief that vaccination will be a recurring, possibly even annual, event. 

Pfizer is planning to ramp up vaccine production and supply chain capabilities by the end of July 2021. The company finalized a $1.95 billion deal to provide the U.S. government with 100 million doses of its COVID-19 vaccine in July 2020. That order was later doubled as the result of a $2 billion deal with the Trump Administration in December. 

John LaMattina, writing in Forbes, cautioned Pfizer about making this move, prefacing it with an analyst speculating that “Pfizer could be targeting a price three to four times higher, as much as $156 per treatment,” while showing that the pharmaceutical industry has reversed public perceptions over the past year, citing a 32% favorable rating in a Harris Poll from last year vs. nearly two-thirds approval now. 

“A sudden, dramatic increase in the cost of the vaccine will certainly damage the industry’s image—almost like the industry would be performing a ‘bait and switch’ operation,” he wrote. “Such a move would result in politicians calling industry executives to testify on Capitol Hill about how the company can justify such increases at the expense of the American public. All the accrued goodwill will be lost.” 

Still, if Pfizer wants to make a profit from the COVID vaccine once the pandemic is finished, increasing the price would be one way to do it.

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Sources: CBS News, Insider, Forbes

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