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Drugmakers Promise Investors They’ll Soon Hike COVID-19 Vaccine Prices

THE U.S. PHARMACEUTICAL FIRMS behind the approved coronavirus vaccines — Johnson & Johnson, Moderna, and Pfizer — have quietly touted plans to raise prices on coronavirus vaccines in the near future and to capitalize on the virus’s lasting presence.

While the companies have enjoyed a boost in goodwill from the rush to develop vaccines, drug industry executives have noted, the public is still sensitive to drug pricing and the reputational risk has, so far, curtailed their ability to reap large financial rewards.

But that environment, they hope, will change once the pandemic ends: a date that drugmakers themselves reserve the right to declare. Pharmaceutical officials, speaking at recent conferences and on calls with investors, say they expect the virus will linger, morphing from a pandemic into a perennial 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.

“As this shifts from pandemic to endemic, we think there’s an opportunity here for us,” said Frank D’Amelio, the chief financial officer for Pfizer, at a conference. Additional factors, such as the need for booster shots, present “a significant opportunity for our vaccine from a demand perspective, from a pricing perspective, given the clinical profile of our vaccine.”

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 vaccines are already poised to be some of the most lucrative drugs of all time. The companies are expecting to bring in billions in profit this year alone, and all the major drugmakers with approved coronavirus vaccines received investments and backorders from government agencies.

The U.S. government has fully financed the research and development of several coronavirus vaccines, including those produced by Moderna and Johnson & Johnson, to the tune of over $2 billion. The U.S. has also provided nearly $2 billion in payments to secure doses of Pfizer’s vaccine, which was developed in partnership with BioNTech, a company that received nearly $500 million in development assistance from the German government.

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. Read Full Article >

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