The companies are including extra doses of vaccine in some of the vials. They seem to be acting responsibly. It’s still a business and there’s considerable expense in R&D. It’s quite remarkable they developed three vaccines so quickly.
Don’t get me wrong - my entire career was in the pharmaceutical industry, so I’m far from wanting to demonize the Big Pharma Bogeyman. With an eye on vaccine development over the last year, I’ve felt a mixture of pride at the phenomenal speed at which vaccines have been developed, concern over the (very necessary) haste, and worry about what would happen about pricing. In the end, I’m overall extremely happy with what my guys have achieved (and are continuing to achieve). I would be happier still if Pfizer reined it in a bit, but they’re not being monstrous. And bless J&J and AZ for setting a great example.
We have unprecedented speed of development of a safe and effective drug that will be delivered to hundreds of millions of people, save millions of lives - not just those saved directly, but those saved by getting the world back to normal that much earlier. Restoring economic output that much earlier could be worth $ trillions. Put any reasonable dollar value on the improvement in quality of life by ending lockdown that much earlier, and multiply that by hundreds of millions of people.
Okay, that’s true of all the vaccines, not just Pfizer. But $13 billion is a rounding error in all this. Ten times that would be perfectly reasonable.
I agree setting a responsible price for essential drugs and vaccines requires a lot of planning. A start up like Moderna needs revenue to grow and expand. The bigger and more established companies can focus more on public goodwill.
Price gouging is never acceptable, especially in a pandemic.
I substantially agree - I hope my second post in this thread (#5) made my position clear.
I assume the cost of production of (say) Pfizer vaccine is not 10x that of (say) AZ vaccine*, and that the price they charge represents significant profit. I would like to see Pfizer use some of that profit to support Covax. Fingers crossed.
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(*) - I’m sure it costs a bit more - I’ll see if I can find some figures.
Pricing from multiple sources. Anyone has better data, please feel free to correct me - you would have thought this was a simple question to answer, but I’m not finding it so.
AZ - $4.00 - $5.50 per dose. (hypothetical in the US I guess, as it hasn’t been authorised yet (correct?)
Pfizer - $19.50 per dose
Moderna - $25 - 37.00 per dose - the reports for Moderna are highly variable
All regimes are 2-dose, so we’re comparing like with like.
While it’s difficult to arrive at the margin figures at this point, given the manufacturing and development partnerships involved and variable pricing of the vaccines, it’s likely that the vaccines will be lucrative for a couple of reasons. Firstly, both Moderna and Pfizer use a new technology called mRNA, which is likely to offer meaningful cost benefits compared to traditional vaccines, as the manufacturing process is less capital intensive and relatively simpler and the doses are usually small. (see our note on mRNA manufacturing below). Secondly, both vaccines are more expensive than rivals. Pfizer’s vaccine will be priced at about $19 per dose, based on a supply agreement with the U.S. government, while Moderna’s shot will be priced at as much as $37 per dose. In contrast, the AstraZeneca vaccine is expected to be priced as low as $4. Both companies have also built relatively large order books for their vaccines, giving them the scale required to bring costs down. Pfizer’s shot has about 1.3 billion pre-orders so far, while Moderna’s shot has about 800 million pre-orders.
So: Forbes reckons that the cost of production is lower (which slightly surprises me) and the price (much) higher for Pfizer and Moderna compared to AZ.
If every single human on Earth were given the most expensive drug at the highest estimated price ($37 per dose or $74 for both doses), we could fully vaccinate the planet for $518 billion dollars. As @Riemann noted, numbers like this are rounding errors when compared to the cost of not doing it.
I don’t know why anyone is talking about whether something is a “bargain” or not. The question is simply whether or not the developers are getting a higher percentage profit after costs are deducted than they would need to produce any other drug.
If so, then they are taking advantage of the situation in the same way we decry it as unethical when they take advantage of someone absolutely needing a drug lest they die to keep the prices high.
I mean, they could just look at how much the pandemic has already cost every country, cut that in half, then divide by the number of needed doses, and set that as a the price. That would still be a “bargain,” but most people would find that unethical. They want them to charge roughly what it cost to research and manufacture, plus some percentage that we think is acceptable for medicine. Or less, since the more the sell, the more money they make.
“We” - the UK or the US, say, can afford to do so at these prices; other countries, not so much. So if the “We” here implies that richer countries have a moral obligation to help out poorer countries, I’m with you. Hence COVAX, and hence my comment:
Actually the drug company wants that extra dose counted and have asked to amend their contract to account for that extra in their allotment (which they got), including going backwards (which is problematic). IIRC The going backwards will only be counted if they used the extra dose as some places followed the instructions which has 5 doses per vial - instead of 6 which is possible to get, other places didn’t have the correct needle to extract the extra dose (The problem there is each syringe still holds a certain amount of the vaccine after administration, after the plunger is fully plunged, that can not be recovered as a usable vaccine, bringing it back down to 5).
My impression is that the vaccines are dramatically underpriced (which is probably a good thing) relative to market value as a public health good, and we should not begrudge the pharmaceutical companies their profit.
I would personally be wiling to pay hundreds of dollars to get a shot now, or a month or two ago, versus having to (probably) wait several more months. I mostly agree with the ways in which its being rolled out (I probably should be at the back of the line; my risk is relatively low), but if there had been an option to pay three times as much for each dose and get, say, 50% more, we as a society should have taken it, and it would have been a bargain. And if that makes the PharmCos profit margins better, good for them.
When I went rummaging for profitability info (see upthread) some of the stuff I read seems to confirm this. I remember (no cite) reading that AZ’s zero profit position was a during-the-pandemic policy. Along the same lines, this (following) is a story with a cite:
Last week, Pfizer underscored both points, revealing its expectation of $15 billion in coronavirus vaccine revenue this year and hinting at post-pandemic prices higher than the current $19.50 a dose it charges.
“That’s not a normal price, like we typically get for a vaccine — $150, $175 per dose,” Pfizer’s CFO Frank D’Amelio said in a call with Wall Street analysts. “Let’s go beyond a pandemic pricing environment, the environment we’re currently in: Obviously, we’re going to get more on price.”
I’m not familiar with the source, but I found the quote in several places, so I’ll assume it’s correct.