How much does the average vaccine cost? How much profit per vaccine does the average vaccine manufacturer make?
An hour of googling has not helped me find the answer to this question. I’ve seen quotes for everything from a dime to a quarter to a few hundred bucks. My instinct is that each vaccine nets only a small profit but I haven’t been able to find the figures to back that up.
Thanks!
I don’t think this has any real answer. Vaccines are like any other product. The more of them you make and the longer they’ve been in production and the more advanced and refined the technology, the cheaper any individual dosage costs to make. Newer vaccines need to pay back the literally of billions of r&d and testing dollars that goes into their development. Vaccines for specialized diseases, like the different flus that strike every year, will cost more per dose than vaccines for single diseases that are perennial, like polio or measles. There is no such thing as an “average” vaccine, IMO.
For my personal opinion, all I care about is that vaccine makers make enough money to stay in business to do r&d for the next round of vaccines.
He’s correct. True, the “mark up” on a new, patented drug can often be huge, costing the company pennies while being sold for tens of dollars. BUT remember there’s a just as huge R&D and approval cost for those new drugs. And for every drug that does make it to market there’s at least 10 that don’t*, and the R&D costs for those must be added to the overhead for those that aren’t sold.
You can look up any publicaly traded companies Annual Report on the web, and it will show you their gross & net profits. By& large, drug companies do well, but hardly obscenely well. If they made HUGE gross profits, everyone would be buying their stocks, and that just isn’t happening.
The bonanza is when a drug is still on it’s patent, but goes OTC. It happens very rarely, however.
So, vaccines make no more profit overall than any other product.
I was just wondering how much profit a vaccine maker makes from a typical MMR or DTaP shot. I’d also like to know exactly how much profit a vaccine is made on the total number of shots in the average vaccine schedule. I may have to call the pharmaceutical companies directly and find out.
I personally think they’re entitled to make a reasonable profit. The product is completely necessary and it works largely as advertised. With vaccines like the hep b you’re actually talking about a product that can we know can literally prevent cancer. That’s certainly worth paying for.
Yeah, I’m sure they’re happy to give that information to every person who calls. Please share it with us once you have it.
Just a data point about pharmaceutical R&D costs…
Several years ago I attended a pharma conference where some top dog from the FDA gave the keynote speech—I remember very little except for one thing: He said that the average cost for a new drug (at the time) was $800 million.
That’s because the new drug has to pay for fourteen years of research and development as well as all of the stillborn products that, for example, were canned because of safety issues or efficacy issues early on.
Vaccines are a different beast from small molecules, but they still follow the general drug pipeline.
I don’t know what the cost is today, but it probably didn’t go down.
Well, most of the large companies are paying dividends fairly regularly, and most of them pay quite close to the high end on dividends, except those years when half their profits get eaten up by lawsuits. Then they have to eat the loss for that year, and raise prices the following year. In some cases they get hit by double whammies, and have multiple lawsuits, or a lawsuit, and some other product problem (such as J&J which got twice sabataged by product tampering, and then sued for one of their other products association with unpredicted consequences.)
The really big problem for vaccine makers in particular is that the lead in time between the first human trials and the likely mass demand is sometimes quite abbreviated. (Think SARS epidemic, Swine Flue, etc.) If you want to make your profit on that vaccine, you have to be ready to ramp up production fast, and distribute fast, and all that increases your risk both economically, and legally.
Tris
Why say “they’re entitled to make a reasonable profit” ? Why are they any different than any other industry- why can’t they make a large profit? In any case, as we have shown, the actual mark up from the cost of producing a unit of a drug to it’s cost to the patient is meaningless. The vaccine could well cost 10 cents to make and cost the patient 50. But there's millions and millions of of research to put any drug on the market.
Over all, talking net profits- “Big Pharma” is no more profitable than any other big business.
Here’s a wiki article:
For example let us take the largest real drug company out there (Johnson & Johnson makes a lot of OTC non-drug products)- Pfizer. They made a net profit of 8 billion. Nice. But Apple made 14 billion, Microsoft 18B. Goldman Sachs also made 8B. Pfizer made about the same profit as other companies of it’s size, maybe a little more. Philip Morris made 7Billion- talk about evil profits, there ya go. They made almost as much as the leading Pharma company and they did it by *killing *millions of people.
Eli Lilly lost 2B.
But what about an older vaccine where the technology is largely known? The MMR has been on the market for a long time. It seems to me that companies would need to devote very little R&D costs to it. I would like to know how much the vaccine costs to make and how much the manufacturers charge for it. I always see the anti-vax lobby arguing that vaccines are hugely profitable. Therefore vaccine makers have a fiscal incentive to push vaccines on the public. My understanding is that most vaccines make very little profit for the manufacturer. Companies make them because they are contractually obligated to but many would perfer to get out of the business altogether. Ideally I want to know exactly how much each vaccine earns for the maker. I can’t seem to find this information anywhere.
Thank you.
Here’s a list from the CDC. It shows the “CDC Cost” and the “Private Sector Cost” for each. I’m not sure what the difference is exactly though. The MMR vaccine is $18.99 (CDC) or $50.16 (PSC).
For other vaccines the prices range from around $10 (Hep B) to $108 (HPV 5 type). Hep A is $14.25, and Tetanus is $16.50 or $29.59 depending on which you get.
OK, I have to stop thinking about needles now before I get sick or pass out. :eek:
Best of luck getting any company to provide exact information on what its costs and markup are for a particular product.
As regards vaccines supposedly being a big profit center for drug companies as antivaxers would have you believe, the reality is that vaccine revenue is a small part of the overall drug company bottom line, and few companies these days make vaccines - the number of firms producing them has declined from 26 in 1967 to only 5 as of 2004 (this contributes to periodic vaccine shortages - when production problems occur, there may not be sufficient capacity elsewhere to meet the demand, as was the case a few years ago when influenza vaccine shortages developed due to problems in an overseas plant).
Reasons for companies getting out of the vaccine business include the limited market for vaccines compared to drugs that are taken for many years, competition for resources used in drug development, industry mergers, a great reduction in the private vaccine market (government is by far the biggest purchaser of vaccines, and federal price caps limit payments; insurance company reimbursements to physicians for buying vaccines are only slightly above costs), and the higher development and production costs for vaccines as opposed to drugs (vaccines are held to a higher standard):
“…the current culture does not allow for any serious side effects from a vaccine. As a consequence, pharmaceutical companies are now asked to disprove even very rare adverse effects prior to licensure. Two companies, Merck and GlaxoSmithKline, are now testing rotavirus vaccines in pre-licensure trials that include more than 140,000 children. The cost of these two large trials is about $400 million. The added financial burden of now disproving rare adverse events before licensure is another disincentive to making vaccines.”
And finally of course there are product liability issues (fear of lawsuits, higher liability insurance costs). Vaccine makers began leaving the market after the mid-70s, when a British researcher published an ultimately disproved claim that the pertussis vaccine caused brain injury and other serious problems (hmm, does this sound familiar, Wakefield fans?). Even with the federal government stepping in to compensate people for findings of injury via a “vaccine court”, liability issues remain.
*"Unfortunately, three important weaknesses in the NVICP (vaccine injury compensation program) discourage vaccine makers. First, if dissatisfied with the outcome, people can always opt out of the NVICP and take their case to a jury. Parents claiming that their children were harmed by thimerosal (an ethylmercury-containing preservative in some vaccines) have sued vaccine makers; about 300 separate lawsuits are now pending in U.S. courts. Although four large epidemiologic studies found that children receiving thimerosal-containing vaccines were not at increased risk for the neurological problems claimed, plaintiffs’ lawyers are pressuring pharmaceutical companies for a large settlement.[22]
Second, the NVICP does not cover all vaccines, only those routinely recommended for all children…Third, the NVICP does not include the unborn child when the mother is immunized. For example, very young infants are occasionally infected by a bacterium called group B streptococcus (GBS). GBS infects the bloodstream, the brain, and the spinal cord. Every year, about 2,000 U.S. babies are infected with GBS and 100 die; more newborns die from GBS than any other infectious disease. Unfortunately, most vaccines in the United States and the world are not given until one or two months of age—too late to prevent GBS infections. Therefore, the most effective strategy to prevent GBS would be to immunize pregnant women. Researchers have already shown that a GBS vaccine given to pregnant women would work to protect newborns.[24] However, because of concerns about litigation following immunization of pregnant women, no pharmaceutical company is willing to make a GBS vaccine or any vaccine that would include maternal immunization."*
(the above quotes are from a Medscape article I can’t link to directly - try Googling “are fewer companies making vaccines now”).
You have a fundamental lack of understanding about the way it works.
It’s true that the vaccine was first introduced in 1971. But what makes you think they stopped there and have had no expenses since?
Every long-term vaccine is subject to three separate forces: changes in manufacture, changes in testing, and changes in receptivity. Think of how much the computer industry has changed since 1971. The pharmaceutical industry has changed just as much. The growth process probably is completely revamped every couple of years as new techniques are developed. That requires rebuilding of the entire assembly process since each step is dependent on absolute adherence to the specifics of temperature and purity.
But each time a new technique is introduced, a new round of testing is required. No one can be sure that a new manufacturing process might not introduce variations into the end product or, even more likely, make the three vaccines interact in a different fashion. They’re also talking about adding varicella vaccine to the mix, and that requires all new testing from scratch. Vaccines also keep being introduced into more and more countries and each and every one has different testing requirements. More expenses for more years.
And then receptivity. You mention anti-vaxers so you know that a controversy exists. We know that the medium was changed as a result, so that immediately tells you of billions in expenses. Combating a determined assault, whether legitimate or illegitimate, requires more rounds of testing, considerable public relations expenses, and probably lowered sales no matter the outcome.
So how do you figure the profit margin of any individual vaccine? Huge teams of highly paid accountants are used in the hopes that they can determine the profitability or loss of products, vital information to direct the whole future of the company. This is not a science; the variables are tremendous and what I’ve given above is just a sampling. Accountants cost billions per year for a huge multinational, another expense that is part of the overhead of a company.
Do the anti-vaxers have any idea of what the real numbers are? Of course not. Only the deepest of insiders are privileged to see the numbers for each line of drugs, and there are probably hundreds or thousands in a company, plus those in various stages of the pipeline.
Do companies pull vaccines from the market because they are not profitable? Sure. Happens all the time. Do companies keep vaccines on the market because they are profitable? Obviously. You will never find out more. This is true for every product for every large company as well. People have an emotional investment in pharmaceuticals, but that’s the only difference.
This report from the National Center for Policy Analysis notes that “of the 12 pediatric vaccines recommended for all children, there have been severe shortages of more than half,” a situation the author of the report links to low profit margins for most vaccinations. The report goes on to note that most vaccinations are manufactured by only a handful of makers such as Merck because the profit margins are so low.
It also says the prices for vaccines are pressured by the federal government, since they pay for 57% percent of vaccine purchases – either through the Vaccines for Children Program or the Centers for Disease Control.
I didn’t think I’d be one to defend Big Pharma profits, but as others have tried to explain, the manufacturing cost is likely to be almost irrelevant.
How much does Adobe charge for Photoshop, and how much does it cost them to manufacture one copy? (Or, at the risk of going so far off-tangent as to confuse, how much does Barbra Streisand charge to sing a song and how much did it cost her to sing it?)
If you think the Pharma company should have only a tiny “profit margin” on the drugs it sells, I’d ask you what you think its “profit margin” should be on the drugs for which it invested hundreds of millions of dollars but is unable to sell a single dose?
Vaccines are a low-profit item for drug companies. And with idiots like Robert Kennedy (who thinks that thimerosol causes autism), vaccine makers have to be wary of costly lawsuits.
A few years back, Merck wanted to exit the business entirely-that would have left only foreign companies (Swiss and French) making them.
The interesting thing-one (Swiss firm) was interested in amking vaccines for the US NHS…howver, the specified that any litigation regarding injuries must be litigated in the Swiss courts.
I’m not trying to defend anything. I’m just trying to find an answer for the anti-vax argument that vaccine makers push vaccines just so they can make huge profits on a product they know does not work or actively causes harm. Everytime I debate this subject with one of the nutters that’s inevitably one of the arguments they make. What would be an effective counterargument? That’s what I’m trying to figure out.
My understanding is that vaccines are a relatively low profit item. Pharmaceutical companies or pHARM companies to borrow their idiot lingo make far more profit on items like toenail fungus cures and viagra. Is that right?
I think they’re entitled to make as much profit as they can from a free market. They take enormous risks developing drugs and vaccines (meaning that sometimes they lose big bucks), so I don’t begrudge them their loot when they hit the mother lode from time to time.
An effective counterargument would be that the CDC (not vaccine mfrs) are the ones pushing vaccines, and that vaccines work very well and have very low rates of adverse outcomes - and that regardless of how much net profit the vaccine mfr makes, the value to society of vaccines far, far exceeds the price tag.
That is to say, this would be an effective counterargument, if you were dealing with rational people. That’s rarely the case for the ant-vax crowd; frankly, you’re tilting at windmills there.
Counterargument? “It’s your claim. Prove it.”
They won’t. They can’t.
They also won’t care.
The data speaks for itself, but that’s not likely to sway their opinion.
Vaccine production is so unprofitable that few pharma companies can be persuaded to do it.
Unfortunately it isn’t just a handful of nuts.
Some of the anti-vax numbers are kind of scary:
I’m wondering what we can do to help ease people’s fears and up vaccine rates. The profit argument comes up again and again. I think a big chunk of the fence sitters could be persuaded with the right stats.