Vaccines are not usually the most cost-effective products in the Big Pharma catalog, especially compared to the drugs used to treat chronic conditions.
Vaccine development was a gamble for all companies that tried it, even with most drug manufacturers accepting the big governments.
This is because among the experts and executives of pharmaceutical companies it is assumed that even after the pandemic has passed, people will have to receive reinforcements to protect themselves from new variants.
“Genetic mutations occur naturally during virus replication and spread,” Albert Bourla, CEO of Pfizer, said in his latest call to analysts. “There is an increasingly likely scenario when it may become necessary in the coming years to empower patients vaccinated against COVID-19 with a vaccine that encodes the variant.”
This would mean even more sales (and more profits) of the vaccine.
Bourla on Thursday defended Pfizer’s gains with the vaccine, though Johnson & Johnson provided it to a nonprofit. He noted that in the poorest countries that cannot afford the dose of less than $ 20 per dollar, the vaccine is offered at its cost. Bourla also said that unlike some other companies, Pfizer did not take money from taxpayers to develop its vaccine and assumed all the risk with an investment of between $ 1,000 and $ 2 billion in research and development.
And, despite the large amounts of money they are likely to contribute, vaccines against Covid do not change the game of many of the big pharmaceutical companies.
Pfizer, on the other hand, expects revenues of between $ 20 billion and $ 44 billion by 2021, with profits of at least $ 14 billion, not counting any increase in revenue from its Covid vaccine. (Its revenues in 2020 amounted to $ 41.9 billion.) Pfizer and other Big Pharma companies have also seen their stock prices record S&P 500 gains over the past twelve months.
An exception is Moderna, a relatively new pharmaceutical company that had no approved products on sale in 2019. The drug maker only had $ 60 million in revenue that year, but earned $ 529 million in revenue and $ 200 million in revenue. of dollars for the first vaccine sales in 2020. The forecast for 2021 is revenue of 16 billion dollars, mostly from vaccine sales. Shares of Moderna have risen 187% in the last twelve months.
Governments around the world have placed orders for 18 billion doses of various vaccines since late last year and so far, according to an estimate by Airfinity, a London-based research company. That’s more than enough to vaccinate each of the nearly eight billion people on the planet twice each. These orders were made before governments could be sure that all vaccines would be developed successfully or that the production of each company would be sufficient to meet demand.
And some development efforts found problems.
But whether they add billions or nothing to the results of individual companies, one thing is clear; vaccines are an advantage to the industry, like never before.
Usually not even patients who take a drug on a daily basis know which manufacturer produced it. At best, they know the name of the drug, said Tinglong Dai, a business professor at Johns Hopkins Unversity. Coronavirus vaccines, on the other hand, have given drug manufacturers the best brand development to date, he said.
“There’s really been a maritime shift in the way people perceive them,” Dai said. “They’re not greedy pharmaceutical companies charging outrageous prices. They’re saving the world. It’s a really brilliant PR.”
In fact, the development of vaccines could even help calm the recent conversation about the government’s action to reduce drug prices, he said.
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