Pharma Where do COVID-19 vaccine players stand on pricing? So far, it's no profit, slight profit or undecided

23 July 2020

Eric Sagonowsky / FirecePharma

Numerous COVID-19 vaccine players are racing ahead at record speeds, and while a group of front-runners has taken shape, other companies in earlier stages of research are already busy with launch preparations.

More than 160 groups are working on COVID-19 vaccines, and 24 candidates have already reached human testing, according to the World Health Organization. Some are gearing up for phase 3, and officials and execs alike have said vaccines might be ready later this year or early next.

When they are, the vaccine makers will have to answer one big question: At what price?

Johnson & Johnson and AstraZeneca have pledged to market vaccines at no profit during the pandemic, while Pfizer’s CEO has said the company plans to price for a “marginal profit.” Novavax plans to "make an appropriate return." Moderna's CEO has pledged to price in line with other respiratory virus vaccines. At other companies, the discussions are ongoing.

Execs for many of the companies involved in the vaccine race are set to testify at a Tuesday hearing in Congress, where pricing is expected to be one topic of discussion.

No profit

J&J has “committed to bringing a safe and effective vaccine to the public on a not-for-profit basis for emergency pandemic use,” a spokesman told Fierce Pharma. In prepared remarks (PDF) for Tuesday's hearing, Macaya Douoguih, head of clinical development and medical affairs at Janssen Vaccines, said the company is "committed to one price globally, regardless of country or income tier."

J&J's not-for-profit price will apply to the emergency pandemic period, Douoguih explained in the remarks, and will be "determined based on one cost structure, with all appropriate costs included." And the company won't just rely on its own internal cost assessments.

"We are pursuing external validation of our not-for-profit calculation approach and external audit / certification of not-for-profit price," Douoguih added.

Likewise, AstraZeneca plans to price at “no profit” during the pandemic “to support broad and equitable access around the world," a spokeswoman said. The company has entered several agreements with governments and other groups to provide about 2 billion doses around the world, and those will be sold at no profit, AstraZeneca Executive Vice President of BioPharmaceuticals R&D Mene Pangalos said in prepared remarks (PDF) for the hearing.

Some return

In a recent Time interview, Pfizer CEO Albert Bourla said the company “will make a very, very marginal profit at this stage.” He pointed out that the company hasn’t taken any governmental funding, unlike other players. Since Bourla's remarks, the company and its partner BioNTech on Monday entered a deal with the U.K. government for 30 million doses.

The companies are also in "advanced discussions with multiple other government bodies and hope to announce additional supply agreements soon," BioNTech CEO Ugur Sahin said in a statement. A Pfizer spokeswoman further told Fierce Pharma the company is prioritizing “broad access” with its decision-making.

Novavax, which hasn't developed a product through commercial approval, is “in the process of developing a thoughtful pricing strategy,” a spokeswoman said. The company has “no current product revenues” but does have “years of significant investment to advance our platform to the point where we are now prepared to respond to a significant global health challenge.” Novavax plans to balance "affordable pricing" with the need to “make an appropriate return,” she added.

Very early in Moderna's vaccine development process, before many other companies were involved in the race, CEO Stéphane Bancel told Business Insider there's "no world, I think, where we would contemplate to price this higher than other respiratory virus vaccines." For comparison, flu vaccine prices vary from $0 to $50 or more per dose, according to GoodRx. Sanofi's Fluzone High Dose carries a list price of $48.50 per dose.

One group of analysts thinks Moderna's COVID-19 vaccine could generate $5 billion over the next few years at a similar price point. In a note to investors, Jefferies analysts predicted 50 million people will get the company's vaccine next year at a price point of $50 per dose, which would deliver multibillion-dollar sales. But if 100 million or 200 million people get vaccines at a higher price point, “this can quickly get to big numbers of $10 billion to $20 billion-plus in theory,” Jefferies analyst Michael Yee wrote.

Discussions ongoing

Sanofi, which has separate COVID-19 vaccine partnerships with GlaxoSmithKline and Translate Bio, has “been committed to working with governments, partners and payers to ensure that when new vaccines are approved, we will make them available and affordable,” a spokesman said.

Merck CEO Ken Frazier, in an interview with Tsedal Neeley, the Naylor Fitzhugh Professor of Business Administration at Harvard Business School, said the company has committed to “broad, equitable, affordable access.” The company publicly entered COVID-19 vaccine research later than its peers and remains in preclinical stages.

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