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A senior Pfizer executive suggested to investors last week that the pricing of his Covid-19 vaccine could increase after the pandemic. The suggestion raises questions about whether a drug, developed at the behest of the federal government in response to a global crisis, could generate profits for a company.
This possibility was raised by Carter Lewis Gould, senior analyst at Biopharma Equity Research at Barclays, during a virtual conference on global health hosted by the bank. Gould, referring to comments made by Pfizer executives over the summer, asked how the pharmaceutical company still plans to pursue “higher prices” as “we move from a pandemic phase to an endemic phase” , according to an edited transcript of the conversation.
“Obviously, the focus has been on the street. And in particular, some of your comments on the potential for higher prices,” Gould said of Pfizer’s summer suggestion. “I think one of the things people point out is both the optics of that as well as part of their experience with the flu market. Now it’s absolutely different. But I was hoping that Maybe you could give us a little more detail on your thoughts here and around the possibility of pursuing higher prices later? “
In response, Frank A. D’Amelio, chief financial officer and executive vice president of global sourcing at Pfizer, said the company anticipates a “significant opportunity” for its vaccine “from a price perspective” as we let’s go “from a pandemic situation to an endemic situation.”
“So if you look at how current demand and current prices are determined, it’s clearly not driven by what I’ll call normal market conditions, normal market forces. It was really type driven. pandemic state that we have been. and the needs of governments to really secure the doses from the different vaccine providers, ”D’Amelio explained.“ So what we believe, what I believe to be as we go through ‘a pandemic state, from a pandemic situation to an endemic situation, normal market forces, normal market conditions will begin to manifest. And factors like efficacy, booster capacity, clinical utility will become fundamentally very important, and we see that as, quite frankly, a significant opportunity for our vaccine from a demand point of view, from a drug point of view. price, given the clinical profile of our vaccine, ”he said. “So it’s clear that there is more to come here. But we think that as it goes from a pandemic to an endemic, we think there is an opportunity here for us.”
In July, Pfizer signed a $ 1.95 billion pact to provide the US government 100 million doses of its COVID-19 vaccine. This the order has been doubled in December, when the company signed another $ 2 billion deal with former President Trump’s administration.
“Eligible U.S. residents will continue to receive the vaccine free of charge, consistent with the U.S. government’s commitment to provide free access to COVID-19 vaccines and according to the Centers for Disease Control and Immunization Practices Advisory Committee (ACIP). US Prevention (CDC) recommendations for phased vaccine deployment, “read a Pfizer press release after the second agreement.
The public-private relationship has made it possible for Americans to receive the vaccine for free, but, according to Pfizer, that doesn’t mean the federal government helped fund its creation. Kathrin Jansen, senior vice president and head of vaccine research and development at Pfizer, noted in November that the company had not taken federal money to help fund research and development.
According to the New York Times, Jansen said Pfizer “had never been in Warp Speed” and “never took money from the US government or anyone.”
A Pfizer spokeswoman later clarified that Pfizer was part of Operation Warp Speed, but the federal government investment was not spent on vaccine research or development.
“While Pfizer has entered into an early purchase agreement with the US government, the company has not accepted BARDA funding for the research and development process,” the Pfizer statement read. “All R&D investments have been made by Pfizer at risk. Dr Jansen emphasized this last point.”
This condition of Pfizer’s deal – which is not shared by the other two pharmaceutical companies that have developed COVID vaccines approved for distribution – could complicate matters once the pandemic subsides, according to Jordan Paradise, a law professor at the United Kingdom. University of Chicago who wrote about “possible costs” of “approved products” associated with COVID-19 in September.
The Paradise article examined the power of the federal government to regulate the price of products created with the help of federal funding. This power stems from the Bayh-Dole Act, a set of regulations passed in 1980 to deal with inventions arising from federally funded research.
The key to the legislation is what are called “entry fees,” which allow the federal government “to step in and claim legal title to an invention,” under “certain circumstances,” writes Paradise. These circumstances fall into two categories: “Where no marketing effort has been made within an agreed timeframe” or “” Action is required to alleviate health or safety needs “.
Paradise, however, points out that “while these entry fees appear to be an attractive way to keep institutional patent holders in check, the US government has never actually used this authority.” In fact, she notes, the National Institutes of Health “rejected the six petitions to exercise walking rights.”
Power has never been invoked, Paradise said, because it is ill-defined: “It is not clear. It is so unclear that the government has never exercised its rights march.”
When asked if the law could be used to prevent drug companies – whether or not they take money from the federal government and to what extent – from increasing the prices of COVID-19 vaccines, Paradise said that new legislation might be needed. She cited insulin price cap laws in several state books as potential models, but noted that “federally, it’s a free market.”
Another unknown is when the pandemic officially ends or becomes endemic, as Pfizer executives alluded to last week. Paradise said that call went to the chief of health and social services, currently headed by acting secretary Norris Cochran. President Joe Biden has appointed Xavier Becerra to head the department, although his confirmation remained deadlocked until last week.
“I think it’s going to be a change,” she said. “When does the pandemic end and does the government stop paying for vaccines?”
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