Pfizer wins race for Covid profits, but at what cost?

The success of Comirnaty, the brand name given to the Pfizer-BioNTech vaccine, has been extraordinary, helping nations to get a grip on the pandemic and reopen their economies. The pill promises to further assist the world in returning to normality.

However, Pfizer’s achievement has been plagued by the concerns raised in Washington in July last year, months before any Covid-19 vaccine had been approved, with rich countries receiving the vast majority of its supply.

This week campaigners at Global Justice Now, part of the People’s Vaccine Alliance, a coalition of health, humanitarian and human rights organisations, world and faith leaders and economists, accused Pfizer of “ ‘making a killing’ while denying vaccines to most of the world”.

Of the two billion doses of Comirnaty shipped around the world, only 154 million have reached the poorest countries. Only 6 per cent of people in Africa are fully vaccinated.

On Wednesday, Pfizer told Wall Street that it expected to generate $36 billion in vaccine sales this year, accounting for as much as 45 per cent of its total sales. It has upgraded forecasts repeatedly, from $33.5 billion in July and $15 billion in February.

Experts expect the vaccine shortly to become the bestselling pharmaceutical product of all time, ahead of Humira, AbbVie’s anti-inflammatory drug, the world’s top-selling prescription drug in recent years.

In the United States, the world’s most important drugs market, its four-week average market share has risen to about 74 per cent and was at 80 per cent in the European Union at the end of last month, according to Pfizer.

The company expects sales of $29 billion next year, based on demand for 1.7 billion doses, but has the capacity to produce four billion doses and some analysts think Pfizer will again lift its sales expectations. Airfinity, a health analytics company, thinks that sales will increase to $54.5 billion in 2022.

Comirnaty’s sales have been driven by Pfizer becoming the first player to gain approval from US regulators and from emergency use authorisation for children and booster shots. Pfizer’s extraordinary commercial success, though, has been built on its contentious decision to develop the vaccine on a profit-making basis, when rival groups, including AstraZeneca, the Cambridge-based, London-listed company, committed to selling at cost.

AstraZeneca, which is still awaiting US approval for its vaccine, has supplied more than 1.8 billion doses of Vaxzevria, its vaccine licensed from Oxford University, to more than 170 countries. Of those, two thirds have been distributed to middle and lower-income countries.

The price of Comirnaty in Britain is understood to have increased to £22 per dose, up from £18. The company declined yesterday to confirm the latest pricing, but said that contracts differed to include commitments related to manufacturing, distribution and “access to further innovations not included in previous contracts”. It previously has said that “low and lower middle-income countries pay a not-for-profit price”.

Astrazeneca is understood to charge between £1.50 and £3.60 globally for its vaccine.

Pfizer has defended its business model, including against criticism over delays to shipping vaccines to poorer countries.

The company chose not to accept funding from the $18 billion US government programme known as Operation Warp Speed to fund the development of a vaccine.

Albert Bourla, Pfizer’s chief executive, has said that he decided not to take the money because it would have forced Pfizer to consult the government and would have burdened his scientists with bureaucracy. The decision meant taking on considerable financial risk. It teamed up with BioNTech, which had already spent years working on developing vaccine technologies to use against diseases.

In a documentary about the vaccine discovery, which Pfizer paid the National Geographic TV channel to produce, Bourla, 60, said he had told his scientists to “think completely out of the box” with “no money considerations”. Staff were ordered to start manufacturing the vaccine before they knew it worked.

“It’s only money,” Bourla said, before adding: “It’s not that we don’t care about money.”

Bourla said this week that Pfizer was “on track to achieve our goal of delivering at least two billion doses to low and middle-income countries by the end of 2022, at least one billion to be delivered this year and one billion next year”. As part of the pledge, a billion will be provided at the not-for-profit price.

Bourla also urged the governments of poorer countries to come forward and secure supply at discounted or not-for-profit prices, suggesting that delays lay with governments. “Some governments are better than others,” he said. “That’s the problem.”

Pfizer has stolen a march on Moderna, a smaller American biotech company whose mRNA technology has come of age during the pandemic, transforming the business, with the support of US government funding. This week the Massachusetts-based Moderna cut its 2021 sales forecast for its Covid-19 vaccine by as much as $5 billion as it grapples with distribution and production challenges. It now expects product sales of between $15 billion and $18 billion this year, having said in August that it had signed agreements for sales of $20 billion, news that triggered a two-day sell-off in New York in a stock that has soared since Covid emerged.

Meanwhile, there is uncertainty about the future of the Oxford-AstraZeneca vaccine. As well as charging a lot more than AstraZeneca for its vaccine, Pfizer wasn’t held back by early safety concerns linking AstraZeneca’s vaccine to rare risks of blood clots. Adam Barker, a healthcare analyst at Shore Capital, the broker, said that Pfizer also had a “very clean dataset” early on and had run a single trial, which made its development process faster.

He said that volumes had been stronger for Pfizer than Moderna because Pfizer had more experience with large-scale manufacturing and distribution. Moderna had not made a mass-market product previously. “That knowhow meant Pfizer could quickly roll out its product,” Barker said.

Matt Linley, lead analyst at Airfinity, said the Comirnaty vaccine has “dominated the market because of its high efficacy and safety, as well as how they’ve been able to scale production”.

Bourla, who was paid $21 million last year, has argued that the pandemic is reshaping Big Pharma for the better, making companies more innovative. Supporters argue that an industry allowed to make a return on risk can make huge strides for society and healthcare.

Before the pandemic, the industry had struggled to overcome criticism over drug pricing. In January 2020, the share of the US public that had a positive view of the pharmaceuticals industry was 32 per cent. That rose to about 62 per cent earlier this year, according to The Harris Poll, an American research and analytics company. In global markets, the percentage of people with a positive view of pharma is now in the high fifties to low sixties, compared with the low-to-mid seventies for technology and low fifties for financial services.

Rob Jekielek, managing director at The Harris Poll, said Pfizer’s reputation was consistently above the broader industry. He said that while “raw capitalism” wasn’t the only answer to solving complex health and social problems, “you shouldn’t take anything away from Pfizer. Pfizer put their nose to the grindstone and it’s been a huge success, both financially and for public health.”