So what’s the reason for the massive increase? “There are key differences between an emergency and traditional model that increase the costs of making and distributing the COVID-19 vaccine,” Pfizer stated in an email. Those costs include having to distribute the vaccine through multiple channels and payers (instead of just one). They also have to produce the doses in single vials, which costs much more.
Still the new pricing will boost their revenue for years to come. “This is much higher than our assumption of $50 per shot, and even assuming $80 per shot net price in high-income countries, we see $2 per share upside to our estimates” from the new prices, stated Wells Fargo analyst Mohit Bansal.
The increase in costs should not affect most privately insurance patients, who will likely not have to pay any out-of-pocket costs. Uninsured patients should also still be able to receive the vaccine at no cost to them.
The increase will likely cause Moderna and Novavax to follow suit. “We expect Moderna to adapt to this signal,” SVB Securities analyst David Risinger said, adding that he sees Pfizer/BioNTech, Moderna and Novavax “pricing in a similar range for the foreseeable future.”
Moderna’s estimated commercial price ranges from $64 to $100 per shot. Novavax’s vaccine might take more time since they were newly authorized to this year, and hasn’t been in the U.S. market long enough yet.
“We need to make sure that… we’re stocked at pharmacies, we’re stocked at healthcare providers,” Trizzino said. “To the extent that we’ve got to do something with price in order to ensure that that happens, then maybe that’s a lever that we’ll pull.”
How do you think the increase in price of these vaccines will affect the rest of the world?