A top executive for Pfizer suggested investors prices for it last week Vaccine covid-19 could increase post-pandemic. The suggestion raises questions about whether a drug, developed at the request of the federal government to respond to a global crisis, could make a profit for a company.
The opportunity was raised by Carter Lewis Gould, a senior analyst for Biopharma Equity Research at Barclays, during a global virtual healthcare conference hosted by the bank. Gould, referring to comments made by Pfizer executives over the summer, questioned how the pharmaceutical company still intends to pursue “higher pricing,” because “we are moving from a pandemic to an endemic phase,” according to an edited transcript. of the conversation.
“It’s clearly focused a lot on the street. And, in particular, some of your comments about the potential for higher pricing,” Gould said of Pfizer’s summer suggestion. “I think one of the things that people point out is both the optics and part of their experience with the flu market. It’s absolutely different now. But we hoped you could give us a little more depth in your thoughts here and around. the potential to pursue higher prices on the road? “
In response, Frank A. D’Amelio, CFO and global executive vice president for Pfizer, said the company anticipates a “significant opportunity” for its vaccine “from a pricing perspective” as we move “from a pandemic situation to an endemic situation. ”
“So, if you look at how current demand and current prices are determined, it is clearly not driven by what I will call normal market conditions, normal market forces. It was really driven by a kind of pandemic that we were in and the need for governments to really deliver doses from different vaccine providers, “D’Amelio explained.” So what we believe, what I think is that we are moving from a pandemic state, from a pandemic situation to an endemic situation, normal market forces, normal market conditions will start to start in. And factors such as effectiveness, recall capacity, clinical utility will practically become very important and we consider that, honestly, a significant opportunity for our vaccine from the perspective of demand, from the perspective of prices, given the clinical profile of our vaccine, “he said. “So, clearly, we still have to come here. But we believe that as this goes from pandemic to endemic, we believe there is an opportunity here for us.”
In July, Pfizer signed a $ 1.95 billion pact to supply the US government 100 million doses from his COVID-19 vaccine. That the order has been doubled in December, when the company entered into another $ 2 billion deal with the administration of former President Trump.
“Eligible U.S. residents will continue to receive the vaccine free of charge, in accordance with the US government’s commitment to provide free access to COVID-19 vaccines and in accordance with the Advisory Committee of the US Centers for Disease Control and Prevention (CDC) on Immunization Practices (ACIP) ) recommendations for the gradual launch of the vaccine “, it is shown in a press release from Pfizer after the second deal.
The public-private relationship allowed the Americans to receive the vaccine for free, but, according to Pfizer, it does not mean that 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 did not take any federal money to help pay for research and development.
According to The New York Times, Jansen said Pfizer “never was part of Warp Speed” and “never took money from the US government or anyone.”
A Pfizer spokeswoman later clarified that Pfizer is part of Operation Warp Speed, but federal government investment has not been directed toward vaccine research or development.
“While Pfizer reached an advanced procurement agreement with the US government, the company did not accept BARDA funding for the research and development process,” the Pfizer statement said. “All investments in research and development have been made by Pfizer at risk. Dr. Jansen emphasized this last point.”
This condition of the Pfizer agreement – which is not shared by the other two pharmaceutical companies that have developed COVID-approved vaccines for distribution – could complicate matters once the pandemic has disappeared, according to Jordan Paradise, a law professor at the University of Chicago who wrote about ” “costs” of the “approved products” associated with COVID-19 in September.
The Paradise article examined the power of the federal government to regulate the prices of products created with the help of federal funding. This power comes from the Bayh-Dole Act, a set of regulations adopted in 1980 to address inventions resulting from federally funded research.
The key to the legislation is something called “entry rights,” which allow the federal government to “intervene and assert the legal title of an invention,” in “certain circumstances,” Paradise writes. These circumstances fall into two categories: “When no marketing efforts have been made within an agreed timeframe” or when “action is needed to mitigate health or safety needs”.
Paradise, however, points out that “while these entry rights sound like an attractive way to control institutional patent holders, the US government has never used that authority.” In fact, she notes, the National Institutes of Health “rejected all six petitions for the exercise of marching rights.”
Power has never been invoked, Paradise said, because it is poorly defined: “It is unclear. It is so unclear that the government has never exercised its rights.”
Asked if the law could be used to prevent pharmaceutical companies – whether or not they took money from the federal government and to what extent – from raising prices for COVID-19 vaccines, Paradise said new legislation may be needed. She cited insulin cap laws in books in several states as potential templates, but noted that “there is a free market at the federal level.”
Another unknown is when the pandemic officially ends or becomes endemic, as Pfizer executives alluded to last week. Paradise said the call came from the head of human and health services, currently led by acting secretary Norris Cochran. President Joe Biden has appointed Xavier Becerra to head the department, although his confirmation was blocked until last week.
“I think it’s going to be a change,” she said. “When does the pandemic end and the government stop paying for vaccines?”