A Pfizer general manager suggested to investors last week that its price Covid-19 vaccine post-pandemic may increase. The proposal raises questions about whether a drug, developed on behalf of the federal government to respond to a global crisis, could make a profit for one company.
The possibility was raised by Carter Lewis Gould, a senior analyst at Biopharma Equity Research at Barclays, during a virtual global healthcare conference hosted by the bank. Gould, referring to comments made by Pfizer executives over the summer, asked how the pharmaceutical company is still planning higher pricing to ‘move us from a pandemic to an endemic phase’, according to an edited transcript of the conversation.
“Clearly got a lot of attention on the street. And in particular, some of your comments about the possibility of higher prices,” Gould said of Pfizer’s summer proposal. ‘I think one of the things that people point to is its optics, as well as part of their experience with the flu market. Now it’s completely different. But I was hoping you might be able to give us a little more depth about your thoughts here and around the potential to chase higher prices down the road? ‘
In response, Frank A. D’Amelio, CFO and CEO of Pfizer’s global offering, said the company expects an “important opportunity” for its vaccine “from a price perspective” as we move “from a pandemic situation to an endemic situation. ”
“So if you look at how current demand and current pricing is driven, it’s clearly not driven by what I would call normal market conditions, normal market forces. It’s really driven by the kind of pandemic we were in and the needs of governments. to really ensure doses from the different vaccine providers, “D’Amelio explained. “What we believe, what I believe, is if we move from a pandemic state, from a pandemic situation to an endemic situation, normal market forces, normal market conditions will begin to kick in. And factors such as efficiency, resilience, clinical utility will basically becomes very important, and we consider it, frankly, an important opportunity for our vaccine from a demand perspective, from a price perspective, given the clinical profile of our vaccine, ‘he said. “So clearly, more to come here to come. But we think if it moves from pandemic to endemic, we think here’s an opportunity for us. “
In July, Pfizer signed a $ 1.95 billion treaty to supply the US government 100 million doses of the COVID-19 vaccine. That order is doubled in December, when the company contacted another $ 2 billion deal with former President Trump’s administration.
“Eligible U.S. residents will continue to receive the vaccine free of charge, in line with the U.S. government’s commitment to provide free access to COVID-19 vaccines and according to the U.S. Advisory Committee on Immunization Practices (ACIP) and prevention (CDC) recommendations for the phase deployment of the vaccine, ”reads a press release from Pfizer after the second agreement.
The public-private relationship has allowed Americans to receive the vaccine for free, but according to Pfizer, that does not mean the federal government helped fund its creation. Kathrin Jansen, a 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 was “never part of the Warp Speed” and “never took money from the US government or anyone”.
A Pfizer spokesman later clarified that Pfizer was part of Operation Warp Speed, but the federal government’s investment did not go to vaccine research or development.
“Although Pfizer did reach an advanced purchase agreement with the US government, the company did not accept BARDA funding for the research and development process,” the Pfizer statement said. “All the investments for R & D have been jeopardized by Pfizer. Dr. Jansen emphasized the last point.”
This condition of Pfizer’s agreement – which is not shared by the two other pharmaceutical companies that developed COVID vaccines approved for distribution – could complicate matters once the pandemic subsides, according to Jordan Paradise, a law professor. to the University of Chicago, which wrote in September about the ‘ultimate cost’ of ‘approved products’ associated with COVID-19.
Paradise’s article looked at the power of the federal government to regulate the prices of products created using federal funding. The power comes from the Bayh-Dole Act, a set of regulations passed in 1980 to address inventions stemming from research funded by the federal government.
The key to the legislation is something called ‘march rights’, which allows the federal government to’ intervene ‘under’ certain circumstances’ and give legal title to an invention ‘, writes Paradise. These circumstances can be divided into two categories: “If there have been no attempts to commercialize within an agreed time frame,” or when “” action is needed to alleviate health or safety needs. ”
Paradise points out, however, that “while these marching rights sound like an attractive way to keep institutional patent holders in check, the U.S. government has never used this authority.” In fact, she notes, the National Institutes of Health “denied all six petitions to exercise marching rights.”
Power has never been invoked, Paradise said because it was poorly defined: “It’s unclear. It’s so unclear that the government has never exercised their march in rights.”
Asked if the law could be used to prevent pharmaceutical companies, whether they take money from the federal government or not, and to what extent – to prevent raising prices on COVID-19 vaccines, Paradise says that completely new legislation is needed. can be. She pointed to the laws on insulin prices on the books in several states, as possible templates, but noted that “it is a free market at the federal level.”
Another unknown is when the pandemic will officially end, or become an endemic, as Pfizer executives alluded to last week. Paradise said the call is headed by health and human services, which is currently led by acting secretary Norris Cochran. President Joe Biden has nominated Xavier Becerra to lead the department, though his confirmation ran until last week.
“I think it’s going to be a change,” she said. “At what point does the pandemic end and does the government stop paying for vaccinations?”