A Pfizer CEO suggested to investors last week that the price was ahead Covid-19 vaccine could increase post-pandemic. The suggestion raises questions about whether a drug developed on behalf of the federal government to respond to a global crisis could bring a profit for one company.
The possibility was raised by Carter Lewis Gould, a senior analyst for Biopharma Equity Research at Barclays, at a virtual global healthcare conference hosted by the bank. Gould, referring to comments from Pfizer executives in the summer, asked how the drug company still envisions pursuing “higher prices” as “we move from a pandemic to an endemic stage,” according to an edited transcript of the report. conversation.
“Obviously, I have a lot of focus on the street. And in particular some of your comments about the potential for higher prices,” Gould said of Pfizer’s summer suggestion. “I think one of the things people are referring to is both the optics of that and part of their experience with the flu market. This is definitely different. But I was hoping you might give us a little more depth on your opinion here and about the potential to pursue higher prices in the future? “
In response, Frank A. D’Amelio, CFO and executive VP of global supply for Pfizer, said the company anticipates a “significant opportunity” for its vaccine “from a pricing perspective” as we move “from a pandemic to an endemic situation. . ”
“So if you look at how current demand and pricing is being driven, it is clearly not being driven by what I will call normal market conditions, normal market forces. It is really driven by some kind of pandemic condition that we are in. the needs of governments to really secure doses from the various vaccine suppliers, ”explained D’Amelio.“ So what we believe, what I believe is when we go from a pandemic situation, from a pandemic situation to an endemic situation, normal market forces , normal market conditions are starting to work. And factors such as efficacy, tonic ability, clinical utility. is going to be very important in essence, and we consider that, frankly, as a major opportunity for our vaccine from a demand perspective, from a price perspective given the clinical profile of our vaccine, “he said.” Obviously, there are more here. But we think there is an opportunity for us here as this shifts from pandemic to endemic. “
In July, Pfizer signed a $ 1.95 billion pact to supply the US government 100 million doses of his COVID-19 vaccine. Which order has doubled in December, when the company signed another $ 2 billion deal with former President Trump’s administration.
Eligible US residents will continue to receive the vaccine for free, in line with the US government’s commitment to provide free access to COVID-19 vaccines and according to the US Centers for Disease Control and Prevention’s (CDC) Advisory Committee on Immunization Practices (ACIP) recommendations for the phased rollout of the vaccine, ”a Pfizer press release reads after the second deal.
The public-private relationship allowed Americans to get the vaccine for free, but according to Pfizer, that doesn’t mean the federal government helped fund it. Kathrin Jansen, senior vice president and chief of vaccine research and development at Pfizer, noted in November that the company was not taking 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 spokeswoman later clarified that Pfizer was part of Operation Warp Speed, but the federal government’s investment did not go into vaccine research or development.
“Although Pfizer reached an advanced purchase agreement with the US government, the company did not accept BARDA funding for the research and development process,” Pfizer said. “All investments for R&D have been made by Pfizer and are at risk. Dr. Jansen emphasized the latter point.”
This condition of Pfizer’s agreement – which is not shared by the two other pharmaceutical companies that developed COVID vaccines that have been approved for distribution – could complicate things once the pandemic clears, said Jordan Paradise, a professor in the US. law at the University of Chicago who 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 pricing of products made using federal funding. That power comes from the Bayh-Dole Act, a set of regulations passed in 1980 to address inventions emerging from federally funded research.
The key to the legislation is something called “march-in-rights,” which allows the federal government to “intervene and assert legal title to an invention,” under “certain circumstances,” Paradise writes. Those conditions fall into two categories: “When attempts have not been made to commercialize within an agreed timeframe,” or when “action is needed to alleviate health or safety needs.”
However, Paradise points out that “while these marching rights sound like an attractive way to control institutional patent holders, the US government has never really used them.” In fact, she notes, the National Institutes of Health “rejected all six petitions to exercise marching rights.”
Power has never been invoked, Paradise said, because it is ill-defined: “It is unclear. It is so unclear that the government has never exercised its march in rights.”
When asked if the law could be used to prevent drug companies – whether they have taken money from the federal government, and to what extent – from raising the prices of COVID-19 vaccines, Paradise said there was entirely new legislation. might be needed. She pointed to insulin price cap laws on the books in several states as possible templates, but noted that “at the federal level, it is a free market.”
Another unknown is when the pandemic will officially end, or become endemic, as Pfizer executives said last week. Paradise said that call is to head Health and Human Services, currently headed by Acting Secretary Norris Cochran. President Joe Biden has nominated Xavier Becerra to lead the department, although his confirmation was at an impasse until last week.
“I think it’s going to be a change,” she said. “At what point will the pandemic end and the government stop paying for vaccines?”