The US is buying COVID-19 vaccine for everyone. That could pave the way for drug price reform

Sarah Gantz, The Philadelphia Inquirer on

Published in Business News

The pharmaceutical industry’s public reputation has soared during the pandemic, as people saw competitors collaborate in a worldwide moment of crisis.

Even at a steeply discounted price, drug companies have profited from the coronavirus vaccines. Pfizer, for instance, has a 20% profit margin on its vaccine, D’Amelio said during the February earnings call.

In response to questions from the Inquirer about its plans for vaccine pricing, Pfizer pointed to its 2021 proxy statements, in which executives said the company expects a “pandemic phase” — where governments are the primary purchasers of the vaccine — could last into 2022.

“We recognize the urgent need for people all over the world to receive this vaccine and have accordingly set the price of our vaccine for the pandemic period to encourage broad access, rather than using traditional value-based pricing frameworks,” the company wrote in its proxy statement.

IQVIA, a health care analytics company, estimates global spending on coronavirus vaccines will top $157 billion over the next five years. Competition from new manufacturers could help drive down prices, though cost will vary by country, said Murray Aitkin, a senior vice president and executive director of the IQVIA Institute for Human Data Science.

The U.S. government is expected to continue negotiating bulk purchasing agreements with vaccine makers for the duration of the public health emergency. If boosters are needed to protect against new variants or if researchers discover immunity lasts for only so long, the government will most likely purchase those, too, said Stacie Dusetzina, an associate professor in the Department of Health Policy at Vanderbilt University. That should help keep prices steady — at least for now, she said.

Pharmaceutical companies are known for routinely hiking prices of drugs that have been on the market for years. But a vaccine for a global pandemic is different, Dusetzina said.

“People really don’t have any leeway for price gouging when the country is in a bind, and this is definitely one of those times,” she said. “Globally, nationally, we’re in a bind. We should expect companies to be able to make a profit, but we should not expect or allow companies to make excessive profit.”


But eventually, once the pandemic is over, a coronavirus booster may be just one more of the common immunizations that children and adults receive, like those for influenza or hepatitis.

Under the Affordable Care Act, most health insurance plans are required to cover routine immunizations without an out-of-pocket cost. Medicare and Medicaid also cover at no additional cost most vaccinations.

The federal childhood immunization program ensures that all children are able to get vaccines, even if they are uninsured. Pfizer recently received emergency use authorization for its COVID-19 vaccine among children ages 12 to 15. Both Pfizer and Moderna are conducting clinical trials to test the vaccine in children as young as 6 months.

But without careful planning — or a policy change — people at the greatest risk of getting sick could have the least access to the vaccine, said Jen Kates, a senior vice president at the Kaiser Family Foundation. People who are uninsured often hold “essential worker” jobs that do not offer health benefits, and may be unable to work from home, take time off work or social distance.

Uninsured adults are often able to access routine vaccines at federally funded health clinics, but coverage isn’t guaranteed. People without health insurance are often reluctant to seek out medical treatment for fear that they won’t be able to pay.

“COVID is probably the clearest example people have had in their lifetime of what happens if you have an infectious agent that causes a subset of people to become very sick, be hospitalized and possibly die,” Kates said. “It really goes against everyone else’s best interest if there are groups that don’t have access to the vaccine.”

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