Vaccine giants raking it in at the expense of others

August 03, 2021 | 11:00
While the world’s largest COVID-19 vaccine producers made huge profits in the first half of 2021, sales figures in various countries point to the apparent conclusion that the same groups are profiteering from monopolies on the vaccines.
Vaccine giants raking it in at the expense of others
Pfizer-BioNtech COVID-19 vaccine. Photo: Menahem KAHANA / AFP

US pharma giant Pfizer last week announced strong sales of its COVID-19 vaccine and other medicines, helping the company nearly double its second-quarter revenue and boost its profit by an impressive 59 per cent.

Specifically, second-quarter net income was $5.56 billion, or 98 US cents per share, up from $3.49 billion, or 62 US cents per share. Its quarterly revenue of $18.98 billion far exceeded last year’s $9.86 billion, and also topped projections. According to Pfizer, the COVID-19 vaccine became its top seller, bringing in nearly half its revenues – $7.84 billion from direct sales and revenue split with its partner, Germany’s BioNTech.

CEO Albert Bourla said that Pfizer has delivered more than one billion doses of the vaccine globally and expects to make three billion doses in 2021, with many more going to low- and middle-income countries by the end of the year.

Pfizer now expects two-dose vaccine revenues in 2021 to reach $33.5 billion for the 2.1 billion doses it has contracted to provide by the end of the year. That excludes a contract reached recently to provide an additional 200 million doses to the United States.

Pfizer agreed to provide 31 million doses of COVID-19 vaccine for Vietnam in 2021, with the first 97,000 doses arriving in the country in early July.

Pfizer now expects adjusted full-year earnings in the range of $3.95 to $4.05 per share, up from its May forecast of $3.55 to $3.65 per share, and revenue in the range of $78 billion to $80 billion, up from $70.5 billion to $72.5 billion.

Pfizer and BioNTech have put into place a robust booster research programme to ensure that the vaccine continues to offer the highest degree of protection possible, the representative added.

“Initial data of a third dose of the current vaccine demonstrates that a booster dose given at least six months after the second dose elicits high neutralisation against the wild type and the Beta, which are 5-10 times higher than after two primary doses.”

To gain the yearly goal, Pfizer might have to discuss with the US Food and Drug Administration, the European Medicines Agency, and other regulatory authorities in the coming weeks to persuade health authorities worldwide to understand what level of antibodies or other immune responses correlate with levels of protection from COVID-19, particularly as variants of concern continue to circulate around the globe.

Other COVID-19 vaccine producers also made gains. Johnson & Johnson (J&J) reported sales of $23.31 billion in the second quarter of 2021, an increase of 27.1 per cent compared to $18.33 billion in the same quarter last year. Net earnings for the quarter stood at $6.28 billion, a surge of 73.1 per cent against $3.63 billion during the same time a year ago.

J&J’s pharmaceutical business, which developed the single-shot COVID-19 vaccine, generated $12.59 billion in revenue, a 17.2 per cent year-over-year increase.

Chairman and CEO Alex Gorsky said, “Our second-quarter results showcase a diversified portfolio, driven by strong sales and earnings growth across our medical device, consumer health, and pharmaceutical businesses.”

J&J expects to sell $2.5 billion of its COVID-19 vaccine this year.

Elsewhere, while American biotech company Moderna is planning to announce its first half results this week, industry experts said that the company made big gains from COVID-19 vaccines.

Moderna stock rallied by more than 20 per cent over a recent week, significantly outperforming the S&P 500 which was down by about 1 per cent.

While the developers gained a big profit from COVID-19 vaccines and expect to gain more in the months to come, campaigners from the People’s Vaccine Alliance last week said that the cost of vaccinating the world against could be at least five times cheaper if pharmaceutical companies were not profiteering from their monopolies on COVID-19 vaccines.

New analysis by the alliance of nearly 70 organisations, including the African Alliance, Oxfam, and UNAIDS, shows that the firms Pfizer/BioNTech and Moderna are charging governments as much as $41 billion above the estimated cost of production. Colombia, for example, has potentially overpaid by as much as $375 million for its doses of the Pfizer/BioNTech and Moderna vaccines, in comparison to the estimated cost price.

Despite a rapid rise in cases and deaths across the developing world, Pfizer/BioNTech and Moderna have sold over 90 per cent of their vaccines so far to rich countries, charging up to 24 times the potential cost of production. Neither company has agreed to fully transfer vaccine technology and know-how with any capable producers in developing countries – a move that could increase global supply, drive down prices, and save millions of lives, campaigners noted.

The People’s Vaccine Alliance highlighted examples of how much both developing and wealthier nations have been potentially overpaying:

- Pfizer/ BioNTech are charging their lowest reported price of $6.75 to the African Union but this is still nearly six times more than the estimated potential production cost of this vaccine. One dose of the vaccine costs the same as Uganda spends per citizen on health in a whole year.

- The highest reported price paid for Pfizer/BioNTech vaccines was paid by Israel at $28 a dose - nearly 24 times the potential production cost.

- The EU may have overpaid for their 1.96 billion Moderna and Pfizer/BioNTech vaccines by as much as €31 billion ($36.8 billion).

- Moderna has charged countries between four and 13 times the potential cost price of the vaccine and reportedly offered South Africa a price between $30-42 a dose - nearly 15 times higher than the potential production cost.

- Colombia, which has been badly affected by the pandemic, has been paying double compared to the US for Moderna vaccines. For Moderna and Pfizer/BioNTech combined, the country has potentially overpaid by as much as $375 million.

- Senegal, a lower-income nation, said it paid around $4 million for 200,000 doses for Sinopharm vaccines, which equates to around $20 a dose.

- The UK alone has potentially paid £1.8 billion more than the cost of production for the Pfizer and Moderna vaccines – enough money to pay every worker in its National Health Service a bonus of more than £1,000.

By Tung Anh

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