Marlborough Express - Weekend Express
A shot in the arm for Big Pharma
TALKING POLITICS
OPINION: Overall, the public regard the pharmaceutical industry as a necessary evil. While the drug companies provide essential medicines and pain relief, they’re also perceived to pursue forms of predatory pricing that test the limits of public patience.
However, the industry’s response to the Covid-19 threat has transformed some of the public’s negative attitudes given how well Big Pharma has delivered a series of life-saving vaccines, in record time.
However, just when we were all starting to re-appraise the industry, the Pfizer drug company has managed to ruin it all by gloating about how Covid19 has created a new, sustainable revenue stream for drug companies. And whoopee, won’t vaccine prices be racheted up once the pandemic has been brought under control.
Not that Pfizer said it quite as baldly as that. Instead, Pfizer’s chief financial officer Frank D’Amelio told a recent investor conference that he envisages a ‘‘significant opportunity’’ for Pfizer once the Covid market shifts from a ‘‘pandemic situation to an endemic situation.’’ Meaning: once Covid-19 vaccines have been embedded in the public health landscape, the drug companies will have a captive market that will be dependent on the latest versions of the vaccines to combat the latest variants of the virus, and everyone by then – governments included – will be reliant on the product.
In D’Amelio’s view, there isn’t much that’s normal about the current situation, since the market is ‘‘clearly not being driven by what I’ll call normal market conditions.’’
Eventually though, Pfizer expects that ‘‘normal market forces . . . will start to kick in.’’ At which point factors ‘‘like efficacy, booster ability, [and] clinical utility will basically become very important, and we view that as, quite frankly, a significant opportunity for our vaccine from a demand perspective, from a pricing perspective, given the clinical profile of our vaccine,’’ D’Amelio concluded.
That prospect is likely to make Finance Minister Grant Robinson’s hair stand on end. Around the world, Covid vaccinations have been publicly available free of charge, but there will soon be key funding decisions to make, perhaps as early as 2022.
How much of the rising cost of Covid vaccines can governments continue to absorb, and when should they begin passing some of those costs onto the public? This isn’t going to be easy. At the moment, the Ardern government is trying to maximise the uptake of the vaccine. It wouldn’t help that cause if price factors started to become a deterrent.
It isn’t as if the drug companies are currently losing money from their efforts for the public good. Already this year, Pfizer is projecting $15 billion in revenues from its vaccine and with more orders in the pipeline, for an after-tax return of at least $3.75 billion. From here on, Covid shots look like becoming an annual event, with booster shots required to keep pace with the virus variants. If vaccine prices rise and crowd out the spending on other drugs, this will have obvious implications for Pharmac, which is already under review.
No doubt, Covid vaccines are saving lives. It is doubtful though that the public is going to emerge from the pandemic feeling that Big Pharma is its new best friend.