A top Pfizer executive suggested investors last week that prices be theirs Covid-19 vaccine could increase the post-pandemic. The suggestion raises questions about whether a drug, developed at the request of the federal government to respond to a global crisis, could benefit a company.
The possibility was raised by Carter Lewis Gould, a senior analyst at Biopharma Equity Research at Barclays, during a virtual global health conference hosted by the bank. Gould, referring to comments made by Pfizer executives over the summer, questioned how the pharmaceutical company still planned to pursue “higher prices,” as “we move from a pandemic phase to an endemic phase,” according to an edited transcript. of the conversation.
“Clearly it focused a lot on the street. And in particular, some of your comments about the potential for a higher price,” Gould said of Pfizer’s summer suggestion. “I think one of the things that people point out is both the optics and their experience with the flu market. Now that’s absolutely different. But I was hoping that maybe you could dig a little deeper into your thoughts here and around. of the potential to get higher prices on the road? “
In response, Frank A. D’Amelio, chief financial officer and executive vice president of global supply at Pfizer, said the company envisions a “significant opportunity” for its vaccine “from a pricing perspective” as we move “from a pandemic situation to an endemic situation.”
“So if you look at how current demand and current prices are being driven, it’s clearly not going to be driven by what I will call normal market conditions, normal market forces. It’s really been driven by the pandemic state that we’ve been in. the needs of governments to really ensure doses to the various vaccine suppliers, ”D’Amelio explained. “Then what we believe is what I think we are going from a pandemic state, from a pandemic situation to an endemic situation, the normal market forces, the normal market conditions will start to start. And factors like the efficacy, booster capacity, clinical utility will basically become very important and we consider that, frankly, it is a significant opportunity for our vaccine from the perspective of demand, from the perspective of prices, given the clinical profile of the our vaccine, ”he said. “Clearly there will be more to come. But we believe that as it goes from pandemic to endemic, we believe there is an opportunity for us here.”
In July, Pfizer signed a $ 1.955 billion pact to provide to the U.S. government 100 million doses of his COVID-19 vaccine. That the order was duplicated in December, when the company signed another $ 2 billion deal with the administration of former President Trump.
“Eligible residents in the United States will continue to receive the vaccine free of charge, in accordance with the U.S. government’s commitment to provide free access to COVID-19 vaccines and in accordance with the Immunization Practice Advisory Committee ( ACIP) of the U.S. Centers for Disease Control and Prevention (CDC) recommendations for the progressive release of the vaccine, ”reads a Pfizer press release following the second agreement.
The public-private relationship allowed Americans to receive the vaccine for free, but, according to Pfizer, that doesn’t mean the federal government helped fund its creation. Kathrin Jansen, 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 “never was part of Warp Speed” and “has never taken money from the U.S. 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 toward vaccine research or development.
“Although Pfizer reached an advanced purchase agreement with the U.S. government, the company did not accept BARDA funding for the research and development process,” the Pfizer statement said. “All the investment in R&D was made by Pfizer at risk. Dr. Jansen highlighted this last point.”
This condition of the Pfizer deal – which is not shared by the other two pharmaceutical companies that have developed COVID-approved vaccines for distribution – could complicate matters once the pandemic has subsided, according to Jordan Paradise, a law professor at the University. of Chicago who wrote about the “eventual costs” of the “approved products” associated with COVID-19 in September.
The Paradise article analyzed the power of the federal government to regulate the price of products created with the help of federal funding. This power comes from the Bayh-Dole Act, a set of regulations passed in 1980 to address inventions derived from federally funded research.
The key to the legislation is something called “rights of way,” which allows the federal government to “intervene and assert the legal title of an invention,” in “certain circumstances,” Paradise writes. These circumstances fall into two categories: “When no effort has been made to market within an agreed timeframe,” or when “action is needed to alleviate safety or health needs.”
Paradise, however, notes that “while these rights of exit seem an attractive way to keep institutional patent holders under control, the U.S. government has never used that authority.” In fact, he notes, the National Institutes of Health “have denied all six petitions to exercise marching rights.”
Power has never been invoked, Paradise said, because it is not well defined: “It is not clear. It is so unclear that the government has never exercised its rights march.”
When asked if the law could be used to prevent pharmaceutical companies (whether or not they took money from the federal government and to what extent) from raising prices for COVID-19 vaccines, Paradise said it might be necessary. new legislation. He noted the laws on the insulin price cap, in several books from various states, as potential templates, but noted that “at the federal level it’s a free market.”
Another unknown is when the pandemic officially ends or becomes endemic, as alluded to by Pfizer executives last week. Paradise said the call comes from the head of Health and Human Services, currently headed by acting secretary Norris Cochran. President Joe Biden has appointed Xavier Becerra to head the department, although his confirmation had been blocked until last week.
“I think it’s going to be a change,” he said. “At what point does the pandemic end and the government stop paying for vaccines?”