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It is difficult that a pharmaceutical company is driving in huge profits thanks to the corona series.
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Pfizer has punctured a gold vein with its covid vaccine. The turnover and profit of the American pharmaceutical giant were about 45 percent higher in the first quarter of 2021 than in the same period last year. This is mainly due to strong sales of its covid vaccine, which it developed together with the German biopharma company BioNTech. Pfizer also immediately increased its revenue and profit forecasts for the full fiscal year by 15 percent.
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Here’s one of the big winners of the corona health crisis. The strong financial results don’t just come out of the blue. They reflect the success of the Pfizer vaccine. It was one of the first to hit the market, it works very well, has hardly any unwanted side effects, Pfizer is meeting its contractual delivery obligations, and the company has also quickly increased its manufacturing capacity to bring more vaccines to the market. Pfizer says it will produce 1.6 billion doses this year. It can increase if additional contracts are concluded.
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Is Pfizer exploiting the corona series? The whole world is crying out for vaccines, and governments are willing to pay a lot of money for them. Of course, the pharmaceutical giant is capitalizing on that. On the other hand, he does not have a monopoly position. Other vaccines are available from other manufacturers. So there is competition. But the Pfizer vaccine is a premium product. More can and should be asked for this.
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Nevertheless, the question arises whether it is morally justifiable for a pharmaceutical company to make billions from a vaccine against a murderous virus that has a stranglehold on the world and against which there is no other defense.
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There should be a financial incentive for pharmaceutical companies to continue to invest in the improvement of their vaccines. But they shouldn’t try to get the most out of it.
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Profits are not realized in a ‘free’ market where the game of supply and demand determines the price. Demand is enormous and not very elastic. That puts the providers in a seat. Governments and governments, which have to protect their population, have their backs to the wall. Once the worst of the crisis is over, a serious public debate is needed.
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But how sustainable are Pfizer’s corona gains? More vaccines will enter this lucrative market. So more competition. That should keep prices in check. Now that they know the profit margins on the vaccines – 20 percent for the Pfizer vaccine – governments will negotiate sharper prices. The gold vein for Pfizer, and other pharmaceutical groups, will also become a lot less rich if the corona virus, as some predict, evolves into a ‘normal’ flu virus.
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There should be a financial incentive for pharmaceutical companies to continue to invest in the improvement of their vaccines. Vaccines that are more efficient, also against variants, that are useful for young people and the elderly, and that are easier to store and administer.
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However, the pharmaceutical giants should not try to get the most out of it. Because that will come back to them like a boomerang when the world is less dependent on their covid vaccines.
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