The European Union will pay more for Pfizer and Moderna vaccines. According to the sector, the price increase is understandable. But there is much criticism of the vaccine makers’ revenue model.
‘The Great Vaccine Robbery’. That’s what a calls alliance of NGOs the high profits that companies like Pfizer and Moderna earn from the vaccines. According to author The People’s Vaccine, the price of the vaccination campaign could be more than five times cheaper. Anna Marriott, Health Policy Advisor at Oxfam, speaks even of “perhaps one of the deadliest cases of profit making in history”.
But according to Franc de Korte, spokesperson for the Association for Innovative Medicines (VIG), the price increase can be well substantiated: now that we are dealing with new variants, this also means that the vaccines must be modernized. “That will have to be paid in one way or another,” says De Korte.
“When developing a ‘normal’ medicine, you already pay 2 billion euros,” says De Korte. “If you now take the further development, plus all the expansion of production capacity, then I can imagine that the price is justifiable.”
According to De Korte, it also includes ‘risk-bearing capital’. “Investors have also taken their responsibility to invest in a vaccine that they did not know if it would save the market. They are lucky now, but they could have lost their hero already.”
According to De Korte, the price is also lower than what is currently being spent to combat the entire corona crisis.
‘They are already making a profit’
Marcel Canoy, professor of health economics at the VU, is, however, critical of the price increase.
“An increase of a few euros, that may not sound like much,” he tells news hour. “But if the vaccines remain in use on a structural basis, that is an enormous amount of money that comes on top of the profits that the pharmaceutical companies already make.”
Canoy finds it understandable that companies make a profit, but he wonders whether it should be that much. “They are already making that profit. Why should the profit be even higher? In addition, the development of the vaccine was also partly paid for by public money, namely by universities and governments that invested in it.”
According to De Korte of the VIG, however, the situation is more complex. “In the case of Pfizer, for example, you see that the German government has paid an amount to developer BioNTech (Pfizer ed.), and that amount has been returned through a discount on the vaccine.”
Take action
According to The People’s Vaccine, the “overpaid amount” to Pfizer alone on the vaccine is so high that the entire world could be pricked for that amount.
The organization calls on governments to take action against corporate power. But the question is whether the EU can do anything, according to Professor Canoy.
“That depends on the agreements made between the EU and pharmaceuticals,” he says. “If no legally smart agreements have been made, such as a maximum price, the EU can do little.”
In theory, the EU could impose a compulsory license: the companies would then have to share the vaccine’s prescription with a competitor. “But the bar is set very high for good reason,” Canoy says. “I don’t think it will come to that.”
End of the price hike?
The question remains: is this the last increase, or will vaccines become more and more expensive? De Korte does not think the latter will happen. “Vaccines that are still under development will also be on the market. Then there will be more choice. And yes, the more choice there is, the lower the prices.”
Pfizer and Moderna themselves have not yet commented on the price increase. According to De Korte, this is because of ‘price-sensitive information’.
“Pfizer and Moderna are both listed companies. Then you have to deal with all the rules that apply. This is not about a few tens, it concerns billions, also from investors. So the chance that they will disclose price-sensitive information bring, it is very, very large.”
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