With so much attention placed on the rapid development of a coronavirus vaccine, there’s one that hasn’t quite been finalized yet: the price of the vaccine.
Now, as multiple pharmaceutical and biotech companies begin late-stage clinical testing of their vaccine candidates, the question of price is being evaluated.
U.S Government Sets Global Benchmark
On July 22, the U.S government announced a $2 billion deal with Pfizer Inc and German biotech BioNTech. The deal, which is contingent on an approvable vaccine, guarantees enough vaccines to inoculate 50 million Americans at the cost of about $20 per dose, or $40 per person.
That price is roughly the same as the cost of an annual flu shot. The government hopes that its deal will put pressure on other drug makers to set similar prices.
However, this deal is unique because, unlike other vaccine deals signed by the government, Pfizer and BioNTech will not receive payment until their vaccine proves to be safe and effective in a large clinical trial. Furthermore, since Pfizer’s contract does not include research funding from the federal government, it’s not under pressure to keep prices low.
At $40 per person, manufacturers have the opportunity to profit on their efforts while still ensuring the vaccine is affordable for all Americans.
Many Americans Will Get Vaccine At No Cost
Americans with health insurance will likely receive the COVID-19 vaccine at no additional cost. The Coronavirus Aid, Relief, and Economic Security (CARES) Act passed by Congress in March defined the COVID-19 vaccine as a “preventive health service,” which means insurance plans are required to cover the entire cost.
“As a result of the CARES Act, if you have private health insurance in this country, you will not have to worry about any out-of-pocket costs when it comes to COVID-19 vaccines,” said Dr. A. Mark Fendrick, director of the University of Michigan’s Center for Value-Based Insurance Design (V-BID) in Ann Arbor.
Some Drugmakers Plan Not-For-Profit Pricing
While some companies, like Moderna, Pfizer, and Merck & Co. have all said they plan to sell their vaccines at a profit, others have not. Johnson and Johnson, for example, is in talks for vaccine deals with the European Union, Japan, and the Bill and Melinda Gates Foundation. They intend to price their vaccines on a not-for-profit basis while the pandemic is ongoing.
AstraZeneca, meanwhile, agreed to provide the United States with 300 million doses of the vaccine it is developing with Oxford University researchers in exchange for $1.2 billion in upfront funding. The cost per dose for AstraZeneca’s vaccine comes out to about $4 per dose, a total of $8 per person since most drug makers agree two doses are needed.
At the price of $4 per dose, AstraZeneca can still use some proceeds to offset research and development costs.