After months of battling the coronavirus pandemic, news of effective vaccines has given the world hope. Millions of doses of vaccines being developed by Pfizer-BioNTech, Moderna and AstraZeneca-Oxford are already coveted by countries across the globe.
However, pharmaceutical companies and governments are under pressure to make the vaccine affordable for everyone. This raises the question of whether drug companies will be able to make considerable profits from these vaccines.
India will be the largest buyer of Covid-19 vaccines in the world with 1.6 billion doses, according to a global analysis. This could cover 800 million people, or 60 per cent of its population, and will be enough to develop herd immunity.
It is interesting to note that before Covid-19 lockdowns shut the world down, vaccines were not the most profitable products for pharma companies. According to a Quartz report, the global market for vaccines was $24 billion before the coronavirus pandemic, which was just a sliver of the annual revenues of pharmaceutical companies which exceeded $1 trillion.
Moreover, in the case of Covid-19, companies have to make the vaccines available at lower prices to millions of people around the world, which may reduce the profit margins for the companies at least in the beginning. The vaccine made by AstraZeneca could cost people as low as $3, while Moderna has priced its vaccine at $25 to $37 per dose.
Analysts quoted by Financial Times have said that the vaccine market for Covid-19 could be as much as $10 billion a year. They added that even though companies pledged to make the vaccine available on a ‘non-profit basis’ during the pandemic, they may be able to mint money after it is over.
According to the Quartz report, another way for pharma companies to make money from the vaccines is not the vaccine itself, but the patents on how it was developed. Pharma entities generally apply for patents of their drugs to prevent other countries from developing a similar vaccine and using it without a license. These patents last for 20 years, and there can be multiple patents on one drug.
Another factor the companies have to worry about is cold chain storage facilities that are posing a challenge to many countries. The Pfizer-BioNTech candidate requires extreme temperature facilities for storage, while the Moderna and AstraZeneca candidates can be stored in hospitals or clinics. But the latter needs continued storage which will be difficult for developing countries without access to uninterrupted power.