The U.S. Government is putting its shoulder to the wheel in an effort to develop a vaccine to fight the COVID-19 pandemic.
Billions of U.S. tax dollars are being committed to Operation Warp Speed to research, develop, manufacture and distribute several vaccines to fight the coronavirus.
With such a public investment, it’s our hope the vaccine will be free for at least the low-income.
Sen. Patty Murray, a Washington state Democrat, has proposed that the current debate on another relief package include $25 billion to ensure the vaccine is free and available to every American.
To date, five companies have accepted the U.S. challenge to make the vaccine their first priority, requiring them to redirect the efforts of thousands of employees.
Typically, big pharmaceuticals shy away from developing vaccines because they’re not big money-makers. In the U.S. most vaccines sell for between $16 and $25 per dose. In countries with nationalized health programs, $5-$10.
Either way, a pittance compared to drugs that treat chronic diseases such as diabetes, cancer and heart disease, among others.
Pharmaceutical companies argue that because drugs are expensive and time-consuming to develop — usually five to 10 years — they must demand high prices.
But with U.S. taxpayers bearing the responsibility for a COVID-19 vaccine, that argument falls flat. We’ll be paying companies just for trying.
Take for instance the company Novavax. Despite having no products on the market, Novavax was awarded $1.6 billion for clinical studies and the development of a vaccine for COVID-19. In return, Novavax has said it would deliver 100 million doses, possibly by the end of the year.
As expected, its shares on the stock market soared by almost 30% the next day.
It can’t lose.
U.S. tax dollars are also backing vaccine efforts by Moderna Therapeutics, Johnson & Johnson, Pfizer, Merck and AstraZeneca.
Worldwide, at least 150 vaccines are in development. That’s good. Without global access to a variety of COVID-19 vaccines, it will be impossible to get a pandemic this size under control. Also, because the virus affects different demographics differently, scientists say more than one vaccine will be necessary for those of different ethnicities, ages, and underlying conditions such as heart disease, Type 2 diabetes, and other risk factors.
WITH SO much government buy-in will the pharmaceutical industry feel compelled to give the public a price break?
Not willingly.
In recent Congressional hearings, officials with Pfizer refused to provide details, saying only that its price would reflect the “extraordinary times” of the pandemic. AstraZeneca and Johnson & Johnson said they would sell their vaccines at cost of production — at least until the panic of the pandemic subsides. And Moderna and Merck said they would set prices exceeding their manufacturing costs.
Even with the government handouts, analysts say the most lucrative industry in the world feels no compunction to change its business model. From the first year of production alone they stand to make billions in sales.
