Pfizer planning steep price hike for COVID-19 vaccine.
The company is considering charging between $110 and $130 per dose once sales transition to the private market, an executive said Thursday.
Pfizer is considering hiking the price of its COVID-19 vaccine by roughly four times what it currently charges as it prepares for sales in the U.S. to shift from government contracts to the private market.
The pharmaceutical company is targeting between $110 and $130 per adult vaccine dose after that transition, said Angela Lukin, Pfizer’s head of global primary care and U.S. president, on an analyst and investor call Thursday.
“We feel confident that this range will be seen as highly cost effective and definitely one that will help to enable and ensure appropriate access and reimbursement to the vaccine,” Lukin said on the call. Discussions with insurers are still in early stages, she added.
In recent contracts with Pfizer, the U.S. government has been paying an effective price of around $25 to $30 a dose for the company’s vaccine, which remains the most widely used of the available options in the country. However, with federal COVID-19 funds drying up, the Biden administration has planned to stop buying vaccine doses in bulk and shift distribution to the private market, likely by early next year.
Lukin said that Pfizer expects people with government insurance like Medicare and Medicaid, or who are covered via commercial plans will not have to pay out of pocket to get vaccinated.
The pricing described by Lukin is higher than what investors have been expecting, according to analysts from SVB Securities and Cantor Fitzgerald, and above the $64 to $100 per dose range previously sketched out by competitor Moderna in September.
Shares in Pfizer climbed by more than 4% Friday morning, while Moderna stock jumped nearly 6%.
The price hike could open up Pfizer to new criticism of its vaccine pricing, which has remained an issue throughout the pandemic even at the prices it currently charges for government sales. Umer Raffat, an analyst at Evercore ISI, called Pfizer’s plans “a mistake,” noting that, while such a move makes it more likely the company meets Wall Street estimates, it is “clearly bad optics.”
On the call, Lukin defended Pfizer’s planned pricing as cost effective for the vaccine’s value. She also said the transition to private market sales would mean higher costs as the company switches to a single-dose vial and handles commercial distribution.
“While a commercial marketplace presents new complexities,” Lukin added, “we are confident we have the capabilities to make this transition successful.”
Pfizer earned more than $22 billion from sales of its COVID-19 vaccine, branded as Cominarty, over the first six months of the year. It has forecast annual sales reaching $32 billion this year.
Published Oct. 21, 2022