Shareholders Raise Questions on COVID-19 Pricing Ahead of Annual Biopharma Meetings

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Throughout 2020, the U.S. government spent billions of dollars to help finance the development of COVID-19 vaccines and therapeutics. Now, shareholders of the companies that received this financing are eager to see how those public funds will impact the pricing of these treatments.

According to the Financial Times, shareholders have submitted hundreds of proposals to the leadership teams of companies seeking answers to environmental and social issues. In the biopharmaceutical industry, shareholders have raised concern over the pricing of vaccines and therapeutics used in the ongoing battle against COVID-19. Specifically, Pfizer and Johnson & Johnson have received a significant number of requests related to greater disclosure of their pricing policies. Because of multiple contracts by various governments and how the companies are being reimbursed, there is significant variability in the pricing of the COVID-19 medicines. 

The Pfizer and BioNTech vaccine was initially priced at $19.50 per dose for the first 100 million doses, while the Moderna vaccine had a range of $25 to $37. The Johnson & Johnson vaccine was initially pegged at a not-for-profit price of $10.

All the public funding into the development and distribution of the drugs has sparked interest from shareholders in how those monies will offset any potential profits the companies supported by the federal entity previously known as Operation Warp Speed. Multiple companies received funding, including Maryland-based Novavax, AstraZeneca, and Emergent Biosolutions. The Financial Time article only hones in on shareholder inquiries for Pfizer and Johnson & Johnson. It is almost certain that shareholders in Moderna and the other companies are submitting similar questions to the leadership teams of those companies.

Life sciences giant Johnson & Johnson struck a deal with Biomedical Advanced Research and Development Authority (BARDA) valued at nearly $1 billion to develop its vaccine, which received Emergency Use Authorization at the end of February. Now, millions of single-shot doses are being administered across the United States to bolster vaccination efforts already underway with the previously authorized Moderna and Pfizer/BioNTech vaccines.

In April 2020, Massachusetts-based Moderna also received $483 million in funding from BARDA to support the development of its two-dose mRNA shot. That vaccine was ultimately authorized in December.

Pfizer did not receive U.S. funds for its vaccine development, which eventually received authorization in December. However, the company did sign delivery contracts with the U.S. government worth billions of dollars.

Peter Reali, a senior director at global investment manager Nuveen, explained to the Financial Times that drug pricing for these COVID-19 medications is important to the shareholders in these companies. The majority of people who are receiving vaccines are not seeing any upfront costs, however, insurance companies and the like are being billed. Reali said it’s these prices the shareholders are interested in disclosing.

Trinity Health, one of the Pfizer petitioners, said charging a high price for the COVID-19 vaccine “could damage Pfizer’s reputation and create a regulatory risk for the company,” the Financial Times reported.

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