This articleFrom WeChat Official Account:Beijing Business Today (ID: BBT_JLHD), Authors: Tao Feng and Chang Lei; Editor: Hu Ke. Original title: “$19.50 for the U.S. Only: Pfizer Vaccine Sparks Pricing Controversy.” Header image from: Visual China Group
Following the announcement that the Phase III clinical trial efficacy of the COVID-19 vaccine reached 90%, news emerged on November 11 (Beijing time) that BioNTech, Pfizer’s German pharmaceutical partner, stated the benchmark price for the COVID-19 vaccine would be $19.5 per dose. However, media reports indicated that Pfizer unilaterally denied this pricing. A Beijing Business Today reporter contacted Pfizer for comment, but as of press time, no response had been received from the company. Questions have arisen as to whether the two parties have diverged over pricing and whether Pfizer’s COVID-19 vaccine will successfully reach the market.
I. Conflicting Accounts
On November 11 (Beijing Time), BioNTech announced that the benchmark price for its COVID-19 vaccine would be $19.50 per dose, applicable to the United States and other developed countries.
On the same day, Pfizer Inc. stated to the media that the U.S. price for its COVID-19 vaccine would be $19.50 per dose.(approximately RMB 128.92 per dose)is based on the company's agreement reached with the U.S. government in July, under which the price is $39 for two doses, or $19.5 per dose,To provide the U.S. government with 100 million doses of potential vaccine, with an option to purchase an additional 500 million doses under separately negotiated terms. Furthermore, it emphasized thatThis price applies only to the United States; pricing strategies for other countries will comprehensively consider volume, advance commitments, and the principles of equity and affordability.
A Beijing Business Today reporter contacted Pfizer for an interview regarding this matter, but no response had been received by the time of publication.
In April this year, BioNTech and Pfizer announced a joint collaboration to develop a COVID-19 vaccine. Under the terms of the agreement, Pfizer will pay BioNTech an upfront payment of $185 million, including $72 million in cash and $113 million in equity investment. Pfizer and BioNTech will equally share the development costs.
Why Did the Two Collaborating Parties Develop Differences?
“It is quite normal for the two parties to have disagreements over pricing,” pointed out vaccine expert Tao Lina. In fact, factors influencing vaccine pricing are not limited to costs; more importantly, they depend on the size of the market. Specifically,Typically, government procurement prices for vaccines are driven down to very low levels.Given the sufficiently large market size, profits will naturally rise, much like the difference between retail and wholesale.
“In the aforementioned scenario, the United States has communicated a sufficiently large potential procurement volume to Pfizer, enabling the company to offer a more appropriate price. In contrast, BioNTech announced its pricing without any premise regarding market scale, making it difficult to evaluate that price,” stated Tao Lina.
II. Transportation of Tens of Thousands
Nevertheless, the $19.50 vaccine still appears to be a good value. Is $19.50 considered expensive for a COVID-19 vaccine?
“It is actually difficult to make estimates without knowing the market size,” explained Tao Lina. He noted that if viewed in the context of national procurement, this price is slightly high. Since the COVID-19 vaccine produced by Pfizer is an mRNA vaccine, its costs are primarily incurred during the preclinical animal trials and human clinical trials. The subsequent manufacturing process is very simple, akin to a “copy-and-paste” operation, meaning that the production cost is very low.
In this light, Pfizer’s COVID-19 vaccine does not appear to be costly; however, within the mRNA vaccine supply chain, one critical aspect cannot be overlooked—storage and transportation. Tao Lina points out that a fatal flaw of Pfizer’s nucleic acid vaccine lies in its storage requirements.According to Pfizer, its vaccine must be stored and transported at -70°C.
What Does -70°C Mean? Ice cream requires a cold chain transport temperature of only -20°C, while expensive tuna requires a cold chain temperature of just -45°C.This also means that most cold chain systems struggle to meet the transportation requirements for this vaccine.
How long can this vaccine be stored at room temperature? Only a brief five days. According to Tao Lina, most vaccines currently on the market have a shelf life of 2–3 years at room temperature. This means that all vaccination sites must be equipped with dedicated medical refrigerators for storing this vaccine, with each unit costing over RMB 10,000.In this scenario, the $19.5 vaccine appears significantly less attractive.
Financial commentator Guo Shiliang also pointed out,In fact, given the transportation and storage costs of this COVID-19 vaccine, the price of $19.50 is somewhat low and likely insufficient to cover transportation expenses. Moreover, with substantial logistics costs, mass vaccination appears impractical in many regions with underdeveloped cold-chain systems.
“However, behind the relatively low pricing lies the special context of the pandemic; thus, during production, greater profit margins may not have been factored in. For partner companies, this may have constrained their profit potential, leaning more toward a public-welfare orientation, and possibly failing to even cover production costs,” said Guo Shiliang.
III. Is a Happy Event Imminent?
Nevertheless, Pfizer has taken a clear lead in the race for COVID-19 vaccines. On November 9, Pfizer and Germany’s BioNTech announced that a comparison of cases between vaccinated participants and those who received placebo showed that the vaccine was more than 90% effective in preventing symptomatic COVID-19, starting seven days after the second dose. This means protection against COVID-19 is achieved 28 days after the initial vaccination, following the administration of two doses.
However, a former lead CMC reviewer for vaccines at the U.S. Food and Drug Administration (FDA) argued that Pfizer’s public claim of “more than 90% efficacy” was problematic. The definition of “90%” was unclear, the clinical trial had not yet reached its endpoint, and the data were incomplete. Chinese drug regulatory authorities consider one of the criteria for vaccine efficacy to be the ability of antibodies to remain effectively detectable for six months, whereas the Phase III trial for this vaccine had lasted less than three months at the time.
Pfizer’s new CEO, Albert Bourla, explained that the company would not seek Emergency Use Authorization from the U.S. FDA based on these interim efficacy data, as more safety data are still needed. Furthermore, as part of the ongoing clinical study, the collection of safety data will continue. In fact, the final vaccine efficacy percentage may change as safety and other data continue to be collected.
Will Pfizer’s COVID-19 vaccine be successfully produced? Tao Lina is optimistic about this. Tao stated that he was not surprised by the current progress of Pfizer’s mRNA vaccine. In his view, there is a high degree of confidence in the success of mRNA vaccines, as Moderna’s Phase I clinical trials had already demonstrated the feasibility of nucleic acid vaccines from multiple perspectives. Moreover, nucleic acid vaccines essentially mimic microorganisms and are associated with minimal side effects.
In fact,Currently, the only vaccines that can be described as having severe side effects are the inactivated polio vaccine and the Bacillus Calmette-Guérin (BCG) vaccine. The vaccines involved in the previous influenza vaccine incident in South Korea were products from different companies and were not related to the vaccines themselves.“Coupled with low production costs, nucleic acid vaccines can become the direction for future vaccine development,” pointed out Tao Lina.
Guo Shiliang stated that, generally speaking, following the completion of Phase III clinical trials and the verification of the vaccine’s safety and efficacy, the process will proceed to the regulatory approval stage. Upon obtaining marketing authorization, production will commence. However, given the complex manufacturing processes involved in vaccine production, stringent control over the production phase is critical. Only after completing regulatory approval and passing sampling inspections of the finished products will the vaccine enter the distribution and sales phase.
“From the current perspective, Pfizer’s COVID-19 vaccine should await regulatory approval for market launch. There is still some time before mass production can begin, but it is believed to be imminent. However, given considerations of safety and efficacy, more rigorous sampling and analysis are expected to be conducted to ensure full preparedness before entering the production phase,” said Guo Shiliang.
This article is from the WeChat official account:Beijing Business Today (ID: BBT_JLHD), Authors: Tao Feng, Chang Lei; Editor: Hu Ke