Pfizer’s vaccine maximizes profit, not the greater good | Column
The vaccine is great, but so will be the profits, writes the dean of University of Miami’s business school.
A nurse draws a dose Wednesday of the first of the two Pfizer-BioNTech COVID-19 vaccinations for a hospital worker at the facility in Chicago.
A nurse draws a dose Wednesday of the first of the two Pfizer-BioNTech COVID-19 vaccinations for a hospital worker at the facility in Chicago. [ CHARLES REX ARBOGAST | AP ]
Published Dec. 23, 2020|Updated Dec. 23, 2020

Pfizer just inked a second deal with the federal government to supply an additional 100 million doses of its mRNA COVID-19 vaccine by July 2021. This is on top of Pfizer’s earlier deal for 100 million doses, currently being shipped. At around $20 per dose, Pfizer shareholders will do nicely, and the Pfizer CEO cashed in $5.6 million in stock at the time of the FDA’s emergency use authorization.

Pfizer deserves enormous credit for the speed with which its vaccine secured the Food and Drug Administration’s approval. But Pfizer’s vaccine strategy was designed from the outset to maximize shareholder profit, not the greater good.

John Quelch
John Quelch [ Provided ]

Pfizer set out to be first across the finish line and reap a public relations bonanza. That’s why it pursued an mRNA vaccine, which can be developed and manufactured much faster than traditional vaccines.

But Pfizer’s vaccine has to be stored at minus 70 degrees Celsius to retain its efficacy. Developing countries do not have and cannot afford such a cold chain. That means Pfizer is off the hook to provide low- or no-cost doses to billions of people in poorer nations. The Moderna vaccine, also an mRNA vaccine, was designed to require normal vaccine refrigeration at around minus 20 degrees Celsius .

Note, also, that Pfizer declined U.S. government subsidies to fund its vaccine development. This preserved Pfizer’s negotiating independence, avoided bureaucratic delays and helped Pfizer get to the finish line first. Taking no subsidies enabled Pfizer to deflect any government pressure to make its vaccine available at lower cost.

There’s another problem. Both the Pfizer and Moderna vaccines require two doses with 21- and 28-day intervals, respectively, between vaccinations. Typically, this will result in 50 percent slippage; half those who receive the first shot will not return for the second. Some will forget, others will experience side effects, and others will believe wrongly that one jab is good enough.

Meanwhile, Britain’s AstraZeneca has developed an equally effective COVID-19 vaccine that requires normal refrigeration and can therefore use existing vaccine supply chains that extend to rural areas. The AstraZeneca vaccine is being sold at $2 per dose versus $20 per dose (that is, $40 per person) for Pfizer’s. AstraZeneca has pledged not to profit from COVID-19 vaccine sales and to waive patent protections. Pfizer has done neither.

Pfizer’s strategy is simple. Be first to market and make a boatload of money by “skimming the cream,” supplying vaccines to those willing to pay. Pfizer has cut deals at high prices with about 20 developed countries. Their government agencies can’t reject the Pfizer vaccine as too expensive because they can’t ask their frontline healthcare workers to wait for a cheaper alternative. They have to act now.

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The game-changing vaccine that the world is waiting for is the single dose Johnson & Johnson vaccine whose clinical trials conclude in January. Once approved and in production, Pfizer’s vaccine will become an afterthought. But the J&J results are uncertain and until the results are in, Pfizer and Moderna are the only game in town. That’s why Pfizer wanted to book a second big order now before the J&J results come in. And the U.S. government, under pressure to vaccinate all citizens as fast as possible, and mindful that Pfizer could easily sell its production capacity to other governments around the world, also had to move now to cut a second deal with Pfizer.

John A. Quelch is dean of the University of Miami Patti and Allan Herbert Business School and a professor in the Miller School of Medicine’s Department of Public Health. He is coauthor of “Choice Matters: How Healthcare Consumers Make Decisions.” He wrote this exclusively for the Tampa Bay Times.