Pharmaceutical giant Pfizer has announced its intention to charge $1,400 for a five-day course of its antiviral drug Paxlovid. This marks a significant increase from the $529 the US government previously paid for the same quantity of the drug during the pandemic. The Wall Street Journal reports that Pfizer communicated the new pricing in a letter to clinics and pharmacies.
Despite the hike, insured patients are expected to bear a lesser burden due to insurance coverage. Additionally, Pfizer is anticipated to offer financial aid to patients, including discounts and assistance with out-of-pocket expenses. Pfizer has seen considerable profits from its COVID-related products, especially its mRNA vaccines. However, critics argue that the company’s success in the vaccine market wouldn’t have been possible without the significant public investment in mRNA technology.
The US government’s expenditure on COVID vaccine development is estimated to range between $18 billion to $39.5 billion, as per the Congressional Budget Office. While Pfizer’s partner, BioNTech, received a $445 million grant from the German government, the US directly funded other companies like Moderna and Johnson & Johnson. Many experts attribute the rapid market introduction of Pfizer’s vaccine to advances in mRNA research.
Pfizer justifies the Paxlovid pricing based on the drug’s role in reducing COVID-19-related hospitalizations and deaths. A spokesperson from Pfizer stated that all Paxlovid doses labeled for “emergency use authorization” would remain free for patients until the end of 2023. Furthermore, the company has committed to providing the drug free of charge to Medicare, Medicaid, and uninsured patients through a US Government patient assistance program until 2024.
Despite these assurances, the price hike has been met with criticism. Epidemiologist Eric Feigl-Ding commented that Pfizer’s decision was “shameful” and accused the company of excessive greed. Pfizer’s shares subsequently dipped during Thursday’s trading session. Pfizer’s move comes after other pharmaceutical companies, like Moderna, increased their vaccine prices. While the US government initially paid $19.50 per dose for Pfizer/BioNTech’s vaccine, the revised price for the updated version reached $30.50 per dose.
In contrast, Moderna priced a single vaccine dose at $130, four times more than the US government’s cost. Amid these changes, Pfizer recently lowered its sales forecast for both Paxlovid and its vaccine developed with BioNTech, attributing the decrease to reduced demand for pandemic-related products. Pfizer’s CEO, Dr. Albert Bourla, acknowledged the nation’s “COVID fatigue” and announced a $3.5 billion cost-cutting initiative for the company.