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The ignorance of senators regarding the price of vaccines

techsm5

The opening of the 2023 legislative session promises its share of fireworks beyond those caused by the search for a new Speaker of the House. Drug pricing will be high on the priority list, with a particular focus on the cost of Covid-19 vaccines. Federal funding for the supply of Covid-19 vaccines to Americans will end this month, and therefore most people will pay for their Covid-19 vaccines as they do for their flu shots through their health insurance. Theoretically, this shouldn’t be a problem as we will start treating Covid-19, rightly or wrongly, as we do with the flu, with people being asked to get vaccinated at the appropriate times on a annual.

However, with the shift from government-funded Covid-19 vaccines to private payers, so too has the price of the vaccine changed. Pfizer announced that it plans to charge between $110 and $130 for its vaccine, a significant increase from the initial $39 for the two-dose regimen people needed when vaccines began rolling out in December 2020. Needless to say, this hasn’t gone unnoticed by Congress. Specifically, Senators Elizabeth Warren (Massachusetts) and Peter Welch (Vermont) sent a letter to Pfizer CEO Dr. Albert Bourla demanding that Pfizer provide more information about this price change which they called ” improper profit”. They went on to say that this price hike “could lead to Covid-induced deaths of many uninsured Americans who may not be able to afford the vaccine. Worse, Pfizer’s price hike could pave the way for other vaccine makers like Moderna and Novavax to raise prices for their vaccines, hurting Americans seeking protection from Covid-19 and potentially worsening a public health crisis. In progress. (By the way, why aren’t these senators paying attention to why 10% of Americans have NO health insurance?)

This price increase must be put into perspective. First of all, this is the LIST PRICE of the vaccine from Pfizer. This will be the starting point for negotiations with insurance companies as they determine which vaccine will receive preferential treatment on their respective lists of preferred drugs to provide to their members. The prices the insurance companies negotiate with Pfizer, Moderna and Novavax will not be made public. However, in all likelihood, the NET PRICE, the price that vaccine innovators actually receive, will be significantly lower than the stated range of $110 to $130. This is due to the convoluted healthcare system we have in the United States. With the federal government irrelevant, various intermediaries are now involved, all demanding their own share of vaccine sales.

For the sake of discussion, let’s say the actual net price Pfizer receives for its Covid-19 vaccine is $75. This is still a significant increase from its original price. How can Pfizer justify such an increase? In fact, compared to the price of other vaccines, a cost of $75 is reasonable. A check of high-dose seasonal flu vaccine prices (for people over 65) at places like CVS, Walgreens, and Walmart shows prices ranging from $70 to $95. Vaccines are even more expensive for diseases like meningitis ($205), poliomyelitis ($115) and MMR (measles, mumps, rubella – $135). Moreover, the Covid-19 vaccines have provided extraordinary value. It has been estimated that if these vaccines had not been available for the past two years, the United States would have seen four times as many deaths, 1.5 times as many infections and 3.8 times as many hospitalizations. These vaccines saved US$1,000 MILLION in additional medical costs. One cannot argue with the value they bring.

Finally, the Covid-19 virus having constantly mutated, the Covid-19 vaccines also had to be changed. This means more research, more studies and changes in manufacturing processes. All of this will continue for the foreseeable future, as Covid-19 will likely be with us for years.

It is unfortunate that these senators do not seem to understand this. They don’t seem to understand the difference between list prices and net prices, the value that Covid-19 vaccines have provided, or the need to continue funding biopharmaceutical R&D. Instead, they opt for headlines. It’s a shame.

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techsm5

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