Health or wealth?: Vaccines for the EU suffer price increases
August 29, 2021
2 min read
What's going on here?
Two major Covid-19 vaccine providers, Pfizer and Moderna, have raised their EU vaccine prices.
What does this mean?
Pfizer and Moderna’s newly signed contracts with the EU reveal that Pfizer has increased the price of its Covid-19 vaccine from €15.50 to €19.50 per dose whilst Moderna’s price per shot has risen from €19 to €21.50. These price surges translate into increases of more than a quarter and more than a tenth for Pfizer and Moderna respectively. Following the deals, each group is set to produce tens of billions of dollars in revenue this year, with Airfinity predicting the Pfizer shot’s sales to hit $56bn whilst Moderna’s will reach $30bn.
To contextualise these deals, Phase 3 clinical trial data released prior to the contract renegotiations showed that vaccines from these two pharmaceutical giants had higher efficacy rates than some rivals, namely AstraZeneca and Johnson & Johnson. These factors have enhanced Pfizer’s and Moderna’s appeal, especially when combined with health authority concerns over a suspected link between the cheaper AstraZeneca shot and rare blood clots.
What's the big picture effect?
As illustrated above, Pfizer and Moderna are seen as more effective and safer vaccine options. Against a background of booster shots or third jabs becoming more likely and the spread of more infectious variants (like the Delta variant), this has meant that such options are in greater demand, leading to Pfizer and Moderna hiking up their EU prices. Many experts and campaigners see this decision as a capitalisation on market power rather than an attempt to cover increasing costs. This stands in contrast to how AstraZeneca sells its shots at cost value and, according to Oxfam, corporations such as Pfizer and Moderna are charging governments “as much as $41 billion above the estimated cost of production”.
However, this approach isn’t as simple as demand + price rise = increased revenue and profits: just because the pharmaceutical giants can boost prices, it doesn’t mean they should.
A key aim is to increase vaccination coverage, which may be hampered if vaccines are too costly for the EU. It is vital that those living in lower-income areas are vaccinated since such areas are often more densely populated, allowing the virus to spread faster and/ or create new variants. However, as Bruce Y. Lee (writing for Forbes) highlights, if these price increases are passed from EU governments to lower-income communities, such communities may not be able to afford vaccinations and are hence less likely to get vaccinated. If such populations have a greater vaccine uptake, then the rest of society benefits as an epidemic is stopped sooner. The longer the pandemic is drawn out, the more the suffering continues to be a drain on the economy, detrimentally affecting society as a whole.
In addition to this, ethical questions arise concerning the propriety of capitalizing on a time of global crisis, putting the interests of money-hungry shareholders over those of populations in need of greater vaccine supplies and immunity from the potentially deadly Covid-19. Health and wealth are at odds with one another. Also, funds available to EU governments to conduct valuable public health campaigns may subsequently be depleted as vaccine prices rise.
Report written by Lauren Ainscough
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