The impact of COVID on our lives and economies can, in many sectors, only be described as seismic. Casualties include the commercial property market, the hospitality and entertainment industries, and disruptions to supply chains have led to effects on a range of manufacturing and retail businesses. It seems like eons ago (in fact it was just last year, in the early days of the global pandemic) that I wrote about Supply Chain Disruption Going Viral, and considered how troubles in China were affecting many global pharma manufacturers’ abilities to make key ingredients. There were widespread concerns at the time that the pharma industry – often considered to be as ‘recession proof’ as an industry can be – would see significant financial challenges in the months ahead.
I was therefore quite curious, when asked to write something on this topic, to discover how the pharma industry had actually fared. Has pharma weathered the [cytokine] storm, or are pharma companies accumulating debt faster than they can say “coronavirus pandemic”?
Ill people buy medicines
It seems an obvious thing to say, but ill people buy medicines. Panic buying in the UK at the start of the COVID pandemic wasn’t limited to toilet paper – I distinctly remember finding it impossible to lay my hands on a packet of paracetamol for several weeks. Right from the start, people stocked up on preventative and curative products, in the hope that they would be able to stave off the worst infections.
On the other hand, it must be acknowledged that cut-backs and reduced access to other medical services led to shortfalls in other areas. I wrote in February this year about my concerns that, as we turned our gaze from other illnesses in our quest to “beat the virus”, we might approach a point at which more people died from other diseases, as a result of inaccessibility, than from COVID itself. Yet it was still saddening to read, a couple of months later, that a large systematic review covering 20 countries revealed a 33% decrease in healthcare utilization.1 This could well be expected to have had an impact on diagnoses, drug prescriptions, uptake and purchasing during the pandemic.
Naturally, once COVID-specific products became available, people clamoured for access. Governments of developed countries pre-ordered millions of doses of [at the time unproven] vaccines, or battled to keep batches on home soils for domestic use.
Injections of cash
According to a Forbes article published in July 2021,2 US giant Pfizer now expects to generate $33.5 billion from COVID vaccine sales alone in 2021. This is around 30% higher than the original estimate of $26 billion, with the new projections being based on the 2.1 billion doses of the Pfizer/BioNTech vaccine that the company expects to manufacture and deliver by the end of the year. As Pfizer's partner, BioNTech is benefiting from Pfizer's financial resources, global manufacturing capacity, and regulatory expertise. The company's mRNA technology was critical to the success of the vaccine, and that success is expected to drive BioNTech's fortunes in the coming years. However, some analysts argue that – because the company doesn't have to split profits with a partner – US pharmaceutical and biotechnology company Moderna is likely to make the most money from its own COVID vaccine, over the long run.
In August, an article in Reuters3 estimated that Pfizer, BioNTech and Moderna have together locked up over $60 billion in sales of COVID vaccines over 2021 and 2022 – by my calculation, that’s 4% of the total global pharma spend in 2019. Sales agreements already in place include supply of the initial two doses of their vaccines, as well as billions of dollars in potential boosters as wealthy nations plan to deliver winter booster shots “in a market that could rival the $6 billion in annual sales for flu vaccines for years to come.”3
In contrast, AstraZeneca’s pledge to ‘not profit' from their COVID vaccine, which was co-developed with the UK’s Oxford University, resulted in comparatively lower earnings. AstraZeneca’s COVID vaccine is reported to have generated $1.2bn in the first half of 2021,4 with sales tripling in the second quarter compared with the first, but the 2021 total income from the vaccine is unlikely to come anywhere near that of the other three companies presiding over the Western COVID market (Pfizer, BioNTech, Moderna). In an indus...
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