COVID-19 Vaccines: A New Era for Price Reform and Access

Strategic Insights -

The United States has pre-ordered hundreds of millions of COVID-19 vaccine doses, with the government paying billions to pharmaceutical companies like Pfizer and Moderna. This approach has eliminated barriers to access for millions of people, including those who are uninsured or undocumented. However, once the federal health emergency ends, the government's bulk purchasing agreements may cease, potentially leading to increased costs and reduced access for those without health insurance. On the other hand, this approach could pave the way for drug price reform, allowing federal programs like Medicare to negotiate prices.

Key Takeaways:

  • The US government has paid over $1.5 billion for bulk purchasing agreements for COVID-19 vaccines, securing a price of $15 per shot for Moderna's vaccine and $19.50 per shot for Pfizer's vaccine.
  • Pharmaceutical companies have profited from the coronavirus vaccines, with Pfizer's 20% profit margin on its vaccine, despite the discounted price.
  • The government's ability to negotiate as the sole purchaser of vaccines in the US explains part of the bargain prices, but pre-purchasing before the vaccines were available has also held down prices.
  • IQVIA estimates global spending on coronavirus vaccines will top $157 billion over the next five years, with competition from new manufacturers potentially driving down prices.
  • The US government is expected to continue negotiating bulk purchasing agreements with vaccine makers for the duration of the public health emergency.
  • People who are uninsured often hold essential worker jobs that do not offer health benefits, and may be unable to work from home, take time off work or social distance, making them at risk of having limited access to vaccines.
  • Uninsured adults are often able to access routine vaccines at federally funded health clinics, but coverage isn't guaranteed, and people without health insurance are often reluctant to seek out medical treatment for fear of the costs.

Statistics:

  • $15 per shot for Moderna's COVID-19 vaccine as part of the bulk purchasing agreements.
  • $19.50 per shot for Pfizer's COVID-19 vaccine as part of the bulk purchasing agreements.
  • 20% profit margin on its vaccine for Pfizer.
  • $157 billion estimated global spending on coronavirus vaccines over the next five years (IQVIA).
  • $1.5 billion over for bulk purchasing agreements for COVID-19 vaccines.
  • The US government has pre-ordered hundreds of millions of COVID-19 vaccine doses.

Sources:

  • The Philadelphia Inquirer (2021)
  • Kaiser Family Foundation (Larry Levitt, executive vice president for health policy)
  • Pfizer (Frank A. D'Amelio, chief financial officer)
  • IQVIA Institute for Human Data Science (Murray Aitkin, senior vice president and executive director)
  • Vanderbilt University (Stacie Dusetzina, associate professor in the Department of Health Policy)
  • The Philadelphia Inquirer (2021)
  • Tribune Content Agency, LLC (distributor)