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Why does Pfizer deny the public investment in its Covid-19 vaccine?

Why does Pfizer deny the public investment in its Covid-19 vaccine?

Following the announcement that BioNTech and Pfizer’s co-developed Covid-19 vaccine candidate is over 90 percent effective,  Morgenbladet, a leading Norwegian weekly, interviewed us about the implications. While celebrating the news, we pointed out that access will be a major challenge for poor countries, and questioned the ethics of the companies’ projected profit, both given the ongoing pandemic crisis and the public subsidies received.

The following week’s paper contained a response from Pfizer Norway, claiming that that Pfizer is committed to equitable access and that we are «completely wrong»: “Pfizer did not accept a single dollar from the public and funded itself the development of the vaccine. “

Pfizer’s claim is false, and a gross simplification of the complex ecosystem of public investment in vaccine production, which takes different forms at different stages on the road to a viable vaccine: funding to basic research, direct financial support to boost the R&D during the pandemic, securing a market through pre-purchase agreements.

Pfizer itself has not taken public money directly, but BioNTech, with which it co-developed the vaccine, has, for example, received €375 million from the German government and €100 million in debt financing from the EU.  This public subsidy explains why the companies have accepted a somewhat lower price for their vaccine in Europe than in the US – a difference of about 5 percent, according to prices reported by Reuters. Moreover, both American and European authorities have entered into multi-billion dollar pre-purchase agreements with Pfizer/BioNTech before vaccine efficacy had been established, and thereby taken on considerable risk by guaranteeing the companies a market regardless of whether the vaccine works. The vaccine is therefore very much the result of public-private cooperation and financing, as others have also pointed out.

So why would Pfizer go to lengths to deny the contribution of public support? The short answer is to justify the company’s right to profit, and allay concerns that the public is paying twice for R&D and procurement. It also helps to foreclose debates about what might be an ethically justifiable level of profit on a product that everyone needs. It keeps the narrative focused on the benefits of private-sector innovation, and downplays the considerable contribution and risk taken by the public sector. This contestation over the nature of ‘public’ and ‘private’ and the blurry lines between them is not unique to Pfizer/BioNTech. Georgetown scholar Matthew Kavanagh has shown how it plays out in the attribution of credit for Moderna’s vaccine candidate too.

Pfizer and BioNTech have been vocal proponents of pharmaceutical companies’ right to profit during the pandemic: In an interview in July, Pfizer’s CEO Albert Bourla dismissed outright the notion that pharmaceutical companies should not be making a profit on covid-19 drugs and vaccines, saying  “you need to be very fanatic and radical to say something like that right now”. While it remains uncertain what the profit margin from the vaccine will actually end up being, BioNtech’s stock price has skyrocketed since the start of the pandemic, rising from $30 a share in January 2020 to $121 on December 3rd, 2020 – making its funders multi-billionaires in the process. That BioNTech’s headquarters are located in “Gold Mine Street” in Mainz seems strangely prophetic.

Arguing for a profit-free vaccine, however, is no longer a radical position. Even business experts argue that profiting from the pandemic can damage pharmaceutical companies’ reputations and advise them to focus instead on their “brand equity” to secure their longer-term profits. Some companies are heeding this advice, for example Johnson & Johnson and AstraZeneca, who have vowed not to profit from their vaccines, at least during the acute phase of the pandemic.

In its reply to our interview, Pfizer says that everyone agrees that the vaccine should not only be available to “those with deep pockets”; “to succeed, we need a cooperative private sector, supranational cooperation and financing mechanisms to support the private sector”. Pfizer and BioNTech’s practices, however, have not lived up to this lofty rhetoric. The International NGO One puts both BioNTech and Pfizer near the bottom of major vaccine companies, ranked according to their commitment to multilateral cooperation, equitable access policies, fair price deals and support for the COVID-19 Tools Accelerator (ACT-A), theonly mechanism positioned to deliver a coordinated global response. Hopefully public debate on pricing and fair profit will encourage them to improve their ranking.

For more info on the Norwegian Research Council-funded project on public-private cooperation in pandemic preparedness and response: https://www.sum.uio.no/english/research/projects/norways-public-private-cooperation-for-pandemic-p/

About Katerini T. Storeng

Katerini T. Storeng is Associate Professor at the University of Oslo’s Centre for Development and the Environment, where she leads the Global Health Politics research group and is Deputy Director of the Independent Panel on Global Governance of Health. Storeng is also Honorary Associate Professor at the London School of Hygiene & Tropical Medicine.

About Antoine de Bengy Puyvallée

PhD fellow at the University of Oslo’s Centre for Development and the Environment
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1 comments
James says:

Biontech, a Pfizer partner not a normal investment from the EU or the US Government …: as for Biontech, the amount charged, a small amount compared to that invested by Pfizer – was made available when the vaccine was already developed, including in tests end of “PHASE 3” The value made available – in the interests of the EU itself – only to speed up a production phase, and obviously to be able to better “hoard” …