Pfizer and Moderna’s record-breaking pandemic profits are about to come to an end as the Biden administration no longer plans to purchase COVID-19 vaccines for public distribution.
Until now, the federal government has been responsible for purchasing COVID-19 vaccines and distributing them to Americans at no charge. However, the Biden administration has said that the upcoming batch of recently approved, Omicron-specific doses will be the last to be purchased on the government’s dime.
In a new financial filing, Moderna discloses receiving another $300M from the U.S. government in March 2022 for vaccine development.
Excluding dose purchases and NIH contributions, public support for mRNA-1273 R&D now stands at a staggering $1.7 billion dollars (!). pic.twitter.com/vyT3KZkAkj
— Zain Rizvi (@zainrizvi) May 5, 2022
There is likely to still be some demand from the private sector for COVID-19 vaccines, but it won’t be nearly as high as it was when the government was buying. Vaccine uptake has been on a steady decline since April, and is currently at its lowest point of the pandemic, with more than 223 million Americans having already been fully vaccinated.
Private purchasers are also likely to buy fewer doses, and for a lower price. The government bought millions more doses than it needed to ensure that there wouldn’t be a shortage when Americans needed them most. That over-purchasing has led to some doses being wasted and thrown away due to expiration. Private purchasers will have no such need to buy so much more than needed, and will also likely be shrewder when negotiating price. (RELATED: Prestigious Pfizer Fellowship Tells Whites And Asians Not To Apply)
“These companies, for one, are not going to get paid for wasted doses, which they are now. Two, the idea that the commercial market is going to accept how much the government was paying per shot — I think that’s an ambitious goal for Pfizer and Moderna,” Raymond James analyst Chris Meekins told Axios.
Moderna reported $10.5 billion in sales in the first half of 2022, all of which was accounted for by the vaccine, according to Axios. Pfizer’s free cash flow has increased by nearly $20 billion in the past three years.