Vaccine monopolies increasing cost of vaccinating the world against Covid

In a briefing note published today, the Global People’s Vaccine Alliance highlighted examples of how much both developing and wealthier nations have been potentially overpaying for Covid-19 vaccines. The analysis found that: 

• The EU may have overpaid for their 1.96 billion Moderna and Pfizer/BioNTech vaccines by as much as €31 billion  
• Pfizer/ BioNTech are charging their lowest reported price of $6.75 to the African Union - nearly six times more than the estimated potential production cost of this vaccine  
• Colombia, which has been badly affected by Covid, has been paying double the price paid by the US for Moderna vaccines 

The cost of vaccinating the world against Covid-19 could be at least five times cheaper if pharmaceutical companies weren’t profiteering from their monopolies on vaccines, campaigners from the Global People’s Vaccine Alliance campaign said today. 

New analysis by the Alliance shows that the firms Pfizer/BioNTech and Moderna are charging governments as much as $41 billion above the estimated cost of production. The EU, for example, has potentially overpaid by as much as €31 billion for its 1.96 billion doses of the Pfizer/BioNTech and Moderna vaccines, in comparison to the estimated cost price. 

Jim Clarken, Chief Executive of Oxfam Ireland said: “Despite a rapid rise in Covid cases and deaths across the developing world, Pfizer/BioNTech and Moderna have sold over 90 percent of their vaccines so far to rich countries, charging up to 24 times the potential cost of production. 

“Last week Pfizer/BioNTech did announce that it would licence a South African company to fill and package 100 million doses for use in Africa, but this is a drop in the ocean of need. Neither company has agreed to fully transfer vaccine technology and know-how with any capable producers in developing countries, a move that could increase global supply, drive down prices and save millions of lives.”

Analysis of production techniques for the leading mRNA type vaccines produced by Pfizer/BioNTech and Moderna – which had an injection of public funding to the tune of $8.3 billion - suggest these vaccines could be made for as little as $1.20 a dose. Yet COVAX, the scheme set up to help countries get access to Covid vaccines, has been paying, on average, nearly five times more. COVAX has also struggled to get enough doses and at the speed required, because of the inadequate supply and the fact that rich nations have pushed their way to the front of the queue by willingly paying excessive prices. 

While some rich countries have started to re-distribute a fraction of their excess doses and have made funding commitments, this charity is not enough to fix the global vaccine supply problems.  

Clarken went on to say: “Pharmaceutical companies are holding the world to ransom at a time of unprecedented global crisis. Because profits are being prioritised ahead of people, budgets that could be used for building more health facilities in low-income countries are instead being decimated by these all-powerful corporations as governments the world over try to vaccinate their citizens."

The Alliance says it is vital that vaccine manufacturers are forced to justify why their vaccines cost more, but open competition is also critical to bring down prices and increase supply. All vaccines, old and new, only come down in price once there are multiple competitors in the market. 

The People’s Vaccine Alliance, both here in Ireland and globally, is calling on all governments to insist that the vaccine technology is transferred – to enable all qualified manufacturers worldwide, especially those in developing countries, to produce these vaccines. Governments, should also urgently approve a waiver of intellectual property rules related to Covid-19 technologies as proposed by South Africa and India. 

The waiver, which is supported by over 100 nations including the US and France has been repeatedly blocked by the European Union, including Ireland, and the UK.

Maaza Seyoum, from the African Alliance and People’s Vaccine Alliance Africa, said: “What possible reason then do the governments of the EU have to ignore the repeated calls from developing countries to break the vaccine monopolies that could drive up production while driving down price? 

“Enabling developing country manufacturers to produce vaccines is the fastest and surest way to ramp up supply and dramatically drive down prices. When this was done for HIV treatment, we saw prices drop by up to 99 percent.”

Never in history have governments been buying more doses of vaccines for one disease and the large-scale production should drive down costs, enabling companies to charge lower prices. Yet the EU reportedly paid even higher prices for its second order from Pfizer/BioNTech. 

Dramatic price escalation is predicted to continue in the absence of government action and with the possibility of booster shots being required for years to come. The CEO of Pfizer has suggested potential future prices of as much as $148 per dose - 148 times more than the potential cost of production. And because pharmaceutical companies anticipate charging such high prices for boosters, they will continue to sell doses to rich countries at the expense of protecting lives globally.  

Clarken concluded: "As Ireland reaches the milestone of nearly 70 percent of its citizen being fully vaccinated, less than one percent of people in low-income countries have received a vaccine, while the profits made by the companies has seen the CEOs become billionaires. 

“This vaccine inequity crisis is being facilitated by governments, including Ireland's, who continue to block the means to resolve this issue. I cannot emphasise enough the need for the Irish government to reconsider their position on the TRIPS waiver and call on them to meet with Members of the People’s Vaccine Alliance Ireland as a matter of urgency.”  

END

Contact

Caroline Reid, Communications Manager,  087 912 3165 

Notes to editors: 

• Download the briefing note: The Great Vaccine Robbery
• Further examples of how much both developing and wealthier nations have been potentially overpaying: 

1. The highest reported price paid for Pfizer/BioNTech vaccines waspaid byIsraelat $28 a dose -nearly 24 times the potential production cost.
2. Moderna has charged countries between 4 and 13 times the potential cost price of the vaccine and reportedly offered South Africa a price between $30-42 a dose -nearly 15 times higher than the potential production cost.
3. Senegal, a lower-income nation, said it paid around $4 million for 200,000 doses for Sinopharm vaccines, which equates to around $20 a dose.
4. The UK alone has potentially paid £1.8 billion more than the cost of production for the Pfizer and Moderna vaccines –enough money to pay every worker in its National Health Service a bonus of more than £1000.

• Due to lack of transparency of pharmaceutical companies, the exact cost of research and development and manufacturing of vaccines are unknown. Estimates used in this release are based on studies of mRNA production techniques, carried out by Public Citizen with engineers at Imperial College. Their analysis suggests that it could cost $9.4bn to produce 8bn doses of the Pfizer/BioNTech vaccine - $1.18 per vaccine and for Moderna it would cost $22.8bn to produce 8bn doses - $2.85 per vaccine: https://www.citizen.org/article/how-to-make-enough-vaccine-for-the-world...
• The figure that companies have been charging up to 24 times the potential cost of production is based on the reported information that is available. The highest reported cost paid was by Israel. For many countries there is no available data on how much they have paid for these vaccines.
• Pfizer forecasts sales of $26 billion in revenue for 1.6 billion vaccine doses, therefore at an average cost per dose of $16.25 (against a potential cost price of $1.18 per dose). Moderna forecasts sales of between 800 million and 1 billion doses, therefore at an average cost of between $19.20 and $24 per dose (against a potential cost price of $2.85 per dose). The total combined forecasted sales income equates to $41 billion above the potential cost of production. 
• Colombia is reported to have paid $12 per dose for 10 million doses of Pfizer/BioNTech and $29.50 per dose for 10 million doses of Moderna. A potential overspend of $375 million.  
• Vaccine Billionaires data available here: https://www.oxfam.org/en/press-releases/covid-vaccines-create-9-new-bill...
• Pfizer/ BioNTech and Moderna have received $8.25 billion dollars in public support for their vaccines between them - $5.75 billion for Moderna and $2.5 billion for Pfizer/BioNTech. This includes public funding and guaranteed government pre-orders. https://www.oxfamamerica.org/explore/research-publications/shot-recovery/ 
• COVAX has reported that for its first 1.3 billion doses it paid an average price of $5.20 a dose. Given available reported prices for the vaccines in COVAX’s portfolio it is reasonable to assume COVAX paid less than $5.20 for the Oxford/AstraZeneca vaccine (reducing the average dose price), and likely paid more for the Pfizer/BioNTech (increasing the average dose price). The schemes’ lack of transparency prohibits proper scrutiny. 
• Gavi reports COVAX will achieve 23 per cent coverage in AMC populations by end of 2021: https://www.gavi.org/sites/default/files/covid/covax/COVAX%20Supply%20Fo...
• Competition drove down first-line regimen HIV medication prices by 99 percent over a 10 year period, from $10,000 to as low as $67 per patient per year: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3078828/#B67 
• Analysis by the People’s Vaccine Alliance has found that just 0.28 per cent of the people in Low Income Countries have received at least a single dose, based on a combined population of  775,710,612, and data from Our World in Data which shows that as of Sunday 2,155,657 had been vaccinated with at least a single dose.  
• UNICEF procures existing vaccines on behalf on many low- and middle-income countries. According to analysis in the Lancet they pay a median of 0.80 cents a dose for all vaccines https://www.thelancet.com/journals/lancet/article/PIIS0140-6736(21)00306-8/fulltext 
• The Chinese Sinopharm vaccine is being sold for up to $40 a dose (making it 50 x more expensive than $0.80): https://www.thelancet.com/journals/lancet/article/PIIS0140-6736(21)00306-8/fulltext#sec1 
• The UK is reported to have paid £15 a dose for the Pfizer vaccine and has ordered 100 million doses. For Moderna they are reported to have paid £25 per dose and have ordered 17 million doses. If these two vaccines were produced at the production price estimated by Public Citizen the UK would have saved £1.8 billion, enough to pay every NHS worker a bonus of £1,012 (based on the NHS having 1.5million members of staff in England, 140,000 in Scotland, 78,000 in Wales and 64,000 in Northern Ireland).