Pfizer, Moderna Therapeutics and Johnson & Johnson racked in a cumulative $125.3 billion in revenue during 2020. All three firms experienced a surge in revenue as the COVID-19 pandemic raged on, with Moderna’s total revenue increasing 13 times compared to the year prior.
Although the COVID-19 vaccine is a hopeful development, praising the companies for their heralding efforts encourages a distorted narrative. Pharmaceutical companies care more about maximizing profit than they do delivering affordable medicine to every human.
Their prosperity depends on a for-profit model, but leaving COVID-19 vaccines to the will of the market is an irresponsible public health approach.
Low-income nations in Africa, Asia and Latin America are unlikely to vaccinate most of their population before 2023 or 2024, according to the Wall Street Journal. Widespread COVID-19 infection increases the threat of variants, which could threaten the effectiveness of vaccines for all populations.
If we continue on the current trajectory — with high-income nations fully vaccinated by mid-2021 and low or middle-income nations struggling to catch up — the global economy could suffer losses of more than $9 trillion due to global supply chain disruptions. Wealthy nations, including the U.S., will bear a majority of the cost.
Taking into account vaccine sales alone, Moderna and Pfizer are expected to bring in $33.4 billion in 2021. Pfizer expects a profit margin upward of 20%.
Moderna promised to maintain its for-profit model, but it pledged to refrain from enforcing “COVID-19 related patents against those making vaccines intended to combat the pandemic.”
Moderna holds several U.S. patents for its mRNA-based COVID-19 vaccine. Although the move appears altruistic, it ultimately supports Moderna’s business model: Moderna will refrain from patent enforcement only during the pandemic.
The company will then open itself up to licensing negotiations for its technology after its conclusion. Therefore, if competitors adopt the patented technology now, they must obtain a paid license from Moderna to continue production.
Given uncertainty about how long immunity from COVID-19 lasts and the potential for yearly booster vaccines, this business model may amplify long-term profits for Moderna.
Johnson & Johnson pledged to produce vaccines at no profit. However, advocacy groups raised concern that the company’s $10 price per dose creates an affordability barrier for low- and middle-income nations.
The company has a history of price gouging in low-income countries. In 2019, 1.4 million people died from tuberculosis, and 95% of cases and deaths occurred in developing nations, according to the World Health Organization.
Johnson & Johnson previously charged $1,200 per TB treatment course. The company recently reduced the price to $400 for a six-month treatment for qualifying nations, but research shows the drug could be sold for as little as $48 to $102 while still generating a profit.
Despite Johnson & Johnson’s alleged commitment to a nonprofit model and Moderna’s pledge to refrain from enforcing patents, the drug lobby is working vigorously to maintain a monopoly on vaccine production.
The Pharmaceutical Research and Manufacturers of America — which represents some of the largest drug companies in the world — appealed to President Joe Biden to protect intellectual property rights during the pandemic. PhRMA encouraged the administration to use “all available tools and leverage” to ensure America’s trading partners respect patent rights and intellectual property.
A handful of high-income nations representing 16% of the world's population have secured more than half of all COVID-19 vaccines. They’ve left low-income nations to either wait their turn or find their own method of production.
Meanwhile, the drug lobby is working vigorously to shut down any attempt to share vaccine patents or knowledge — effectively creating a monopoly on COVID-19 vaccines.
The vaccine is a product of Big Pharma’s exploitative model, which extracts billions in profit each year from the pockets of sick people. The conglomerate of companies producing the COVID-19 vaccine is not a knight in shining armor. They aren’t doing us a favor by inflating prices and maximizing their longevity through seemingly philanthropic efforts.
Step up to the plate when it’s your turn to be vaccinated, but let the Band-Aid on your arm be a reminder of the millions denied access to lifesaving vaccines at the hands of these companies.
Katelyn Balakir (she/her) is studying policy analysis and world political systems. She is a member of Indiana Model United Nations.
