Big Pharma raked in USD 90 billion in profits with COVID-19 vaccines
Pfizer, BioNTech, Moderna, and Sinovac made an extraordinary USD 90 billion in profits on their COVID-19 vaccines and medicines in 2021 and 2022. SOMO's new report, Pharma's Pandemic Profits, shows that these enormous gains are mainly due to decades of research funded by public investment, billions in grants for development and production, and tens of billions in Advanced Purchase Agreements (APAs) with governments.
Pfizer alone generated USD 35 billion in net profits on its COVID-19-related products during 2021 and 2022. BioNTech and Moderna made USD 20 billion each, while Sinovac pocketed
Pharma's Pandemic Profits (pdf, 744.88 KB)
As health policymakers globally review the lessons learned during COVID-19, they must agree on decisive measures to prevent such extreme profiteering at taxpayers' expense. The Pandemic Accord, a new international instrument on which negotiations start this week, recognizes the need for governments to attach conditions to public medical research and development funding. However, the draft text published earlier this month must make conditions on pricing, profit margins, and equitable access mandatory.
“Without mandatory rules here, little will change. Corporate giants will continue to receive unconditional public funding and negotiate perverse deals. Public funding has to serve the public interest, which means affordable and safe medicines that are accessible to all, not super-profits for Big Pharma.”
Billions of public funding and APAs, no strings attached
Amid the pandemic, governments spent billions in funding to support vaccine research and development. Seven vaccine producers received at least USD 5.8 billion in public financing, with the US government being the largest funder, providing USD 5 billion. Agreements made did not include obligations for the companies to return the funds, not even when large profits were made.
The vaccine producers benefitted even more from Advanced Purchase Agreements (APAs), which give upfront financing for development and production while transferring risk from suppliers to buyers. Pharmaceutical companies received at least USD 86.5 billion through these APAs. De Haan: "The exact amount is hard to pin down and could well be much higher because companies and governments have not been transparent about their deals. As far as we could establish, these agreements did not require companies to return money used to develop and produce vaccines, even when development failed, and the vaccine was never delivered."
COVID-19 Vaccines sold dearly
Despite receiving huge sums through publicly funded grants and APAs and making substantial profits from the outset, Pfizer/BioNTech and Moderna chose to increase the price of their vaccines by 56% and 73%, respectively, between 2020 and 2022. As fewer vaccines will be sold in the coming years, both companies have already announced that they will quadruple their latest known prices this year in an apparent bid to maintain significant profitability.
Vaccine inequity
The report concludes that governments and international organizations must ensure that the benefits of public investment in research, development, and production do not lead to such exorbitant profits and are shared more equitably, particularly with low-income countries. De Haan: "Companies have blatantly gone for profits and have been favouring deals with high-income countries, that would pay a higher price per dose. Governments of high-income countries have been pushing out low-income countries as well, by making deals with all the vaccine producers and claiming more vaccines than they needed."
Symptoms of systemic crisis
This month, the massive profits raked in by oil majors such as Shell and Exxon and food multinationals such as Unilever and Ahold-Delhaize have been at the forefront of the news. At a time when ordinary people are struggling with rising costs of living, Big Oil and Big Food are getting super wealthy, and so is Big Pharma. While the oil majors make money from driving climate change and profit from a war-related economic disruption, and food multinationals take advantage of inflation to artificially raise their prices, the pharmaceutical companies profit from a global pandemic and through an enormous influx of public money. These massive profits of big business are deepening wealth inequality across the globe.
