How much money will Pfizer and Moderna make from their booster shots?

We might be back for round three.
We might be back for round three.
Image: Reuters/Carlos Osorio
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The Pfizer vaccine will need a booster shot, likely within a year of completing the first two doses, the company’s CEO, Albert Bourla, said in comments taped April 1, and released yesterday by Pfizer.

Moderna, too, announced a plan to have a booster shot ready its two-dose vaccine course ready by the fall.

This was always a possible scenario for the immunization campaign. Data on the duration of immunity so far shows both Pfizer and Moderna’s vaccines—both made using mRNA technology—are highly effective six months after the shots, but the boosters would extend strong immunity further, and potentially protect against emerging variants.

More shots, more money for Pfizer and Moderna

Vaccines don’t come for free, though, and providing a booster shot for current regimens is likely to be the first indicator of how much drug companies can earn from their Covid-19 vaccines in the long term.

Pfizer and Moderna didn’t respond to Quartz’s request for details on prospective booster shot pricing, but it’s possible to estimate revenues for them based on a few considerations.

“Sold at present prices, this would represent roughly a 50% increase in revenue over the longer run,” says Christopher Snyder, an economics professor at Dartmouth who has been studying the economic aspects of vaccine development.

Moderna’s forecast for sales of the first two doses of the vaccine was $18.4 billion for 2021, so the booster shot could add about $9 billion to that. Pfizer projected at least $15 billion in sales for 1 billion Covid-19 vaccine doses, so the booster would bring an additional $7.5 billion to the pharma giant.

“The initial prices were set before any vaccine was approved and before anyone knew which vaccines would be most effective. Now that we know that the mRNA vaccines are superb, it wouldn’t surprise me if the prices for boosters against new variants were a bit higher,” says Alex Tabarrok, an economist at George Mason University.

But whether the price will stay the same is the big question, and there are arguments for either increases or decreases.

The cases for a cheaper booster, and for a more expensive one

“On the one hand, the initial protection provided by the initial doses is likely more valuable than the top-up in protection from the booster, and this lower value might entail a lower price,” says Snyder. Part of the calculation behind the price of the vaccine was savings fending off Covid-19 would bring to the healthcare system and the economic value of opening countries up as soon as possible.

The impact of booster shots on these two factors is marginally lower, so countries might not be willing to pay the same, although the benefits of the vaccine are much higher than their cost. A paper published in Science in March estimated the value in terms of economic impact as $600 to $1,000 per person.

Yet the booster might end up costing more. Manufacturers would likely have to invest in production capacity to be able to deliver millions more doses on top of their already stretched vaccine production, which would in some way justify raising the cost. Further, while companies openly tried to set reasonable costs for the first doses to steer clear of accusations that they were exploiting the pandemic for profit, the booster shot might not carry the same ethical weight.

Pharmaceutical companies have indicated their intention to renegotiate the prices of the vaccines upward during the post-pandemic era. If the worst days of the health emergency are believed to be behind us, Covid-19 booster shots would look somewhat like the yearly flu vaccine—an important, routine vaccination, but not one that will make the difference between life as we once knew it and pandemic life.

There’s more. While some trials are starting to try and mix different vaccines—for instance, providing a second dose of Moderna after a first Pfizer shot—at the moment there is not enough data on the efficacy of such an approach. This means countries willing to keep up their populations’ immunity—arguably, all countries—are somewhat stuck with the makers of the vaccines they already administered, which gives a negotiating advantage to pharmaceutical companies.

Still, pharma makers might want to wait a bit longer and milk the goodwill they are enjoying after developing the vaccine before they raise the price.

Who is going to pay for the booster shot?

The question of who pays for the booster shot is easier to answer. So far, governments around the world have paid for the vaccine—both for their own populations and for poorer countries through partnerships such as Covax, as well as bilateral agreements.

Governments in rich countries will continue to pay for the vaccine for as long as it is recommended, as it happens with all vaccines, and certainly to expand the existing coverage through the booster shot. The exception to this rule is usually the US, where routine vaccinations—including childhood immunization—can carry some out-of-pocket costs.

So far, vaccines in the US have been offered free of out-of-pocket costs, including for those who don’t have insurance. The government covered those expenses through the provider relief fund set up by the 2020 CARES act. While it can’t be said for sure it will also cover the booster shot, it very likely will do so—the advantage to keeping immunity high and the country going far overweights the cost of the vaccine.