Covid-19 vaccines aren’t making any money for Johnson & Johnson

Soon, we may need new doses.
Soon, we may need new doses.
Image: Reuters/Shannon Stapleton
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For many Americans, Johnson & Johnson (J&J) these days is most closely associated with the pharmaceutical company’s Covid-19 vaccine, which has been recently suspended in the US as authorities investigate its risk of causing a rare blood clot syndrome.

But for J&J, the vaccine is nowhere near its main product, at least not in terms of revenue. Out of over $22 billion in sales, Covid-19 vaccines accounted for $100 million—or just above 2%, the company announced today.

This pales in comparison with the makers of the other vaccines licensed in the US, Moderna and Pfizer. The two companies have projected yearly sales from the vaccine to be $18 billion and $15 billion respectively, without counting additional booster shots.

Moderna, Pfizer, J&J—different vaccines, very different revenue

There are several reasons behind this discrepancy.

First, it’s the number of doses. So far, J&J has sold only about 10 million doses, and has plans to deliver 200 million more to the European Union and other European countries, and 100 million to the US. Pfizer and Moderna, by comparison, are delivering up to a billion doses each. Both Pfizer and Moderna vaccines use mRNA technology and are administered in two doses, to which a booster shot is likely to be added in the next month.

Then there is the timeline. J&J’s vaccine was only approved in late February, two months after the two mRNA vaccines, so the current sales reflect only about two months of sales.

Perhaps most importantly, the vaccine isn’t making J&J any money because it’s not supposed to. At $10 per dose, the single-shot vaccine is the cheapest among the ones purchased by the US government; Pfizer and Moderna, by comparison, cost about $39 to $74 for two doses.

That’s because the company decided to adopt a not-for-profit model for the vaccine, at least until the end of the pandemic, explained Joaquin Duato, the vice-chairman of J&J’s executive committee, on a conference call with analysts and investors. Afterward, he said, the company might consider raising the price of the vaccine.

“Covid-19 is the most severe global health challenge we have seen in our lifetime, and Johnson & Johnson is committed to help the world win the fight against Covid-19 and be even better prepared for possible future pandemics,” Paul Stoffel, the company’s chief scientific officer, said in the call.

After being caught in several lawsuits for its role in underplaying the addictive properties of opioid medications and catalyzing the opioid crisis, J&J may have more to gain from the goodwill its not-for-profit approach to the vaccine generated than from the earnings it might bring.

In the past two years, the company spent $5 billion in settlements related to the opioid crisis in the US. Yet thanks to its Covid-19 vaccine development involvement, it is now arguably associated more strongly with its effort to end the pandemic than with its role to start an epidemic.

Overall, J&J reported an increase of 9.6% in its overall revenue from the pharmaceutical business in the past year, generating $12.2 billion. The main drivers of the increase were Darzalex, a drug against myeloma, and Stelara, a treatment for Chron’s disease.