A view of a Pfizer building in Puurs, Belgium. Jean-Christophe Guillaume/Getty Images

How much could Pfizer make from a COVID-19 vaccine?

Janet Nguyen Nov 12, 2020
A view of a Pfizer building in Puurs, Belgium. Jean-Christophe Guillaume/Getty Images

As companies around the world race to find a vaccine for COVID-19, billions of dollars are at stake. 

Earlier this week, Pfizer and German partner BioNTech announced that early data shows the COVID-19 vaccine they have under development is more than 90% effective in preventing the virus.

In the U.S. alone, there are now more than 10.4 million cases and more than 241,600 deaths, with rising infection rates occurring across the country.

A Pfizer vaccine alone will likely end up selling close to $14 billion worth worldwide in 2021, according to Damien Conover, the director of health care equity research and equity strategy at the firm Morningstar.

Conover noted that this Morningstar calculation is based on the assumption that the company will manufacture a billion doses of their vaccine, and have it fully approved in the late first quarter or early second quarter of next year (after emergency use in late 2020).  

In June, Pfizer said it anticipates making a profit off of a vaccine, without specifying how much. 

Conover said it looks like the pharmaceutical giant will charge the government around $39 for a two-dose treatment based on Pfizer’s contract with the U.S., and it will cost around $15 to manufacture. However, he noted that the company still has to factor in distribution, marketing and admin costs.

The Pfizer vaccine will have to be stored at a temperature of minus 70 degrees Celsius (minus 94 degrees Fahrenheit), which many hospitals do not have the storage facilities for.

“So there’ll be profit on it, but it’s probably not going to be like a typical drug margin that you would see for other products coming from Pfizer,” Conover said.  

And while there will be massive COVID-19 vaccine sales, he actually doesn’t see pharmaceutical companies in general making significant profits off of them in the long run.

Conover said there are several reasons for this — multiple vaccines will likely hit the market eventually, pushing the price down, and many of these companies have accepted government funding, which gives companies less flexibility to price it higher than they might normally. 

Pfizer is somewhat of an exception here — it’s participating in the U.S. government’s Operation Warp Speed to supply a COVID-19 vaccine, but did not accept funding from them for the research and development process. Under this agreement, the U.S. would obtain the first batch (100 million doses) for $1.95 billion, with Americans receiving the vaccine for free. 

Conover also pointed out that vaccines, in general, cost less than most branded drugs. The New York Times wrote that vaccines are inexpensive relative to their value, with a typical dose costing $50.

So why race to be first? Conover said other incentives, along with some profit, would include a company being able to generate goodwill with governments and patients. 

Like Conover, BioWorld senior analyst Karen Carey said it is highly likely multiple vaccines will hit the market.

“Not only because there are currently 185 in development, but because it will be nearly impossible for any one company to provide the supply needed for the world,” she said in an emailed statement.

Frank Lichtenberg, a business professor at Columbia University, said a COVID-19 vaccine could be especially positive for a startup’s business. 

“In this case, Pfizer is partnering with a German startup [BioNTech], and I think that could certainly be very helpful to them,” Lichtenberg said. “Pfizer already has quite a reputation, so I think that that may be a little less important for a company like it. But nevertheless, it will certainly be valuable public relations.” 

Several companies were asked about COVID-19 vaccine pricing plans during a hearing this summer held by the U.S. House Energy and Commerce Subcommittee on Oversight and Investigations.

Pfizer’s chief business officer, John Young, said that the company recognizes “that these are extraordinary times, and our pricing will reflect that.”

“During the time of the pandemic, we’ll price our potential vaccine consistent with the urgent global health emergency that we’re facing,” he continued. 

At the hearing, both Moderna and Merck said they will be selling it at an amount that exceeds what it cost to manufacture the vaccine. Meanwhile AstraZeneca said that it will be selling 300 million doses to the government “at no profit” and Johnson & Johnson said it will be selling the vaccine at a “not-for-profit price during the emergency pandemic.” (Emphasis ours.) 

Lichtenberg noted that while Pfizer could have the first vaccine to be approved for distribution, the first medicine for a condition or disease isn’t always the best one. But if its 90% efficacy rate holds up, it’ll be hard to beat. 

Whoever releases a vaccine first, and whenever that is, people around the world will be keeping close attention on the price — and these companies know that. 

“There’s a lot of pressure right now on these firms not to take advantage of the situation and really come through and really show that they are here for the benefit of society,” Conover said.

COVID-19 Economy FAQs

What do I need to know about tax season this year?

Glad you asked! We have a whole separate FAQ section on that. Some quick hits: The deadline has been extended from April 15 to May 17 for individuals. Also, millions of people received unemployment benefits in 2020 — up to $10,200 of which will now be tax-free for those with an adjusted gross income of less than $150,000. And, for those who filed before the American Rescue Plan passed, simply put, you do not need to file an amended return at the moment. Find answers to the rest of your questions here.

How long will it be until the economy is back to normal?

It feels like things are getting better, more and more people getting vaccinated, more businesses opening, but we’re not entirely out of the woods. To illustrate: two recent pieces of news from the Centers for Disease Control. Item 1: The CDC is extending its tenant eviction moratorium to June 30. Item 2: The cruise industry didn’t get what it wanted — restrictions on sailing from U.S. ports will stay in place until November. Very different issues with different stakes, but both point to the fact that the CDC thinks we still have a ways to go before the pandemic is over, according to Dr. Philip Landrigan, who used to work at the CDC and now teaches at Boston College.

How are those COVID relief payments affecting consumers?

Payments started going out within days of President Joe Biden signing the American Rescue Plan, and that’s been a big shot in the arm for consumers, said John Leer at Morning Consult, which polls Americans every day. “Consumer confidence is really on a tear. They are growing more confident at a faster rate than they have following the prior two stimulus packages.” Leer said this time around the checks are bigger and they’re getting out faster. Now, rising confidence is likely to spark more consumer spending. But Lisa Rowan at Forbes Advisor said it’s not clear how much or how fast.

Read More


Marketplace is on a mission.

We believe Main Street matters as much as Wall Street, economic news is made relevant and real through human stories, and a touch of humor helps enliven topics you might typically find…well, dull.

Through the signature style that only Marketplace can deliver, we’re on a mission to raise the economic intelligence of the country—but we don’t do it alone. We count on listeners and readers like you to keep this public service free and accessible to all. Will you become a partner in our mission today?

Your donation is critical to the future of public service journalism. Support our work today – for as little as $5 – and help us keep making people smarter.