How Much Revenue Will COVID-19 Vaccines Generate?

Since the start of the COVID-19 pandemic, people all across the world have been trying to find ways to suppress the virus. But almost all of these efforts were made to be temporary, as everybody was waiting and hoping for an effective vaccine, and one that would come quickly. Vaccines greatly reduce the risk of infections among people who have them.

Thus, if a certain number of people are vaccinated, a sort of herd immunity is formed, and the chances of an individual contracting the virus decreases. Across the world, this number is typically between 4.7 and 5.5 billion people. For pharmaceutical companies, that makes a lot of people who need to receive the vaccine, making the race for its creation even more pressing. COVID-19 was a particularly widespread virus—it had approximately 75.5 million cases and 1.67 million deaths worldwide. Nearly 60% of Americans are willing to take the vaccine. But how much will the current vaccine leaders such as Pfizer, Biontech, Moderna, Johnson and Johnson, and others really make from their production of vaccines?

Pfizer is an American multinational pharmaceutical corporation. With the help of Biontech, a German biotechnology company, they have become the first pharmaceutical company to create and begin distributing the COVID-19 vaccine across the world. Pfizer’s vaccine will generate about $14 billion worldwide by the end of 2021 (1), which will be split between Pfizer and Biontech.

Despite this, the vaccine is unlikely to bring in much profit in the long run. Vamil Divan, analyst for Mizuho Securities, said that while there is still money to be made, it is unlikely that Pfizer and Biontech would make more than $2-3 billion long term, which is what it would take to “move the needle,” or essentially create a distinct, measurable gain of profits (2). In 2019, Merck and Ko raised nearly $496 million from its measles-mumps-rubella and chickenpox vaccines [3]. The chickenpox vaccine was licensed to the United States in 1995, and 25 years later it is still generating tremendous profits. Divan claims this is unlikely to happen to Pfizer with regards to their COVID-19 vaccine because unlike many other infectious diseases, COVID-19 mutates signifcantly less often.

So why is the Covid vaccine different from its counterparts, which produce long-term profits for the pharmaceutical companies producing and distributing them? This is simply because the coronavirus does not mutate as much as many other diseases, such as the flu.

Another pharmaceutical company, Moderna, is second in the vaccine race, as it recently got its vaccine approved for distribution. Bernstein analyst Ronny Gal predicts that for the full year, Moderna will make around $11 billion from the vaccine, just shy of Pfizer’s $14 billion [4]. However, over the next five years, Gal predicts that Moderna will make nearly $20 billion from the vaccine. Despite this number’s current appeal, it once again proves that the COVID-19 vaccine is more efficient when it comes to short-term profit for pharmaceutical companies, and that long-term sales will decrease rather dramatically.

Johnson and Johnson are looking at similar numbers. It is expecting to make roughly $1 billion by next August (5). However, it is clear that 20 years from now, Covid vaccines will not be generating even nearly as much revenue as some other vaccines, such as the varicella vaccine for chickenpox. Influenza vaccines, which began being administered in 1930 but were only widely available in the United States in 1945, still generate massive amounts of money. With new vaccines produced every two years for influenza, its producers— such as Commonwealth Serum Laboratories (CSL)— still generate over a billion dollars from each vaccine every two years. In fact, CSL estimates that the market for influenza vaccines is roughly $4 billion (6). The Hepatitis B vaccine also generates significant amounts of profit today, with nearly every European country implementing a universal immunization of it by vaccinating children at birth. In fact, there are only eight European countries that do not mandate the Hepatitis B vaccine (7). With so many vaccines annually produced, they help generate strong revenues.

COVID-19 has created a renewed focus on infectious diseases. With the virus completely changing everybody’s lives, it is impossible to ignore it, as well as the possibility of future infectious diseases. Many companies such as Johnson and Johnson and AstraZeneca PLC are continuing to focus their attention on vaccines and treatments for the pandemic in order to catch up to other pharmaceutical companies that are currently ahead. The vaccine market has bounced back with the pandemic, and researchers will continue to invest in it in the long run as we prepare for other infectious diseases in the future.

Sources:

(1) https://www.marketplace.org/2020/11/12/how-much-could-pfizer-make-from-a-covid-19 -vaccine/

(2) https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/pfiz er-may-be-1st-to-file-for-covid-19-vaccine-but-profits-likely-short-lived-61287896

(3) https://www.reuters.com/article/us-merck-co-results/merck-raises-full-year-forecasts-as-v accines-power-profit-beat-idUSKCN1S616K

(4) https://www.fool.com/investing/2020/12/10/how-much-money-will-moderna-make-fromits-covid-va/

(5) https://www.fiercepharma.com/manufacturing/j-j-touts-covid-vaccine-supply-chain-stabil ity-eyes-plans-for-2022

(6) https://www.cnbc.com/2015/10/19/the-16-billion-business-of-flu.html

(7) https://www.euro.who.int/en/health-topics/disease-prevention/vaccines-and-immunizatio n/vaccine-preventable-diseases/hepatitis-b